History of General Electricals

There have been both good and bad periods for General Electricals over the years. The company’s most notable period was when Jack Welch served as CEO. This period saw the implementation of numerous strategic adjustments thatimproved the performance of the business. Similarly, in order to change the company’s future, some strategic changes are currently required. These tactics have been tried and true, so using them to boost GE’s performance is a surefire approach to do so. One of the biggest companies in the US with a global reputation is GE. It is also considered as one of the most innovative businesses; hence, it is a quick business.

GE’s future strategy change recommendations

Another recommendation is the realignment of the administrative unit. The administration is the unit in charge of supervising the juniors and setting targets to be accomplished. Having a highly motivated administration will be a great step towards accomplishing success in the company. In the Jack Welsh era, managers were ranked according to performance. The bottom 10% was fired despite their absolute performance. The top 20% were rewarded with bonuses and stock options to choose from (Anderson, 2016, p. 32). This served as a motivating factor to the managers and they all strived to perform exceptionally well. This strategy keeps the managing team on its toes and this, in turn, is reflected by the worker’s efforts. The use of rewards and punishment as well has been proved to work. This strategy is healthy for an organization and it yields a higher rate of productivity of an organization with time.

It is also important to keep track of what the competition has been up to. This analysis will enable the company to stay in business by being aware of the current issues surrounding the business environment. GE has many primary divisions due to the products it offers. For instance, it has divisions in healthcare, aviation, transportation and other sectors which require electrical energy. A close observation of the market helps it stay in business. There are experts in GE who evaluate any new products and new technology in the market. This keeps the company informed and always ready to handle any changes (Kim, 2015, p. 145). It is recommended that these experts also evaluate the new entrants in the market so that they can identify the market gap and fill it before the new entrants do. This is important and will ensure that GE dominates the market.

Another recommendation is eradicating inefficiencies in production. This refers to saving on costs of production. In order to accomplish this, GE should evaluate the minimum cost that can be used for production and observe the necessary conditions for this. This helps solve economic inefficiency and productive inefficiency (Peng, 2013, p. 17). The cost saved can be used for further production. This will eventually lead to very high-profit margins and lead to further expansions by GE. The objective to be global will then be achieved. To achieve this, it is also crucial to get rid of the things or sectors that are not profitable to the business. This is realized by conducting internal audit.

Consistency is a strategy that when implemented is a sure way to achieve organizational success. GE should focus on the areas that always yield profit for the firm and leave those areas that are striving to sustain their production and distribution (Anderson, 2016, p. 54). For instance, the renewable energy sector in GE has been making good profits in the past and is still expected to make more in the future as more and more people in the world are avoiding oil-based products and encouraging the use of environmentally friendly products such as solar panels. Focusing on this sector will give GE the opportunity to grow and spread its services to a bigger group of consumers. Moreover, openness to new ideas is one way for the company to establish its winning move over the competitors hence dominating the market. This move could attract the customers and make them stick to purchasing GE’s products more than ever before.

It is also recommended to align the company’s vision and mission with the activities conducted. All activities in the production and distribution firms should be focused on accomplishing the company’s long-term and short-term intentions. GE’s mission is to focus on the business activities which connect its central competencies. It aims to be a market leader in these areas. Therefore, the quality of its products should be exceptional in order to achieve this. The management and other senior teams should ensure that the workers are maximizing their time and resources are used properly in the process of production. Furthermore, the quality delivered should be world class so that it can be distributed all over the world. This will serve to expand the market of the company (Kim, 2015, p. 138). Continuous growth is a sure way to usher in a new industrial era and provide more power to the world especially the sectors in need. A careful analysis of the global market is, therefore, necessary to ensure that the market gaps are filled with the appropriate commodities.

Strategies to Sustain a Global Operation

In order to get a broad application of change that can sustain a global operation, some steps have to be implemented in order to ensure this improvement (Anderson, 2016, p. 72). One strategy is to reshape its portfolio. That is, shifting from a broad conglomerate to being a focused industrial leader. This will involve setting different targets of profits and growth rates with reference to the global market. High returns will ensure that the investors repurchase the shares, therefore, increasing the margins and returns. Further, to achieve this goal, the company plans to exit those businesses which are deemed as unsuccessful or non-strategic therefore lacking a dominant market share.

To sustain its global operation, GE has to make major strategic portfolio moves. One of the biggest moves made by the company is the acquisition of Alstom’s Power and Grid business. This was a big move and brought about 65,000 employees internationally. This step also brought significantly higher revenue with an additional $20 billion annually. Alstom is a company that offers products and services which are complementary in the power industry. This move strengthens GE in the power sector globally. This move is likely to sustain GE in the global map especially in the power sector (Peng, 2013, p. 10). Such moves of acquiring companies that offer complementary services have proved to be a sure way of sustaining the company’s global operation.

Additionally, GE has sold one of its non-performing business ventures to Haier. The appliance business was neither GE’s strength nor favorable for profit making. The sale was made subject to certain regulations and approvals. Additionally, GE reduced some of the financial strategies and decided to focus on the industrial services. These moves were made to ensure that the company remains operational on a global basis. To improve this process, adoption of new technology is crucial. New technology ensures that there are higher productivity and automation. This improves the efficiency level and there is a decrease in potential human error through automation (Anderson, 2016, p. 98). Technology also makes communication easier and therefore the needs of the consumers can be heard and taken into consideration. Moreover, it leads to financial savings which is a huge benefit to any firm. This is because production is increased and the number of workers required is lower. It reduces the costs of paying workers and therefore setting the company off for success.

A strategy that GE could undertake to sustain its global operation is acquiring a major solar manufacturer. GE should invest in renewable energy because this requires a cheaper level of investment especially in production. Under the renewable energy sector, there is a high potential for long-term growth (Kim, 2015, p. 151). A consistent growth in this sector would make GE the leading global provider of renewable energy materials such as solar panels. There are attempts to encourage the use of such sources of energy in order to preserve the few sources which are not renewable such as oil.

Another recommendation for future change strategy is to expand GE’s portfolio of life sciences. This includes healthcare units, and bio manufacturing. That is investing in the bio economy because this is a fast growing sector (Anderson, 2016, p. 120). By the end of the next decade, there are plans to construct a $1 billion business annually based on cell therapy. Life sciences offer high margin revenue. This is crucial as it makes up for shortfalls in another part of the industrial portfolio or costs of restructuring.

References

Anderson, D. L. (2016). Organization development: The process of leading organizational change. Sage Publications.

Kim, T. (2015). Diffusion of changes in organizations. Journal of Organizational Change Management, 28(1), 134-152.

Peng, M. W. (2013). Global strategy. Cengage learning.