Strategic Management and Organisational Change

This assignment examines the relationship between strategic management and organizational change. Students are required to analyze General Electric's (GE) strategic transformation and its impact on achieving sustainability goals. The analysis should consider relevant theories of strategy, dynamic capabilities, and organizational change, drawing upon academic sources and GE's public information. The assignment encourages critical thinking about how companies can navigate complex challenges through effective strategic planning and implementation.

Running head: GENERAL ELECTRIC CASE
General Electric Case
Name of Student
Name of University
Author Note

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Executive summary
The report focuses on the situation that exists in General Electric a reputed company that
deals with the manufacturing of aircraft and other electrical appliances. A case study
regarding the situation of the company is provided that highlights the contributions made by
Jeff Immelt after his appointment as the managers of the company. General Electric went
through changes in the organisation such as in terms of organisational structure,
organisational culture and the profitability of the organisation. The case study sheds light on
the impact of these changes in the organisation that are strategically applied by Immelt. The
alignment of these strategies with the 21t century along with the resources and capabilities
are highlighted in the report. Changes in the method of working in the organisation are
analysed along with alternative strategies that can be developed in order to mitigate initial
failure.

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Table of contents
Introduction................................................................................................................................2
Jeff Immelt’s contribution in GE...............................................................................................2
Aligning the strategies of GE.....................................................................................................5
Requirement in 21st century....................................................................................................5
Resources and capabilities of GE...........................................................................................6
Changes due to new strategies...................................................................................................7
Considering alternative strategies..............................................................................................9
Conclusion................................................................................................................................11
Bibliography.............................................................................................................................12

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Introduction
In order to be competitive in the market, a business organisation needs to maintain
changes that help in its growth. These changes can come in the form of change in internal as
well as external factors. The assignment highlights the changes undertaken by General
Electric (GE) under its new manager. General Electric is an American multinational company
situated in New York. Thomas Edison is one of the co-founders of the company. The
company came into existence in the year 1892. It is famous for manufacturing various types
of aircraft engines, electrical distribution and energy, gas and so on (Ge.com. 2017).
The assignment analyses contributions made by Immelt in shaping up the strategies of
GE. The business environment of the 21st century is analysed along with the resources and
capabilities of GE. These two factors were analysed in order to identify the reasons for the
change in the organisation. Apart from this, the alternate strategies that GE can formulate are
also provided in the assignment.
Jeff Immelt’s contribution in GE
According to Armstrong and Taylor (2014), the most challenging factor in leadership
is taking control of an enterprise that already had a prominent leader. In the case of GE, this
was a similar problem that Jeff Immelt had to face. Jack Welch was a prominent leader of GE
and had built up the reputation of the company. Accepting the managerial responsibilities of
the company proved to be a huge challenge for Immelt. During the initial period of his
takeover, Immelt set out to declare that long-term strategic changes will be made in the
company. The World Trade Centre bombing in 2001 prompted this action as the
transformational strategy is one of the most critical management strategies in the modern

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world. Such a change can be implemented with the proper support of the individual as well as
the organisation (Hill, Jones and Schilling 2014).
Immelt made strategic changes that involved changing the business portfolio. The
focus was also on redirecting the performance goals of the organisation to the attainment of
revenue for the organisation. The management of the organization should position General
Electric in a way so that in the emerging market technological advancements become the
major tool for the organization to compete other rival business organizations. This decision
was needed in order to comply with the financial loss that New York City had to suffer due to
the bombing of the World Trade Centre. The company focused on the innovation of the
products in order to gain a competitive advantage. Immelt was of the view that competitive
advantage can be gained with the introduction and application of new technologies that can
also help GE to expand and grow in the international market. Ivanaj et al. (2015) observed
that changes also need to be made in the culture and structure of an organisation. Immelt
realised this fact and implemented the necessary changes that were required in the
organisational structure of GE. The emergence of new technology and competitors are one of
the primary reasons that such a change needs to be brought about in the organisation.
In this regard it can be said that General electric has immense growth opportunities
focusing on the basic need to turn the corporate R and D centre into an intellectual hort-
house; not only that, to speed up the internal diffusion of the latest technologies (Camisón
and Villar-López 2014). The management of General Electric can increase the availability of
the renewable energy technology that plays a significant role in determining the success of
the organization. Thus it can be said that technological sector is the place utilizing that the
management of the organization can expect to outplay the rivals from the market.

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Apart from the technological factors, the management of General Electric can utilize
another area of strength; that is the socio-cultural factor influencing the business
environment. In this regard, Johnston and Bate (2013) stated that it is worth mentioning that
as the management of the organization is promoting the green lifestyle and increasing the
adoption of mobile technologies. The board members of the organization are incessantly
inclined towards using popular support for the renewable energy use. In this context, it is
important that the organization’s usage of renewable energy operating segment does benefit
from the amplified demands regarding this external factor. Thus it can be said that along with
technological factors, socio-cultural aspects of the organization can too be considered as one
of the strengths of the company and utilizing these two strengths the management of the
organization can experience immense profitability by eradicating the market competition.
Despite the change in the managerial responsibilities and the strategic implementation
of Immelt, the sales of GE suffered a major setback. In April 2015, the company made a
decision that involved the selling of capital shares of the company. The changes that were
made by Immelt were completely different from the managerial ideas that were implemented
by Welch. It has been that the company failed to meet the target that was initially set for the
appointment of Immelt. Goetsch and Davis (2014) stated that achieving the target of the
organisation is one of the important factors that every business manager needs to achieve.
Immelt had aimed at increasing the return on capital along with the sales of the company.
However, instead of increasing it, the new managerial techniques led to the loss of stock as
well.
The sales of GE saw a considerable fall from the year 2001 to 2014. Hence, Immelt
faced challenges that were not expected during the taking over of managerial duties. The new
manager also did not pay much attention to the maximisation of the value of the shareholder.
The main focus of Immelt was to make transformational changes in the business portfolio of GE. As

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stated by Godemann et al. (2017) identification of the sources of earning a profit is important
for an organisation to achieve success. Immelt wanted to understand the profit of the
company and use it in order to help in the progress of the company. After the analysis, it was
seen that much of the profit of the company came due to the cost reduction strategy. GE used
to discard the assets that were less important to the company. However, Immelt managed to
identify four global trends that can help in attaining proper growth for GE.
The four global trends as identified by Immelt include demography, infrastructure,
emerging market and environment. Waddell et al. (2013) stated that in order to ensure that
the products of a company are sold in a proper manner, analysis of the demography is
important in order to increase the sales. The managers of the organization should strategize
the operations of the business in a way so that the organization can utilize their strengths like
technological advancements and the market reputation to make the most of the market and to
ensure their profitability. The infrastructure of GE provides the company with an opportunity
to invest in areas that do not remain in the comfort zone of the company. Hence, export to
other countries that are involved in the trade activities with the U.S.A was identified by
Immelt. It has been seen that some of the emerging markets provided the main source of
income for the company. Countries like India and Russia have a triple growth rate of GDP
than the U.S.A. However, there remains the environmental threat that may cause problems in
the growth of the country. As stated by Eden and Ackermann (2013) environment analysis is
one of the most factors that need to be considered by the management.
Aligning the strategies of GE
Requirement in 21st century
Organisations need to align the selected strategies in order to monitor the
effectiveness of the strategies. The strategies need to address the requirements of the

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organisation as well as the individuals. The factors that affect changes in organisations are
also an important factor for an organisation to consider (Farkas 2016). The changes that take
place in the business world are one of the major components that Immelt needed to take into
consideration. The strategic decision undertaken by Immelt needed to be compatible with the
business market of the 21st century. The focus of Immelt was mainly on three factors that
composed the emergence of successful business in the 21st century. These factors include
technological advancement, competition in the market and the innovative technique. In the
case of GE, these factors are important in order to gain customer satisfaction and increase the
reputation of the company.
Immelt observed that technology is one of the important factors that can help in the
growth of the enterprise. In the case study, it is seen that Immelt focused more on the
development of technologies. This is evidenced by the fact that the research and development
department of the company saw an increased percentage of budgets. The initial
transformation that was brought about began from the updated technology that was first used
in Japan. Throughout the branches of the company in the country, Immelt began the
construction of research and development centres. In the case study, it is seen that about
37,000 technologies were implemented in the various branches of the company.
Immelt stated that the focus of GE was to research for bigger and long-term prospects
of the company. Apart from technologies, innovation also played a huge role in the
improvement of the company. The fact that the company was involved in providing
assistance to the healthcare people proved to be an effective strategic decision to GE.
According to Grant (2016), customer satisfaction is another important aspect that needs to be
undertaken by a company. This involves customer orientation and providing value to the
customers. These factors are important in order to retain the loyalty and trust of the
customers. Immelt felt that the increase in customer orientation led to more involvement of

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the customers. Immelt focused on the idea that in order to increase the revenue of GE,
customer satisfaction was of utmost importance.
In this regard, the responsibilities of Immelt increased as he needed to focus on hiring
marketing executives that can identify the tastes of the customers. The role of marketing
executives was delegated to possess a detailed knowledge about the new products and
services that the company can offer. Nieves and Haller (2014) observed that selling products
together can help in the increase of revenue of a company. In the case study, it is seen that
GE focuses on selling bundled products that are essential for providing support to the
customers. GE introduced cross-business marketing campaign in order to earn more revenue.
This involves selling supporting items to already existing products or infrastructure.
Resources and capabilities of GE
Camisón and Villar-López (2014) stated that every company need to have potent
resources and capability in order to survive in the changing business world. This can be done
by identifying the resources and increasing it by the methods necessary for gaining the
resources. For example, in the case of increasing the number of employees, it is essential that
an organisation recruit talented employees. The capabilities can be improved by encouraging
the growth of the employees. In the case of GE, Immelt hoped for improving the abilities of
the employees by encouraging growth. It is seen from the case study that the organic growth
of the country was attributed to about 8%. This can be considered as an improvement as the
growth of the company was a mere 5% under Welch. The revenue of the company also
increased due to the rise of the potential of the employees. The increased revenue accelerated
the growth rate as more technologies were used to train the employees. In the case study it is
seen that with the increase in growth and revenue of GE, the company managed to expand in
the international market. This is an important attribute for the survival in the competing

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market of the 21st century. Growth within the organisation as well as outside is an important
step for the success of the company (Beardwell and Thompson 2014).
Changes due to new strategies
Change is an important factor that helps in the application of new strategies in an
organisation. It is the duty of the managers to formulate new changes in the organisation and
encourage the employees to accept the changes. The changes that Immelt felt as a need in GE
involve the structure of the organisation as well as the culture. This was mainly due to the
fact that the company was undergoing a transformational phrase that involved new
challenges, new managers as well as new policies of the business. Hence, the base of the
company needed to change in order to cope up with the changes in the business world. GE
underwent changes in the leadership style. During its initial stage in the market, the
promotion from a junior post to a senior post mainly came from the internal sources.
However, with the changing time, the promotion of the employees seemed totally based on
the performance. Johnston and Bate (2013) stated that internal promotion also helps to keep
the employees motivated. Targets are provided to the employees and the performance
management system is analysed based on the successful fulfilment of the target. Immelt
focused on maintaining the target by focusing on the earning and growth of the enterprise.
GE has managed to reduce the overhead cost and have managed to improve the productivity
of the employees by the application of the target method.
The growth rate of GE can be determined by the internal talent that it possesses. Lin
and Wu (2014) observed that an organisation is good for its employees. In order to analyse
the growth rate of the company, GE managed to shift the strategic priorities towards the
growth of the employees. This was evident during the financial crisis in 2008 during which
Immelt reduced the long-term loans in order to focus on the increase in revenue of the

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company. The skill and attributes of the employees are based upon the exposure to the talents
in the field of work. Immelt also gathered benchmarking strategies in order to encourage the
employees to develop the talents.
In the case study, it is seen that Immelt amassed massive changes in the organisational
structure. This was mainly done because the organisational structure remained in existence
since the time of the inception of the company. The new and modern world warrants an
improved organisational structure in order to ensure a smooth running of the business. Under
the managerial capabilities of Welch, GE had been divided into various small divisions.
However, Immelt managed to unite the divisions in the hope of maintaining the goals of the
organisation. Consequently, the business sectors were reduced but the growth rate of the
company kept on increasing. The case study provides evidence that during the years 2002,
2005 and 2008, the business sector of GE reduced from 12 to 5.
Carlopio (2010) stated that innovation is important in order to maintain product uniqueness.
Profitability and cost control policy led to the increase in the innovative nature of the
business in GE. However, it is to be kept in mind that innovation in large projects often leads
to the cause of risk. The manner in which the likelihood of the business increased due to the
innovation process proved that Immelt focused his attention on the improving the innovative
department of GE. The case study points out the market strategies were also improved by
Immelt in order to transfer the business to the research and development department. The
research and development helped in increasing the technologies that were necessary for
understanding the business market. Hence, these changes were aligned with the initial
declaration that was made by Immelt. The success of GE points out to the fact that meeting
the organisational strategy is a united effort of the employees as well as the manager of
Immelt.

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Considering alternative strategies
In order to ensure that the strategies of an organisation do not fail, it is necessary that
every manager develop alternative strategies that can help in providing back up to the
organisation. The alternative strategies also act as secondary strategies that can be used in a
short-term length in order to ensure the development of an organisation (Booth 2015).
However, the alternative strategies need to be formulated after analysing the factors that may
cause risk. The risk factors include the internal as well the external factors that may hinder
the progress of an organisation. The alternate strategies prove as a reimbursement factor for
the initial mistakes committed by an organisation.
The case study highlights the fact that after the initial appointment of Immelt as the
manager of GE, the company did not have success as it was expected. This was mainly due to
the existence of certain internal as well as external factors that led to the hindrance of growth
of the organisation. Some of them included the bombing of the World Trade Centre and the
financial crisis of 2008. In order to ensure that the collaboration is maintained between the
employees and the managers, an alternative source can be the use of metrics based
measurement of performance management. The benchmarking strategy is a prime example of
the manner in which most companies in the United States achieve the desired results
(Rothaermel 2015). The case study highlights the fact that since its inception in Immelt, GE
has mostly seen the downfall of the revenue and financial considerations of the company.
Hence, Immelt’s role as a manager is vague due to the less contribution made for the
company.
In order to understand the performance of the companies in different sectors of the
country, it is necessary to identify the products and services of the company. The analysis
shows that the profit in different sectors varies due to the products and services sold by the
companies (Wheelen and Hunger 2017). As such, there has been a fall in the profits for most

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companies. An example can be cited that highlights the decrease in profit in sectors that
supply natural resources. The case study states the fact that supply of natural resources like
power and water has seen a decrease in profit from $5.80 billion to $5.35 billion in the space
of four years. Hence, it is the duty of the marketing department to ensure that the marketing
department makes considerable research before investing in the market. A proper marketing
management is necessary in order to maintain the profits of the company.
GE needs to ensure that proper sectors are undertaken for investment. The fact that
the company invests in the healthcare sectors is an important profit-making strategy of the
company. Immelt also ensured that investments that were not required by the company were
reduced. This included the less use of plastics that was not compatible with the company. The
biggest opportunity to GE is the fact that the US Financial Regulation identifies the company
as a changing financial sector of the country. GE also considers targeting internationalisation
of business. The view of Immelt is the fact that global presence can help in increasing the
cost-effectiveness of the company. In this regard, certain decisions taken by Immelt can lead
to the downfall of the company. Investing in a poor country like Nigeria may decrease the
chances of profit-making for the company. Hence, understanding the alternate strategies can
help in decreasing the loss of the company.
Conclusion
Hence, after the analysis of the case study, it can be said that the challenges faced by
Immelt after acquiring the managerial duties of the country were severe. The fact that Immelt
managed to maintain the reputation of the company despite its fall in profit in the initial years
explains the managerial prowess of the individual. The changes incorporated have resulted in
difficult times for the employees. However, a further analysis states that GE has not grown to
the full potential under the managerial capabilities of Immelt.

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