Vivian Giang 2011 Gaps in Immelts Leadership Analysts and strategist argue on

Vivian giang 2011 gaps in immelts leadership analysts

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(Vivian Giang, 2011) Gaps in Immelt’s Leadership Analysts and strategist argue on Mr. Immelt’s vision of back-to-the-future-style approach. He is taking GE back to pretty much what it was like in 1980s when Welch inherited it. GE has almost lost its status as a conglomerate after withdrawal from varied businesses over the past decade albeit, it remains a major company with almost $216 billion revenue. Instead of cutting the GE Capital limb which brought in 28% of the organization’s revenue and using the money for immediate financial benefit of shareholders and investors Jeff could have taken a bolder step of understanding the regulations and working around it. Jeff has downsized the core businesses of GE from eleven in Welch’s tenure to a mere six now that he claims is in line with company’s strategy to focus on what it knows best. In the end, the primary focus of General Electric investors is shareholder return, and the GE stock was trading for $40 per share when Immelt became CEO, the stock's price currently is $30 per share. (Adam Hartung, 2015) Jeff Immelt’s positive business impact It has been a long corporate journey for the recognition that GE’s real strengths lie in the industrial engineering instead of financial engineering. (Lohr, 2015). In GE’s strategy page
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ANALYSIS OF GENERAL ELECTRIC Page 13 published in 2014, GE is repositioning the company to be the world's’ best infrastructure and technology company, with a smaller financial services division. GE restructured its portfolio from the combination of Industrial (40%), Appliances (20%) and Capital Insurance (40%) in 2001 to Industrial (60%) and Capital (40%) in 2014. Since 2001, GE made several major moves including purchasing Enron Wind Assets and Smith Aerospace to strengthen the energy and aerospace sector. In the meanwhile, GE also sold the insurance, plastic and NBCUniversal businesses in order to respond to the focus of industrial engineering side. In 10th April 2015, GE announced that it is selling most of the real estate asset of GE Capital, the financial arm which was once largest part of the company. The move of terminating GE Capital also dismantle one of the strategic initiative of Welch, the creation of financial institution inside a corporation industrial icon. The sale would return up to $90 billion to investors through a combination of dividends, share buybacks and completion of Synchrony spinoff planned for late in 2015. The completion of the restructure enable GE to have a stronger focus in industrial engineering. Immelt advocates the transparency of the financial reporting. Following Enron’s crisis, Immelt defended GE's reporting standards and the quality of its financial statements. In 2001, his first year end as CEO, Immelt innovatively offered the market and the SEC a choice in financial reports, a new dramatically expanded set of reports with additional disclosures. (Reason, 2008) Immelt values GE as a global company. In his interview with Henry Blodget from Business Insider, he stated that “ I always have an idea to maybe make the company more focused on things...that’s a high-tech, manufacturing-based, global product and service enterprise.
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