Revised (3 final) by Euiho Suh

Sandy Wibisono

Address: General Electric Company

Internet Registrations
3135 Easton Turnpike
Fairfield, CT 06828-0001
USA
One of the world’s most admired companies, GE

World’s Most Admired Companies, 2006World’s Most Admired Companies, 2015

GE is in the list of world’s most admired companies more than 10 years

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GE net income graph

How GE can become one of the most successful companies in the world?

3
 Founded in 1878 by Thomas Edison.
 Focus on Generation , Distribution, and use of electric
power to become.
 1978 – Power Generation , household appliances,
lighting + Aircraft engines, medical systems and Diesel
Locomotives.
 1960
• strengthen its
corporate staff
1950 and develop
• Decentralization sophisticated
planning
systems

1930
• centralized

GE –a Bellwether of American Management Practices

 Strategy-SBU based structure and planning processes
• 10 groups, 46 divisions, 190 departments, and 43 strategic business units
• Develop a constructive business-government dialogue
• Wall Street Journal proclaimed him as a “management legend”
Success
• Sales more than doubled ($10 billion to $22 billion) and earnings grew even
faster ($572 million to $1.4 billion)
• A major thrust into international markets
• Expansion of world trade and restoration of U.S. competitiveness
 1935: born in Salem, Massachusetts
 1957: BS in Chemical Engineering
 1960: MS and PhD in Chemical Engineering
• 1960: Joined GE as a chemical engineer
• 1972: Elected GE’s youngest VP
• 1979: Vice Chairman
• April 1, 1981: Became the 8th Chairman and CEO
of General Electric
 Challenge form outside GE
 Economic recession
 High interest rates
 Highest unemployment rate since the depression

 Challenges from GE
 Massive information and inefficient macro-business
  “A decade from now, I would like
General Electric to be perceived
Services Technology
as a Unique, high-spirited,
Industrial Entrepreneurial enterprise…the
GECC Information Electronics most profitable, highly
Construction & Medical Systems diversified company on the earth,
Engineering Material
Nuclear Services Aerospace with world quality leadership in
Aircraft Engines every one of its product lines”. --
Core Jack Welch
Support Lighting
Outside
Ladd Petroleum Major Appliance
Motor Housewares
Semi Conductor Central Air-Conditioning
Transportation
GE Trading Co. Turbine TV&Audio
Utah Mining Construction Cable
Equipment Mobile
Ventures Power Delivery
Calma Three-Circle Vision for GE Radio Stations
 Challenged everyone to be “better than the best”
 Sold more than 200 businesses and made over 370
acquisitions
 Insisted GE become more “lean and agile” resulting
 Delayering: elimination of the “sector” level
 Downsizing: elimination of about 123,450 jobs
 Divestiture: elimination of an additional 122,700 jobs
 Replaced 12 of his 14 business heads
 Best
Work Out Software
Practices Iniatives

Going Developing
Global Leaders

Second Wave
Boundaryless Service
Behavior Businesses

Six Sigma E-Business

Third Wave
 A process designed to get unnecessary bureaucratic
work out of the system while providing a forum in
which employees and their bosses could work out new
ways of dealing with each other.
 How to increase Productivity ?

Michael Fraizer of GE’s Business Development

• They focused more on developing effective processes than controlling

individual activities.
• Customer satisfaction was their main gauge of performance.
• They treated their supplier as partners
• They emphasized the need for a constant stream of high quality new
products designed for efficient manufacturing
 1989 – appointed Paulo Fresco as head international
Operations.

 a key negotiator on the thompson swap

 Continued to broker numerous international deals
 a joint venture with German-based Robert Bosch
 a Partnership with Toshiba
 Acquisition of Sovac , the French Consumer credit Company
 Loyal Creative Strong People

Self- Passion for

Professional
Confidence Excellent

Capacity to
Aggressive develop Change
global brain
 To strengthening GE’s Individual Businesses

Integrated Diversity
The Boundaryless
company we envision
will remove the barriers
among engineering,
manufacturing,
marketing, sales, and
customer service; it will
Boundaryless Company recognize no distinctions
between domestic and
foreign operation …..
 1990 , Welch Introduced the notion of “stretch” to set
performance targets and described it as “using dreams
to set business targets, with no real idea of how to get
there.”
 Stretch Targets did not replace traditional forecasting
and objectives-setting process.
 In 1994, Welch launched a new strategic initiative
designed to reinforce one of his earliest goals: to
reduce GE’s dependence on its traditional industrial
products.
1980 1990 1995 1998
2
15%
1
2 1 33%
45% 45%
1 2
55% 55%

2
1 67%
85%

Products Services
 Issue
 When a 1995 Company Survey showed that GE
employees were dissatisfied with the quality of its
products and processes.
 Six Sigma (Motorola Inc and AlliedSignal)
 Improve Quality
 Lower Cost
 Increase Productivity
 1996 – Boca Raton- Welch announced a goal of
reaching Six Sigma quality levels company – wide by
the year 2000, describing the program as “the biggest
opportunity for growth, increased profitability , and
individual employee satisfaction in the history of our
company.”
4 weeks training 6 weeks of Full time six
Green Belts

Black Belts

Master Black Belts

5 Months instruction in sigma
implementation statistic , data instructors –
analysis and mentored the
other six sigma Black Belt
tools candidates
through the two
–years process
 destoryyourbusiness.com (www.dyb.com)
 “A – Players”
 Individuals with vision , leadership, energy and courage
 “4 E’s”
 Energy ,
 Ability to Energize others ,
 Edge , the ability to make tough calls
 Execution , the consistent ability to turn vision into
results.
First GE’s Second Cultural Third Boundaryless
Wave Restructuring Wave Changes Wave ness

#1 or #2 – fix, sell, or Work Out

close Best Practices
1981 1988 1990
Discussion Questions & Exam Question Candidates
■ Discussion Questions (DQ)

– 1. What was the problem of the GE corporate culture in 70s and 80s?

– 2. What were the rising problems in GE before JW ?

– 3. What did JW do to fix the problems

■ Exam Question Candidates

– 1. DQ 1 , 2, & 3

– 2. Explain each of those JW did for BI.

– 3. Why do people call JW “A Neuron bomb” ?

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