General Electric Company Management

General Electric Company Management

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General Electric Company Management

Management in the business world can be challenging, especially when involving a multi-business corporation. This is attributed to the fact that leadership in business consists of the guidance of developing, maintaining, and allocating various organization resources. It strives to attain organizational goals. The management process is based upon four fundamental principles within the organization: organizing, planning, and leading addition to controlling the organization. As the companies expand their operations and business to become a public limited company, there are challenged by the extreme pressure exerted upon them to offer favorable quarterly results in the industry as well as demonstrate high proficiency in the four key principles of organization management (Kopmann et al. 2017)t. General electric company I a united states based company that has grown from scratch and expanded to capture the international market. The company offers services and products to various companies such as aircraft engines, medical imaging, power generation, and oil and gas production machinery. The company’s rise led to the company’s crowning as the best corporation in the world up to recent regrading of the company to a much-reduced outlook class of companies.

Principles of management

In the management of any business engaging company, certain principles must be addressed and paramount for the company’s success. In the General Electric Company, several principles are addressed. Some of the principles addressed include the devastation of the financial services, restructuring of the business portfolio, and the virtue of an integrated management system in addition to the knowledge sharing among the company businesses. The integrated management system is described as the single system of managing various organizations’ departments in alignment with the multiple standards (Kopmann et al. 2017). These multiples means are comprised of quality, environmental, and safety, as well as health management. The integrated system of governance is designed to aid in saving time as well as increasing the efficiency of government by compiling all elements of the management system to be addressed as a whole (Frefer, Almamlook, and Suwayd 2017). The management design comprises several components such as policy and commitment, planning, implementation, and operation, as well as hazard identification and control. In addition, the system is comprised of education and training and performance evaluation as core elements in its application. The General Electric company, through the top management, successfully emerged as the best management corporations in the world as the administration argued that through virtue of integrated management and sharing among the company’s businesses, the General electric company was not a conglomerate (Frefer, Almamlook, and Suwayd 2017).

Different management comes along with other modes of management. The restructuring concept entails the activities that are adapted to modify the company’s operations and the company’s general structure to reduce the company’s financial instability and improve the company’s business (Usyor et al. 2021). The portfolio principle of management is thus described as the process in which the money manager ignites the change of the securities represented in the fund aligned with the individual investment goals he is determined to realize with the organization in the market (Frefer, Almamlook, and Suwayd 2017). This principle thus incorporates the sale of the assets deemed to be no longer useful within the organization and purchasing of those new assets believed to assist in realizing the company’s success. Culp, who was once the chief executive officer, adopted this principle of restructuring the business portfolio in his management at General Electric company (Wise 2020). A diversified business portfolio often leads to the business’s success as it provides strengths through disruptive events and commodity values hence contributing to the multi-business company. Fundamental principles in the business restructuring portfolio include the environment and emerging markets, which offer higher GDP growth rates, infrastructure, and demographic factors that contribute to various market opportunities for goods and services (Frefer, Almamlook, and Suwayd 2017).

Since companies are all motivated and working to maximize the profits, the principle of divesting financial services is applied in the management. Divestment principle application in business management entails selling the company’s various subsidiary assets, investments, and some of the company divisions (Wise 2020). The aim of the use of this method is to maximization of the parent company. Depending on the management, this principle of control can be applied as a strategy to achieve other strategic business, financial as well as social, and political goals and objectives. This management principle is a bit risky as it benefits those who can execute both the strategy and execution or may break up the value since the shareholders may be out to punish the manager’s mistakes (Usyor et al. 2021).

The application of various principles in the management may break out the business if not carefully applied. The application of the divestment of financial services deprives the company of competitive advantages that it enjoyed before the application of the principle. Like the divestment principle of management, the business restructuring portfolio reduces the business’s profitability, something that might lessen the operational capital (Usyor et al. 2021). This thus could translate to the management crisis, which places the business on the verge of collapsing. The diversification of the business activities into various conglomerate threatens the business success as the business operations are split into different departments, which become challenging to manage (Wise 2020). This could further translate to some of the department’s underperformance at the expense of other best-operating departments. The profits realized from the best performing departments are spread across the less performing departments hence decreasing the business’s profitability

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As outlined in the case study, the General Electric Company’s management applies various control principles such as divestment of finance, diversified management, and a business restructuring portfolio (Usyor et al. 2021). The company boasts being a diversified company where the company comprises jet engines, oil and gas equipment’s and services. Under Emmert’s management, this kind of business restructuring to a more profitable market venture was designed (Kopmann et al. 2017). Although the nature of conglomerate- the diversified company was being viewed as old-school-enabled the company to rise to its best-managed business status. The stock market later realized the conglomerate discount as the fueling factor for the widely-diversified company’s success.

As proposed by Culp, the business portfolio restructuring acuminated to his appointment to the position of Chief Executive Officer since he was viewed as having the best strategies for the business’s success. The diversified business portfolio of the General Electric Company led to the stability of the business cycle. This is through the disruptive events and commodity cycles that translate to the multi-business company, hence the company’s dominance in the various industries. Wise (2020) argued that exploiting the various profitable business opportunities for long-term growth as proposed Immelt. The business portfolio entailed the four fundamental concepts demography that created the multiple options for market, infrastructure, emerging markets, which offered higher rates of gross domestic product, and the environmental problems that demanded new and innovative technologies (Frefer, Almamlook, and Suwayd 2017). During the management tenure of Immelt, the General Electric company was able to undergo reconfiguration through his acquisition of the infrastructure-related companies and divesting the consumer and financial service businesses. The Shrinking of the General electric company’s capital through the freeing of financial services deprived the business company of economic freedom, which arose from the nonbank supply of financial services in 2013. The divesting of the financial services further negatively affected the company as the competitive advantages were stripped (Kopmann et al. 2017).

The menace in the General Electric company can be addressed through various actions if pointed down by the management. The separation of the business into an individual company may help the company have better-centralized management, hence solving its problem of accountability (Frefer, Almamlook, and Suwayd 2017). For instance, creating a stand-alone company dealing with medical supplies and services will ensure centralized management of the business and no overlapping of responsibilities (Miyata 2017). A stand-alone will offer competitive products and services as the company will invest in the best of the technology and have the independence of advancing in the area of specialization. This will ensure that the company has full control of the industry to which the company has chosen to start. The business portfolio structure leads to the selling of outdated assets. The company can meet the goals that are set (Usyor et al., 2021). The drawing of a business structure as well as acquiring the qualified personnel who are innovative during the investment of the money obtained from the sold-out assets ensures that the company remains afloat in the market.

Instead of divesting the general electric company’s financial services, the merging principle with other companies in the market may help solve the cash crisis problem. The merging, which could be a 50% deal, enables the company to deprive of that financial obligation that it is experiencing as it is provided with financial aid to that 50% level through it can settle the debts (Usyor et al. 2021). Since the company does not wholly sell off the company, merging with the various other companies will ensure that they provide better products and services to the market hence continue to dominate the market (Kopmann et al. 2017). During the merging process, the company may get some affiliation with some of the institutions offering educational resources to the students; hence, the staff can advance their skills.

Question 1

The General Electric company was considered an exemplary organization through the use of more advanced management systems in the general operations. For instance, the company used the diversified corporation method of conducting business. This method was able to enjoy the conglomerate discount in the stock market (Kopmann et al. 2017). The management board also championed the company’s ranking as an exemplary organization as they appointed chief executive officers based on objectives and quantitative performance measures. The company’s culture of management to be centered around the talent earned the company the status. The general commitment of the company to leadership development through reliance on the internally developed executives translated to a higher ranking of the company (Frefer, Almamlook, and Suwayd 2017). The General electric company’s ability to conduct a diversified business and greater independence from external financing demonstrated better financial managed, hence earning an exemplary organization’s status. The rich cross-business synergies realized from the sales and marketing earned the company the status. The successful company-country relationships across various developmental projects further channeled the company’s success to a good outlook.

Question 2

The General electric company recognized a positive corporate portfolio impact under the leadership of the various Chief Executive Officers like Welch and Immelt. Through the direction of Welch, the company recognized a vast financial services business. During the Immelt tenure, an industrial corporation that was highly focused on infrastructure was created (Kopmann et al. 2017). The general business diversification empire was established through Immelt, whose objective was to exiting the slowly-growing and low-margin sectors to exploit the various profit chances of more attractive industries (Miyata 2017). Therefore, Immelt’s management aligned the organization to the long –term global growth trends, which are still enjoyable up to date. For instance, the success of venturing the organization into jet engines, medical equipment, and electricity distributing systems development in the company was through Immelt leadership.

Question 3

Portfolio management’s success is only possible when a company quits business opportunities whose long-term prospects are unpromising and venturing into more promising sectors. The restructuring of the portfolio was due to the investors’ lack of interest and trust in the conglomerates. The attraction of conglomerates was due to the diversification of risks. The ancient investors would instead diversify by assembling their portfolio of different businesses rather than depending on a corporate manager to design for them, hence the General Electric Company (Frefer, Almamlook, and Suwayd 2017). The company’s allure of share buybacks prompted the restructuring, which translated to the company raising higher capital, like the company gaining $50 from the buyback. The company’s urge to earn a return on capital that exceeded the cost of capital prompted the restructuring.

Question 4

Although the portfolio performance was paramount to the General Electric Company during the Welch era, it is no longer superior. This is because the company has exhausted the market growth opportunities and technologies and cannot cope with the dynamic world. Miyata (2017) attests that the mode has been outdated as companies have copied the use and development even more advanced method hence the need to taming the method old school. During 2016-2018, General Electric’s financial performance dropped due to the great recession, which made the company lose competitive advantages over the other financial services companies (Kopmann et al. 2017). The company was also overstretched and bloated hence the collapse of the company. The corporate turmoil, the falling market value, and lousy subsidiary purchases illustrate the company’s causes.

Question 5

Although the General Electric company has recently faced various blocks in the business world, there is still room for a return to higher performance levels for the company. To return to higher performance levels, the General Electric Company should produce modern quality products at a fair, competitive price. However, the company should refocus on the line of business like aviation, power, and renewable energy (Frefer, Almamlook, and Suwayd 2017). The healthcare system of investment within this organization should be divested as it is a separate entity from other platforms. Even if the company was still interested in the healthcare products and services provision, it should be a different entity, particularly its own company. The company should strive to reduce the debt burden to a considerable amount. The company should also hold discussion forums with its prospective investors in order to achieve higher capital for investments.

Ultimately, the management of multi-business attracts too much pressure on the power of the business. The tension on the direction escalates as the company’s level rises to become a publicly-traded company. Although the General Electric Company was once an exemplary and most desired corporation globally, it faces a much-reduced outlook. Management of a business is based on three principles: the integrated management system, business portfolio, and the devastation of financial services. The application of the various regulations in the management of the business determines the success of the company. General Electric Company was managed under different Chief Executive Officers who were appointed by the board of directors. The company was organized under the integrated management system as it was under a diversified chain of production. The divestment of finance involved the restructuring of the business portfolio under the management of Welch and Emmert. The diversified business portfolio was under the control of the Culp. The business portfolio entails the four fundamental concepts: infrastructure, population, technology, and the emerging markets. The separation of business and refocusing on one type of business is essential for the company’s rise back to business success. The merging of interaction with other companies can regain the capital to continue with the industry as it will have financial security.

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References

Frefer, A., Almamlook, R. E., & Suwayd, M. (2017). Productivity Analysis of the General Electric Company of. American Journal of Management Science and Engineering, 2(6), 192-198.

Kopmann, J., Kock, A., Killen, C. P., & Gemünden, H. G. (2017). The role of project portfolio management in fostering both deliberate and emergent strategy. International Journal of Project Management, 35(4), 557-570.

Miyata, K. (2017). Corporate Growth and Managerial Perception: A Comparative Study of GE and WH, 1946-2000.

Usyor, A. S., Kadir, A. R., & Kadir, N. (2021). Strategic development of makassar new port through swot analysis, boston consulting group and general electric. Hasanuddin Journal of Applied Business and Entrepreneurship, 4(1), 12-21.

Wise, G. (2020). Willis R. Whitney, General Electric and the Origins of US Industrial Research. Plunkett Lake Press.