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Organization and Management Case Study

GE: WORKOUT
(FINAL EXAM)
TABLE OF CONTENTS

I. INTRODUCTION/BACKGROUND------------------------------------------------ 1

II. POINT OF VIEW--------------------------------------------------------------------- 1

III. STATEMENT OF THE PROBLEM------------------------------------------------- 2

IV. AREAS OF CONSIDERATION (S.W.O.T)---------------------------------------- 2

V. ALTERNATIVE COURSES OF ACTION------------------------------------------- 3

VI. STRATEGY FORMULATION------------------------------------------------------- 4

VII. ACTION PLANS/PROGRAMS----------------------------------------------------- 5

VIII. CONCLUSION------------------------------------------------------------------------ 6

IX. REFERENCE-------------------------------------------------------------------------- 6
HISTORY AND BACKGROUND

Thomas Edison invented incandescent lamp in 1879.1890 Edisom General


Electric Company formed, then in 1892 merged with Thomas-Houston Electric
Company.

The firm developed best practice standards, including licensing its technology,
developing policies for employees, a formal hierchy, financial controls, restructuring and
automation.

General Electric CEO Jack Welch, former CEO before Immelt,joined GE in 1960 and
observe bureaucratic culture of the company.Upon this he promote innovation he launched a
program called “WORK-OUT”. Welch started this in 1981 as the eighth and youngest chairman
and CEO in the history of GE.

Early 1990’s General Electric established its process and continue its efforts such
divers organizations as General Motors, Home Depot, Frito-Lay, L.L. Bean, Sears, IBM,
and the World Bank.

General Electric CEO Jeffrey Immelt has extended Welch did in formed of WORK-OUT.
He became CEO of GE right after the 9/11 attack.Soon after the 9/11 attact the company faced a
series of challenges after he took over.

POINT OF VIEW

Upon reading the GE’s WORK-OUT concept, I need to understand how this
process formed; the people and the events happen in forming this concept and new CEO
Jeffrey Immelt extend this concept to build the company capabilities to growth.
STATEMENT OF PROBLEM

 What type of change process would you call this? Explain.Why should it work?

 What negative consequences do you think might result from this process?

 Why so you think new GE CEO Jeff Immelt has revised the Work-Out concept?

STATEMENT OF OBJECTIVE

Identify what kind of process Jeffrey immelt is trying to achieve in his role as GE
CEO.What are the changes that Immelt have done upon the initiation of former CEO
Welch implementing WORK-OUT concept.Upon this paper,we need to know first
WORK-OUT concept and know what Immelt have revised upon this process.

AREAS OF CONSIDERATION (S.W.O.T)

SWOT ANALYSIS of Welch Leadership

Strengh Weaknesses

Motivating employees Putting to much pressure on


employees

Constantly identified other leaders at Formed opinion quickly


GE

Aggressive leadership Criticized for some failed acquisitions

Communication
Charismatic

Succession planning

SWOT ANALYSIS of Immelt Leadership

Strengh Weaknesses

People person;more approachble Somewhat soft

Focused on innovation Approach to structured

Increased transparency Spent to much time placatiing


stakeholders

Less demanding leadership style Was reactive instead of proactive at


times

ALTERNATIVE COURSES OF ACTION

Welch: Key Events at GE

As soon as Welch was in charge he made several changes aimed at making GE more
profitable.He insisted that GE should the top players in every segment it operates; failing to do
will result in closure of that particular segment – “Fix it, sell it or close it”

To improve communication at all levels he trimmed the number of management level.

Six Sigma

Mid 1990’s he led to adopt Six Sigma to quality at GE, upon launching Six Sigma the
company invested heavily with his employees.
Six Sigma is a quality standard for improve productivity;quality,speed and efficiency.At
business level it improves profitability,market share and long term viability.The process level it
reduces defects and variation.

Employees were trained at different levels from green belts to master black belts.

Immelt: Key Events at GE

The event of 9/11 attack had lasting effects on the firm.Some sectors of the business dealt
with.We will include the anthrax scare, corporate scandals etc.

Immelt made some acquisitions, sold less profitable businesses,and increased GE’s
global orientation.

Immelt: Changes at GE

Immelt changes in WORK-OUT concept makes investors demand for transparency more
visible, making them more trust on GE.Restructuring equity packages and GE’s porfolio also
makes factor on customers.

External communication and focused on intangible factors instead of just the bottom line
have benefit GE on clients

Internally, increased number of outsiders was brought in and took focus from production
to marketing, stressed innovation and idea generation.

STRATEGY FORMULATION

GE’s CEO Immelt (same as Welch) also believe’s bureaucratic and slow to respond

to change. Work-Out brings together employees and managers from many different functions and

levels within an organization for an informal 3-day meeting to discuss and solve problems and

develop recommendations for significant improvements in organizational processes.


The Work-Out teams then present their recommendations to a senior manager in a

public gathering called a Town Meeting. The logic behind the Work-Out is to identify

problems, stimulate divers input, and provide a mechanism for speedy decision and

action.

More recently GE CEO Jeffrey Immelt has extended the Work-Out concept to

build capabilities in anticipating future technologies and engage in long range planning and

strategic thinking that most companies entrust only to senior management.

ACTION PLAN

Management change process thru Control as a Feedback System. Because GE set

into small teams; people are encouraged to challenge prevailing assumptions about

“the way we have always done things” and develop recommendations for significant

improvements in organizational process. WORK-OUT control themselves through

information feedback,which show deviations from standard and initial changes.System use

some of their energy to feed back information that compares performance with a standard

and initiates corrective action that makes it effectively work.

Negative consequences that might occurs resulting this process were stated in immelt

Weakness.Aside to this feedback -systems needes monitor inputs into a process to ascertain

If inputs are as planned; if they are not, the inputs or the process is changed in order to

obtain the desired result as Feed-Forward system provides.


CONCLUSION

Why so you think new GE CEO Jeff Immelt has revised the Work-Out concept?

Immelt and Welch have different leadership styles and strategies for the company, revision of

Work-Out concept now focused on external communication,communicate with investor and

third parties.Abstract aspect of the business make timely contribution to global competition

could provide promising result.He believes outsiders bring new ideas,creative and perspective

to the company.

But there are similarities also for both leaders, they focused on “Fix it,Sell or close it”

and get winning ideas from other companies.

REFERENCE

www,wikipedia.com/jeffrey immelt

www.slidesshare.net/jack welch & jeff immelt