Welch and Immelt at GE - Jack Welch and Jeffrey Immelt:...

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Jack Welch and Jeffrey Immelt: Continuity and Change in Strategy, Style, and Culture at GE CASE ASSIGNMENT As the investment community watches to see if GE will be able to sustain a double-digit growth rate under Immelt's direction, the CEO is reviewing his actions as the strategic leader of GE over the past five years. He has asked you to analyze the effects that his decisions have had on the company and to make suggestions to enhance their impact on the organization. Your report should address the following key strategic issues: 1. What are some of the steps taken by Immelt to demonstrate that GE is not overly dependent on acquisitions to fuel the company's growth? 2. Contrasting Immelt's leadership with Welch's, what results are expected as the organizational culture evolves under Immelt's direction? 3. What can you suggest to further stimulate strategic entrepreneurship (internal innovation) at GE? 4. What other recommendations can you make to improve Immelt's effectiveness and drive performance results to meet stakeholder expectations? You should be prepared to discuss your findings with Immelt and several members of his top management team. 129
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Jack Welch and Jeffrey Immelt: Continuity and Change in Strategy, Style, and Culture at GE STRATEGIC ACTIONS: STRATEGY FORMULATION AND IMPLEMENTATION 1. What are some of the steps taken by Immelt to demonstrate that GE is not overly dependent on acquisitions to fuel the company's growth? GE is widely regarded as one of the most profitable and well-managed companies in the world. However, the company has received criticism for being excessively dependent on acquisitions for its growth. Investors are also concerned about how the company can achieve Immelt's promise of double-digit growth when several of its units (such as Aircraft Engines, Aviation Services, Plastics and Industrial Systems) are vulnerable to downturns in the economy. Even GE Power Systems, one of the big drivers of growth at GE, faces large write-offs due to cancelled orders. Immelt plans to continuing using acquisitions as a vehicle for growth, strategically diversifying into new and fast-growing industries to reduce dependence on industrial businesses that are prone to cyclical turns, low in margins, and characterized by slow growth. Recent acquisitions for this purpose include: Acquisition Industry Universal Entertainment Media content Amersham Biosciences Instrumentarium Medical equipment Edward Systems Security Ionics and Osmonics Water Enron Wind Renewable energy Analysts acknowledge that Immelt is showcasing a bold business transformation through these deals. GE's acquisitions are not simply to fuel expansion, but also to improve the business portfolio. Reshuffling GE's portfolio to improve investor confidence, Immelt is signaling to stakeholders that GE is a strong company, with a successful business model, and a business mix strategically designed to perform over the long-term. GE has always been a global company, but Immelt has identified the potential to push it
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Welch and Immelt at GE - Jack Welch and Jeffrey Immelt:...

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