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    See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/261097811

    GENERAL ELECTRIC COMPANY CASE STUDY

     ARTICLE · MARCH 2014

    READS

    5,171

    1 AUTHOR:

    Dr. Osako Marie Ngoie (Djemo)

    Argosy University, Chicago, United States

    9 PUBLICATIONS  18 CITATIONS 

    SEE PROFILE

    Available from: Dr. Osako Marie Ngoie (Djemo)

    Retrieved on: 28 March 2016

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    Running head: GENERAL ELECTRIC COMPANY

    General Electric Company Case Study

    Osako Marie Ngoie (Djemo)

    Argosy University –  Chicago

    DBA Program

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    GENERAL ELECTRIC COMPANY 2 

    Table of Contents

    Abstract …………………………………………………………………………………………4 

    Introduction ……………………………………………………………………………………. 5 

    Background of GE Company ………………………………………………………………….. 6 

    Literature Review…………..………………………………………………………………. … 7 

    The Characteristics of Innovation and Change in GE Organization ………………………….. 8

    GE Challenges and Commitments …………………………………………………………….  9

    SWOT Analysis of GE …………………………………………………………………….......10

     Analysis and Evaluation ………………………………………………………… 11 

    Structure Idea Management (SIM) and the System of GE Company ……………………….. 12 

    The diffusion innovation theory ……………………………………………………………... 13 

    The diffusion innovation process ………………………………………………… 14 

    Inter and Intra-Networking Effects on organizations ………………………………………… 15 

    GE core aspect of leadership …………………………………………………………………. 16 

     Executive Leaders ………………………………………………………………… 16 

     Board of Directors…………………………………………………………………...16 

    Effects of Leadership Ethics ………………………………………………………………….. 17 

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    GENERAL ELECTRIC COMPANY 4 

    Abstract

    This paper discusses different characteristics of innovation and change within General Electric

    (GE) Company. Corporations are highly challenged in the business environment by the

    competitors and the customer’s satisfaction. The advanced pace in technology and the

    globalization aspect have allowed many corporations as well as individuals to use their

    creativity abilities and leadership skills to innovate new products and services, also new ways of

     perceiving and presenting things. The change in people’s needs and socio-environmental

    expectations has led GE Company to work through imagination by turning challenges into

    opportunities and weaknesses into strengths. Innovation is the game to play in order to remain

    successful and sustainable in the current global marketplace for all industries.

     Keywords: Leading Innovation, Change, and General Electric Company,

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    GENERAL ELECTRIC COMPANY 5 

    Introduction

    The globalization and the competition on the marketplace have led many organizations

    to improve their products and services through innovation. Creativity plays a leadership role for

    a successful innovation. However, does every new or creative idea lead to innovation? Should

    the company credit the success of innovation to individuals (personnel) with new ideas working

    toward innovating new products and services? Or should the company credit the leadership

    momentum of innovative skill? Why some of the companies are successfully innovative while

    others fail to implement their new ideas in order to produce innovative results? Do the diffusion

    of innovations and innovation process play a grand role for the organizations success?

    In this paper, General Electric (GE) Company is considered to be a case study to answer

    these questions. GE is one of the highly innovative companies in the world. GE works on

    toughest challenges to transform imagination trough creativity into innovations. They find

    solutions for energy, health and home, transportation and finance. This company differentiates

    itself by building, powering, moving and curing the world. GE ensures that they invest in their

    leadership, personnel, and work environment to support the creativity and innovation.

    The organization of this paper includes the Background of GE company, Literature

    review, The characteristics of innovation and change in GE organization, The GE Challenges

    and Solution Commitments, The SWOT Analysis of GE, SIM and the System of GE, The

    diffusion innovation theory, 

    Corning’s Five-Stage Stage-Gate Innovation Process, 

    Application

    of the Innovation Process, Inter and Intra-networking effects on organizations, The role of

    Leadership, Role of Ethics and Responsibility, Principles and practices for implementing

    innovation at GE, Research Summary, and Conclusion.

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    GENERAL ELECTRIC COMPANY 6 

    Background of GE Company

    From the earliest days, GE Company has used the tools of research, combined with a

    little inspiration, to create the world of tomorrow. The legacy of GE’s originality offers a rich

    history based on the following question: “Why predict the future when you can create it?” For

    over 130 years, GE has continued to innovate what has yet to be imagined.

    Thomas Alva Edison opened a laboratory in Menlo Park, New Jersey in 1876 where he

    was able to explore the possibilities of generator and other electrical devices that he had seen in

    the Exposition. From that laboratory, Edison came up with the greatest invention of the age - a

    successful radiant electric lamp. Edison brought his various businesses together in 1890 and

    established the Edison General Electric Company.

    Awkwardly, The Thomson-Houston Company emerged during that same period as a

    dominant electrical innovation company led by Charles A. Coffin and became the Edison

    General Electric Company’s competitor. Coffin is a former shoe manufacturer from Lynn,

    Massachusetts. Both business expanded and realized that either company could not produce

    complete electrical installations relying solely on their own patents and technologies. Therefore,

    the two companies decided to combine their business in 1892. They called the new organization

    General Electric (GE) Company.

    Many of the Edison's early business contributions are still part of GE today. Some of

    these contributions include lighting, transportation, industrial products, power transmission, and

    medical equipment. Earlier of 1890s, GE produced its first appliances electric fans at the Ft.

    Wayne electric works while a full line of heating and cooking devices were settled in 1907. The

    U.S. government started to search for a company that could develop the first airplane engine

    "booster" for the inexperienced U.S. aviation industry in 1976 and identified GE Aircraft

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    GENERAL ELECTRIC COMPANY 7 

    Engines that was established since 1987. Edison's experiments with plastic threads for light

     bulbs in 1893 led to the first GE Plastics department, created in 1930.

    Literature Review

    Some people may argue that individuals with creativity ideas are more important for an

    innovative company, but others will argue that the leadership plays a very important role for an

    innovative company. Both views may be considered true at certain extends. However, the

     perspective of supporting the leaders seems to be more relevant as the organizations have to

    invest in their leaders to ensure that they do develop their own innovative thinking capabilities

    and also have the ability to develop their employees’ and teams’ innovative-creativity skills.

    Rowe and Nejad (2009) stipulate that most of the leaders’ strategies consider human capital as

    an important factor in innovation and the creation of core competencies, and they expend

    considerable effort sustaining the health of this resource (human capital). Therefore, the core

    aspects of leadership are important to leading innovation and change within an organization.

    Hobcraft and Phillips (2012) provide the abilities of leaders to support their importance

    in leading innovation and changes within an organization. Leaders are able to link innovation to

    strategies; they create focus, engagement and passion for innovation; they direct funds and

    resources to good innovation programs; they speed good ideas to market as new business

    models, products and services; and they ensure defined innovation processes in order to produce

    sustainable innovations. Leaders play a vital role in the success or failure of innovation.

    Innovation can be misunderstood and not explicit enough. Therefore, leaders have the duty to

    clarify the role of each participant for accountability purposes. Also, leaders have to make sure

    that the company has built an accurate innovative culture through organizational culture.

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    GENERAL ELECTRIC COMPANY 8 

    GE is one of the world’s largest innovative Companies. GE believes that imagination

    equals innovation. The company is determined to solve the world’s biggest problems by putting

    their collective imagination to work for a better future. The chairman and CEO of GE, Jeff

    Immelt, agree that building strong leaders is a strategic imperative. When times are easy,

    leadership can be taken for granted but when the world is turbulent, great leaders are

    appreciated. GE culture is among its innovations. GE leaders have built the company’s

    innovative culture by providing a place for creating and bringing big ideas to life. GE culture is

    the unifying force for its many business units around the world.

    The Characteristics of Innovation and Change in GE Organization

    In today world of competition, companies are forced to meet the dynamic change of the

    economy, customers’ satisfaction, socio-environmental requirements, etc. Companies have to

    adjust to new competitions and new ways of doing business. Therefore, innovation is a must in

    order to sustain and remain successful. Having a change management control process in place

    ahead of time may reduce the cost of hindrances to leading innovation and changes.

    The growth of a company is a process. GE Company needed to get out of the basement

    in order to grow and be innovation driven. This describes a necessary practice for implementing

    innovative processes for GE Company. GE is a great company, very innovative with big vision.

    Despite all the threats and weaknesses that can slow the company’s performance and efficiency,

    the strengths and opportunities build the company and allow it to survive through tough moment

    in business. The “GE advantage” policy allows the company to achieve the competition

    advantage and enhance the customer values. GE understands the importance of the employees’

    system of innovation while ensuring a great leadership in order to be and remain successful and

    competitive in the current marketplace.

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    GENERAL ELECTRIC COMPANY 10 

    The SWOT Analysis of GE

    Strengths Weaknesses

    Global recognition

    Global strength and competitiveness

    Diversified business portfolio and line

    of operation

    Strong research & development

    (R&D)

    Order backlog guarantees business

    flow in the future

    Excellent management & Strong

    culture in terms of people, systems,

    technology and measures

    Environmental initiatives

    Economic Leader

    Under-performing energy sector

    Bets on financial markets have proven

    unsuccessful with economic turmoil

    Weak revenue growth of industrial

    segment

    Underperforming in Asian markets

    Leveraged

    Generates more than half of its profits

    from GE capital services, hard hit by

    the economic downturn of 2008.

    Threat to flexibility

    Opportunities Treats

    Development of infrastructure

     Aviation industry growth

    Increasing global exploration and

    production

    Servicing and regeneration of

    commercial airplanes around the

     world customer services initiative

    Rise of competition

    Information security

    Senior management - weak

    performance by GE has put doubts on

    Jeff Immelt's ability to be the next

    Jack Welch 

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    GENERAL ELECTRIC COMPANY 11 

    Mergers and acquisitions

    Research and development

    Rising commodity prices

    Exposure to financial markets and

    crisis

     World economic slowdown in the

    US and Eurozone, two of the most

    important markets for GE

    Media depictions 

     Analysis and Evaluation

    The number of strengths in the above table indicates that GE Company is growing and

    enhancing its profitability. Its global recognition, strengths strategies and competitiveness allow

    GE to be in a favorable position as compared to its competitors, in the same sector. The use of

     business units for management presents an effective way to manage the sprawling company.

    This situation not only reduces the possibility of overpowering senior management with work

     but likewise promotes productivity based on accountability expected from the business unit

    managers. The company undertakes multi-activities which highly contribute to effectiveness.

    This is enhanced by the mergers and acquisitions that have diversified the company's product

    range and in turn leading to improvement on profits incurred.

    GE strengths and opportunities have a lot of constraints. Countless threats and

    weaknesses have creep up the performance of the company at some extend by presenting

    r estrictions on the company's management. Some of the threat elements to the company’s

    survival include high levels of competition, financial crises and risk of information loss.

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    GENERAL ELECTRIC COMPANY 12 

    Weaknesses within the company including the poor productivity of the energy sector and

    flexibility threat could impact negatively on the company.

    In order to reduce the impact of threats and weaknesses, the company could use the

    strengths and opportunities to alleviate them. The efficient management can also be used to

     prevent loss of data through implementing proper control measures and to avoid losses which

    could exemplify the situation caused by the financial crisis. And now, GE has a new theory that

    is changing the way of doing their business called “GE Advantage” where GE is pride on

    driving consistency, operational excellence, and enhanced customer value. For this reason, the

    company is placing some big bets on 40 high impact projects that will help increase its speed to

    market, improve the quality of its products and services, significantly reduce costs, and drive

    competitive advantage for its customers and the company.

    Structure Idea Management (SIM) and the System of GE Company

    Structured Idea Management (SIM) can be defined as a structured process of effectively

    collecting, evaluating and managing ideas from employees and any other stakeholder in order to

    turn best ideas into innovation. In other words, SIM is a process where creativity and structure

    are pooled to find efficiently optimal innovative solutions. SIM empowers companies to

    continuously innovate, grow and remain competitive.

    The Structured Idea Management Process

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     professor of rural sociology, Everett Rogers, in his book “Diffusion of innovations”. According

    to professor Rogers, the diffusion is the process by which an innovation is communicated

    through certain frequencies over time among the members of a social system.

    The diffusion innovation process

    It appears that many organizations are predominantly interested in the diffusion process.

    This is explained by the fact that the diffusion innovation theory defines the success and failure

    of any new products introduced in the market. The diffusion innovation process is related to the

    decision making process. Therefore, it’s absolutely rational for an organization to understand

    the theory of diffusion innovation and its process in order to be able to manage and extend the

    range of the new products or services.

    The process of diffusion innovation goes through five stages (Rogers, 1962): awareness,

    interest, evaluation, trial, and adoption. Rogers mentioned that the diffusion process was first

    identified by Ryan and Gross in 1943. In the later editions, Rogers changed the terminology of

    the five stages of diffusion process into: knowledge, persuasion, decision, implementation, and

    confirmation. Nonetheless, the descriptions of stages remained similar trough editions.

    The graphical presentation of the process

    1.   Five Stage innovation process

    Source: Rogers (1962)

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    GENERAL ELECTRIC COMPANY 15 

    2.   Logistic function innovation process, “S  curve” 

    Source: Rogers (1962)

    Comment: This graphic demonstrates consecutive groups of consumers adopting the

    new technology (blue curve) and its market share (yellow curve) which will ultimately reach the

    satiety level. In mathematics the “S  curve” is known as the logistic function.

    Corning’s Five-Stage Stage-Gate Innovation Process

    Marketplace competition and customer’s satisfaction have challenged organizations to

    emphasize on products innovation. The Corning’s five-stage stage-gate process provides a way

    of developing profitable new products. With this process, the project management teams are

    able to move through the production system more proficiently. The Five-Stage Stage-Gate

     process was created by Dr. Robert G. Cooper and Dr. Scott J. Edgett.

    The development of Corning’s Five-Stage Stage-Gate process is accepted and adopted

    as a project management technique for managing innovation and developing new products. This

    adoption has been endorsed after a careful study of how successful project teams work toward

    developing winning new products. The model of stage-gate optimizes the efficiency of a new

     product development process and allows the management to detect and kill poor projects at a

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    very early stage. Therefore, the management of the model is focused on potentially winning

     projects.

    Corning’s Five-Stage Stage-Gate Process model

    Source: Dr. Robert Cooper and Dr. Scott Edgett

    According to Cooper and Scott (1996), the corning’s Five-Stage Stage-Gate System is

    defined as a conceptual and operational road map for moving a new-product project from idea

    to launch. This process allows management and verification of the products’ development from

    one stage to the other. The Stage-Gate Product Innovation system has been referred to as the

    single most important discovery in product innovation

    The Stages of the process

    Each stage in the process is a decision point that leads to a Go/kill or prioritization decision

     point. The structure of each stage is similar to the chart below:

    Source: Dr. Robert Cooper and Dr. Scott Edgett

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    GENERAL ELECTRIC COMPANY 17 

    The Gates of the process

    The Gates in the process are decision points where non well-performed projects are discarded

    and resources are allocated to the best projects. The Gates systems deal with three quality

    issues: quality of execution; business rationale; and the quality of the action plan. The structure

    of each gate process is similar to the Chart below:

    Source: Dr. Robert Cooper and Dr. Scott Edgett

    Cooper and Scott (1996) established some benefits of using the Stage-Gate system:

      Accelerates speed-to-market

      Increases likelihood of product success

     

    Introduces discipline into an ordinarily chaotic process

      Reduces re-work and other forms of waste

      Improves focus via gates where poor projects are killed

      Achieves efficient and effective allocation of scarce resources

      Ensures a complete process –  no critical steps are omitted

    Application of the Innovation process

     Leadership

    Leadership innovative skill is very important to any stage-gate process. There are multiple

    levels of approval in a stage-gate process to keep a new product in development. This allows for

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    The organizational learning processes

    The corning’s Five-Stage stage gate process is a well-established process system that has been

    adopted by many innovative industries to develop and produce new products. However, every

    organization can adapt this process to meet its mission and its goals. The review process after

    every set of results should empower the organization by working toward correcting their

    mistakes and improve the future outcome process. This review phase can be identified as a

    learning process. The more the organization reviews the processed innovation results the more it

    improves its future outcome.

    Inter and Intra-Networking Effects on Organizations

    The need for innovation is often refer to as a foremost reason for the development of

    network forms of organizations. Obviously, Networks work to the advantage of the innovation

    spread. According to Robertson, Scarborough, and Swan (2002), Innovation is considered to be

    an iterative, recursive and episodic process surrounding the design and development, diffusion

    and implementation of new ideas for the adopting organization.

    The inter-networking diffusion can be understood as the spread of a new idea or any

    innovation from one person or organization to the other until it reaches a critical mass within the

    network, a point at which the diffusion is self-sustaining and speedily disperses throughout.

    While the intra-networking diffusion understanding relies on how an innovation or a new idea

    diffuses within an organization of adoption. The intra-networking diffusion tries to establish the

    understanding of how the innovation, once adopted, is integrated into the network of the

    adopted organization through innovation use.

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    GENERAL ELECTRIC COMPANY 20 

    Considering the above understanding, both inter and intra-networking effects of

    diffusion innovation on organization are critical for the diffusion process. These inter and intra-

    networking diffusion innovation complements each other and completes the diffusion of

    innovative process.

    Role of Leadership at GE

    GE's Chairman and CEO, Jeff Immelt, has worked very hard since he started his tenure

    in 2001 to transform GE into a leader in essential themes tied to world development, such as

    emerging markets, environmental solutions, demographics and digital connections. Mr. Immelt

    also laid the vision for GE's ambitious “ecomagination” initiative and has been named one of

    the "World's Best CEOs" three times by Barron's.

     Executive Leaders

    The men and women who are driving GE's many businesses are highly considered as the

    top leaders in their industries. They are the new generation of leaders and each is leading their

    respective organizations to become closer to their customers, while finding new operational

    efficiencies and ways to work toward a distinguished future.

     Board of Directors

    GE's Board of Directors provide comprehensive oversight of the major strategic issues

    of the company while ensuring that the company serves the interests of shareowners and other

    key stakeholders with the highest standards of integrity and compliance. However, critics and

    wise counselors are among some social issues that are raised most of the time to ensure that the

    company is serving equally.

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    GENERAL ELECTRIC COMPANY 21 

    Role of Ethics and Responsibility

    Leaders are called to set an example for its followers. They play a responsible role

    within the organization. Leaders are considered to be role model for the employees, or their

    team members; therefore they can have tremendous impact on their life, behavior, moral,

     productivity, efficiency, etc. Leaders demonstrate ethical behaviors when they are doing what is

    morally right, just, and good, and when they help to elevate followers’ moral awareness and

    moral self-actualization. According to Zhu (Spring 2008), ethical leadership encompasses more

    than the fostering of ethical behaviors.

    Ethical leadership can have positive or negative effects on organizational performance.

    Innovative organizational processes are supported and enhanced by leadership ethics and values

     because it fosters the development of one of the most crucial success elements; trust. An

    innovative organization engages everyone throughout the organization in the task of developing

    and implementing new ways to reach the organization's goals. The leadership can affect

    ethically or unethically the organizational innovation and change.

    For instance, corruption among leaders within the organization of innovation and change

    must not be tolerated as it will spoil the workplace and diminish their responsibilities. This

     behavior will spread in the organization and affect the trust and collaboration. Meanwhile, the

    leadership awareness is a positive attitude that will encourage every worker and stimulate

    everyone to do they share of work. The leader’s awareness will affect positively the

     performance of the organization innovation and change. Ethics and responsible behaviors are

    required for qualified leaders and personnel.

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    GENERAL ELECTRIC COMPANY 23 

    Research Summary

    GE is a great company, very innovative with big vision. GE works on things that matter

    with a philosophy of “May the person with the best idea wins”. GE Company understands the

    importance of using the brain of the workers. GE knows how to reward and celebrate people

    who live at the “value” and standard of the company.The company takes on the toughest

    challenges to build better people and better technologies. The company wants to make sure that

    they find solutions in energy, health and home, transportation and finance. GE is building,

     powering, and moving the world. This company does not just imagine these things but works to

    make it happen.

    Despite all the treats and weaknesses that can slow the company’s performance and

    efficiency, the strengths and opportunities build the company and allow it to survive through

    tough moment in business. The “GE advantage” policy allows the company to achieve the

    competition advantage and enhance the customer values. GE understands the importance of the

    employees’ system of innovation while ensuring a great leadership in order to be and remain

    successful and competitive in the current marketplace.

    GE also understands that for its employees to flourish their performance, they have to be

     placed in a sound work environment. That is why GE is committed to strengthens and use any

    opportunity their get to support its leadership culture through systems and policies that foster

    open communication, maintain employee and partner privacy. The company fights hard to

    reduce its weaknesses and threats while assuring employee health and safety, and reduce the

    cost of products to meet customer’s satisfaction. 

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    Conclusion

    In this paper, GE company was used as a case study on organizational Innovation and

    change. Different characteristics of innovation and change have been discussed within GE

    Company. The competition on the actual marketplace in the world has challenged GE company

    to come up with new ideas and innovative ways of developing and producing its products and

    services. Dr. Cooper and Edgett have solved the competition argument by producing an

    innovative system called corning’s five-stage stage-gate process. This innovative process has

    allowed companies, such as GE, to reinvent their ideas and launch new products and services. It

    is more effective, efficient, faster process that improves the product innovation results. Leaders

    and individuals within organization have to work in network collaborations in order to meet the

    goals of their organizations, stand out the competition with innovative products and solve any

    financial or sustainability challenges that the organization comes across. The inter and intra-

    networking effects are critical for GE diffusion innovation process. That’s why the SIM has

     been very well integrated in GE Company, this has allowed the company to become one of the

    most innovative, profitable, and admired companies on earth. The SIM can also be used to

    resolve resistance to change by communication and management.

    Thus, while the current discussion addresses key features of organizational innovation

    and change that determine the success and sustainability of GE, more research is necessary to

    understand and help GE Company remain competitive in this hungry world of creativity and

    innovation. Innovation is the game to play in order to remain successful and sustainable in the

    current global marketplace for all industries.

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    gate-process/

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    http://www.wikiswot.com/SWOT/12_Conglomerates/General_Electric.html

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    Karlsson, M. (2011, September 26). Innovation Management: How to Successfully Implement

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    collaborative-idea-management-2/

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    Kafelnikov, V. (n.d.). Creating Corporate Environment Where the Best Idea Does Win: Case in

    Point of GE. Retrieved from http://www.1000ventures.com/business_guide/-

    crosscuttings/change_enviro_best-idea-wins.html

    Prokesch, S. (2009). How GE teaches Teams to Lead Change. Harvard Business Review.

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    Richet. (n.d). Hubbpages. SWOT Analysis of General Electric Company. Retrieved from

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    Rowbotham, L. and Bohlin, N. (2003). Structured Idea Management as a Value-Adding

    Process. Retrieved from http://www.adl.com/uploads/tx_extprism/1996_q2_31-36.pdf

    Rowe, G. and Nejad, M.H. (2009). Strategic Leadership: Short-Term Stability and Long-Term

    Viability. Ivey Business Journal. Retrieved from http://www.iveybusinessjournal.com

    Shrivathsan, M. (2012, April 2). Practical Innovation Management: What is Idea Management?

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    management-blog/2012/04/idea-management-definition-benefits/

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    Zhu, W. (Spring 2008). The Effect of Leadership on Follower Moral Identity: The Mediating

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