GE Work-Out Case Study

GE Work-Out Case Study

GE is a diversified manufacturer of electrical products. GE has been the innovator in the industry and pioneered for most of the technological advances. General Electric is a company founded in 1978, has approximately 319,000 employees worldwide, operates in over 100 countries, has production plants in 32 countries and was ranked the most admired company in 2005. It is a company with extensive experience and worldwide recognition, with 130 years of history and of constant adaptation to changes in their environment (Arrendell, 1995).

Question 1

A dramatic change within GE was that of cultural change with the help of work-out. It is considered to be a major effort for spreading across the company to discuss issues and solve these problems that were experienced by Welch by attending the general management course at the company's management development center (Arrendell, 1995).

General Electric's rise to dominance derived from the company's ability to restrict market competition through cartelization in the newly expanding consumer markets of the Second Industrial Revolution, and its ability to gain access to large, secure government markets, especially those linked to electricity generation and military equipment. General Electric was at the forefront of the development of international cartels before World War II, instigating market sharing and price-fixing through the creation of “rings” regulated by the International Electrical Association. Despite challenges by U.S. antitrust authorities after World War II, international cooperation and market sharing continued. In the area of military technology, General Electric developed extensive capabilities as a result of high U.S. government defense expenditure during the cold war, and it continues to benefit from the rises in defense expenditure by every government since Ronald Reagan's; in 2005 its defense contracts amounted to $2.2 billion (HBS 1994) (Beckerman, 1998).

Large protected markets provided the backdrop for diversification into the financial and media sectors. Thus, in the areas of media and entertainment General Electric succeeded in creating large organizations capable of developing market power in entertainment and communication sectors, most notably in 2004 with the creation of NBC Universal, which combined NBC and Vivendi Universal to create a $43 billion media empire (Beckerman, 1998).

General Electric, along with other U.S. manufacturing multinationals, has utilized outsourcing and the establishment of maquila production systems along the U.S.-Mexican border as a mechanism for cost reduction. The company's diversification into distribution and logistics through its Trailer Fleet Services division has been used to service U.S. ...