Case Study: Ge Jeffrey Immelt Essay Example

cable & film, entertainment, bioscience, and security” (Regani & George, 2009, p. 148). In addition to increasing and globalizing R&D, he changed the culture of GE. He increased external communication with investors and third parties as opposed to GE’s previous “culture of promoting communications within the company” (Regani & George, 2009, p. 148). Immelt succeeded in softening the culture at GE. Some other steps Immelt took to demonstrate to investors that the company could grow without acquisitions were:

Focusing on innovation: Through a program called Innovation Breakthrough, all business leaders with GE were required to submit a minimum of “three innovative project ideas per year . . . ” (Regani & George, 2009, p. 149). The first submission of 80 projects was expected to increase revenue by $25 billion. By 2007 they expect to have in excess of 200 projects in the works (Regani & George, 2009, p. 149).

Increased the level of diversity: As they began hiring from outside the firm for senior positions, more minorities were placed into leadership positions.

Immelt believed that by hiring from outside they would bring in “new ideas, creative energy and a new perspective on the company’s policies” (Regani & George, 2009, p. 149).

Shifted the focus from production to marketing: Immelt appointed a Chief Marketing Officer who developed a commercial leadership strategy to identify the best marketers and provided extensive training, including special marketing courses developed for marketing executives (Regani & George, 2009, p. 149).

Encouraging new ideas: To encourage new ideas, executive were asked “to hold ‘idea jams’ where employees from different departments came together to brainstorm” (Regani & George, 2009, p. 149). A “virtual idea box’ was also set up

for employees to post their ideas on the Web (Regani & George, 2009, p. 149).

The Commercial Council: The Commercial Council was initiated by Immelt in 2002 and included executives from sales and marketing. The meetings were held quarterly with a goal of discussing growth strategies, innovative ways to reach customers and evaluation of the new ideas received (Regani & George, 2009, p. 49). Immelt’s leadership changed the organizational culture at GE dramatically. Jack Welch was more concerned with production and the performance of the employees, while Immelt was focused on innovations, customer satisfaction and value. Immelt and Welch both practiced the “firing of the least effective 10 percent of its workforce each year” (Regani & George, 2009, p. 148). However, they differed in their approach. Welch made the firings public and made it known within the organization why the firings took place but Immelt was more subtle in his approach (Regani & George, 2009, p. 148).

Jeffrey Immelt was much more of a people person and Jack Welch seemed like a dictator. Employees were fearful of Welch and of the procedure of firing nonperformers. They were never sure if they had done enough to avoid being in that 10 percent (Regani & George, 2009, p. 144). It created a lot of stress and pressure for the employees. Immelt was friendlier and employees found him more approachable. “Describing Immelt’s style of functioning, an article in Business Week stated, ‘He prefers to tease where Welch would taunt. Immelt likes to cheer his people on rather than chew them out’” (Regani & George, 2009, p. 49). To further stimulate strategic entrepreneurship, some changes can be made to the Innovation

Breakthrough program and the idea jams. Employees would be more willing to participate if they received some kind of recognition and/or a financial reward. One example for the innovation program is recognition via the company’s intranet site or at departmental meetings. If an employee submits an innovative project idea that the company undertakes, give that employee the recognition and a reward such as a small bonus of $50 to $100. If possible, offer that employee the opportunity to work on that project.

There is nothing more satisfying to an employee than helping to make the project idea become a reality. Another idea in regards to idea jams is to make a contest out of it. All ideas submitted can be reviewed by an executive committee and they will select the top ten ideas. These top ten can be posted on the company’s intranet or via e-mail to all employees asking them to vote for their favorite. Involving employees in the decision making process motivates them by letting them know how important they are to the success of the company.

Immelt has successfully shown investors that he can maintain a profitable company with a new culture and very few acquisitions. He had some huge shoes to fill and was faced with many challenges, both internal and external, but he succeeded by increasing revenue by 60% and doubling profits during his first seven years as CEO (Magee, 2009, p. 3). With his success at managing profitability with very few acquisitions, it is now time to develop effective acquisition strategies.

Friendly acquisitions of firms where assets are complementary to GE’s assets have a greater chance for a successful integration between the

two firms (Hitt, Ireland, & Hoskisson, 2009, p. 197). Successful acquisitions also emphasize innovation which is a focus of Jeff Immelt’s culture at GE. In addition to increasing acquisitions, the continuation of the downscoping strategy he began in 2002 will allow him to focus more on the core businesses.

References

1. Hitt, M. A. , Ireland, R. D. , Hoskisson, R. E. (2009).
2. Strategic management: Competitiveness and globalization (Concepts and cases) 8th Edition. Mason Ohio: South-Western Cengage Learning. Magee, D. (2009, March 9). Jeff Immelt and the new GE way: Innovation, transformation and winning in the 21st century. New York, NY: McGraw-Hill Companies. Regani, S. and George, S. S. (2009).
3. Jack Welch and Jeffrey Immelt: Continuity and change in strategy, style and culture at GE. In Hitt, R. D. , Ireland, R. D. & Hoskisson, R. E. , Strategic Management Competitiveness and Globalizaiton, Concepts and Cases (pp. 165-180). Mason, OH: South-Western Cengage Learning