GE Organizational Restructuring

General ElectricOrganizational Restructuring

• Flexible organization• Creativity stage

Late 19th Century: The Edison Era

Early 20th Century

• Diverse but centred on the electrification program

• Virtual absence of competition

• Highly centralized corporate

firm

IntroductionBoundaryles

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Glocalization PESTEL Localization Diversificati

on Digitization Conclusion

Post-war Growth and Difficulties

• In 1960s and 1970s GE grew in all fields

• Too large for its existing structures to accommodate• Classified into one of three categories--growth,

stability, or no-growth--to facilitate divestment of unprofitable units

• 1981, a period of radical change

• Return the control of the company to

the periphery

1981-2001: The Jack Welch Era

GE's Restructuring

• The first wave: • "#1 or #2" objective• "three circle concept“

• Core • High-technology • Services

• The second wave• Cultural change | Globalization |

Leadership development |

• The third wave• Leadership development

WHY Boundaryless?

• Perfect for rapid innovation• Jack Welch in 1980s• Banish the barriers and restructure • Restructuring plan• Massive job cuts• Dismantled the 29 layers of hierarchy

and make GE an informal organization


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Boundaryless Behaviour

• Integrated diversity• Open, anti-parochial environment• Friendly • Remove all barriers • Erase group labels such as "salaried",

"management" or "hourly"

PROS• employees,

managers, customers and suppliers can work together, share ideas and identify the best course for the organization.

CONS• structure clarifies

the roles for each member of an organization and dictates the amount of control each member possesses.


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• 50 years of globalization just after World War-II

• Innovation happened in USA, and then the new offerings were distributed everywhere

• Achieved incredible economies of scale


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• Focused on winning market share by adapting global offerings to meet local needs

• However Innovation still existed only in USA


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9/11 terrorist attacks on the United States cost GE's insurance business $600 million — and had a direct effect on the company's Aircraft Engines sector.

Global economic slowdown of 2001

Post- Enron wave of cynicism over corporate financial reporting

Digitization wave (.com)

Sarbanes Oxley Act of 2002


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• “In-country, for country.”

• Production is shifted to Local Countries

Local Innovation

• “In-country, for country”

• Production is shifted to local countries

Reverse Innovation

• The innovations originally chartered for poor countries were scaled and adapted for worldwide use


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Decentralization of Structure

• To localize the business

• GE (India) needs to be innovative and cost effective


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Transportation

Aviation

Power

2012 Analytics Era for 20 years

World power usage to

increase by 50%

1st step towards

digitization


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• Platform open to customers

• Helped for adaption to digital space

• Integration with energy sector

Asset Performance Management (APM)• Analytics to decrease plant production cost and downtime

Operations Optimization (OO)• Plant performance and fleet productivity• Emission reduction using software

Business Optimization (BO)• Flight data analytics• Event Measurement System

GE Digital Team


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Education

GE Organizational Restructuring