GE’s Case analysis
1. He has adopted 3 D’s (Downsizing, destaffing and delayering). He has made hierarchical changes across the organization by reducing hierarchy level from 9 to 4. 2. Fix, Sell or close the business in which GE is not either No.1 or No.2. Between 1981 to 1990 they had sold more than 200 businesses which has accounted for 25% of 1980 sales. 3. Restructuring the organization - Jack Welch stated the above objective into a 3 circle concept. Business were categorized as core (with the priority of “reinvesting in productivity and quality”), high-technology (challenged to “stay on the leading edge” by investing in R&D), and services (required to “add outstanding people and make contiguous acquisitions”). 4. More focus on service sector (shift from product to services). Services contribute more than 70 % revenue. 5. Going global through mergers and acquisition.
6. Adopting best practices, employees productivity and culture change across the organization- led to 3% increase in productivity during 1982-87 and 4% increase during 1988-92. Going Global: Under Jack Welch, GE went global with a vengeance through strategic initiatives to broaden GE’s international revenue generation leading to international revenues growing from almost 20% of revenues in 1985 to 50% in 2000(expected). 7. Six Sigma concepts: To reduce the variability in the process and also to improve the quality. This initiative incurred a cost of $1.75 BB between 1996-1999 and GE achieved cumulative benefits of $ 4.6 BB over the same period.
8. Selective acquisitions: As 2003 began, GE finalized plans to acquire Vivendi-Universal Entertainment. Immelt felt that this acquisition was crucial to growing the NBC business within GE as the deal would provide them with important content, production facilities, cable distribution and a strong management team. 9. Focus on creativity & innovation: Shortly after the Vivendi deal,...
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