Development of the organization and change

Since 2001, when Jeffrey R. Immelt became the organization's CEO, General Electric (GE) has undergone a transformation. The 16-year renovation project was the most significant in the business's history. General Electric, formerly a traditional corporation, is now seen by many as a 125-year-old start-up due to the developments. As a leader in the digital industry, it is actively promoting the development of the internet of things. Immelt (2017) asserts that the organization must always adapt in order to meet the difficulties of the future. Although improvement is a never-ending process, GE has made great strides in modernizing its strategy, global footprint, portfolio, staff, and tradition (Immelt, 2017). The study will analyse the outcomes of organisational development and change interventions that took place in GE.

Transformative Interventions

General Electric’s transformative agenda embraced some approaches. The company began by reviewing its portfolio by paying attention to primary industrial businesses and getting rid of slow growth, inferior technology, and nonindustrial firms. The organisation could not simultaneously handle media, pet insurance, and manufacture jet engines. Immelt (2017) stated that by the time he was ascending to the Chief Executive Officer (CEO) position at GE, there existed a common belief that a good manager ought to have the capacity to manage virtually everything. He, however, refuted this notion and expressed that every company and business leaders should be good at particular things. The business’s portfolio was vast and opaque. One business within GE had no idea what the other was doing (Immelt, 2017). No member of the organisation’s leadership had an understanding of its capital balance sheet. Immediately after the Enron saga transparency became a priority (Immelt, 2017).

General Electric reestablished itself as a technology company by doubling its investment in research and development to drive up growth and efficiency. The move sought to revolutionise GE and establish it as a large company that is worth over 100 billion American dollars embraces organic growth. As a result, GE established a global knowledge-based exchange store that would facilitate capacity building across all its businesses (Immelt, 2017).

General Electric took its presence to about 180 countries around the world. The move was guided by the narrative that gone were the days when economic growth rates in the developed economies remained sustained at 4% (Immelt, 2017). They would be replaced by the forces of economic nationalism that were bound to gain strength. At an annual economic growth rate of 4%, businesses would operate with ease in the developed markets whereas commercial activities would not be impressive when the ratio goes down to 1% (Immelt, 2017). The firm had to develop innovative leverage technologies that would allow it and its customers to achieve hikes in productivity. The move thus called for venturing markets that were experiencing higher growth rates in other parts of the world (Immelt, 2017).

Critical to the process of renovation was the plan to relocate resources to finance more growth as well as recognise and solve clients' challenges better. Slowed growth in an organisation is an indication that costs are on the wrong projects. Failure in a big company comes when it imagines it cannot afford something and fails to allocate funds to make audacious moves (Immelt, 2017). General Electric defied this move and threw its weight behind the plan to make itself a digital industrial firm.

Effectiveness of the Interventions

The interventions brought about by Immelt to GE are questionable. The company's performance dwindled making Immelt the fourth worst Chief Executive Officer of a big publicly traded company in America (Hurtung, 2017). Effective interventions strengthen a business making it more valuable (Anderson, 2016, p. 191). The intervention employed by Immelt neither made the firm stronger nor did it make the firm more valuable. In the last 16 years under the leadership of Immelt, economies got hit by recessions, regulatory increment, and financial shocks (Hurtung, 2017). Immelt (2017) argues that General Electric was a tremendous player in the financial services sector and thus it was bound to suffer the adversities associated with the economic challenges. However, other players within the industry did very well under the same conditions, for instance, JPMorgan Chase (Hurtung, 2017). Before the 2007 crash, GE shares were trading at 41 American dollars per share, but currently, the price has gone down to 29 American dollars per share, a decline of 30 percent (Hurtung, 2017). Nevertheless, per share price for JPMorgan went up from 53 to 93 United States dollars representing a 75 percent increase for the same period (Hurtung, 2017). Top management ought to be able to steer an organisation through uncertain financial times (Anderson, 2016, p. 192).

Anderson (2016, p. 192) states that intervention may fail if they do not conform to the superordinate objectives, that is, the mission, core values, and vision. GE geared all its efforts towards becoming a giant in the industrial internet sector. Internet-of-things was the intended area of specialisation with the production of things such as sensors, cloud services, and remote gadgets. They were, however, edged out by other industry players such as Apple, Samsung, and Google who quickly jumped into the technology (Hurtung, 2017). The management paid more attention to the portfolio restructuring rather than the core objective of the firm.

Lack of faith or vision by the top management can derail interventions (Anderson, 2017, p. 193). Instead of bolstering the growth of the firm through disruptive inventions and visionary outputs in the upcoming technology markets, GE's management was primarily shrinking the business through divestitures (Hurtung, 2017). The move mutilated the capital muscle the organisation had thus killing its lending and real estate business. The appliances division that was the industry's leader got sold narrowing down further the volume of the company.

Conclusion

Adoption of changes may only hold if they promote positive growth of an organisation (Rizwan & Latif, 2012, p. 47). According to Hurtung (2017), General Electric is faced with a possible growth stall as it races into the future. An analysis conducted by JPMorgan analysts revealed that GE’s future earnings were likely to go down as result of implementing some of the changes it had implemented (Hurtung, 2017). When Immelt took over the CEO position from Welch, he did not progress with the model of creating disruptive technologies that his predecessor preserved. He instead embraced some more predictable methods that could not take hard turns as well as hold leaders accountable (Hurtung, 2017). Rizwan & Latif (2012, p. 49) argue that predictable actions are a killer of innovation, for instance, they hinder the development of a new formula for success. Deviating from its core business of being a leader in technology gave a leeway to other upcoming market players such as Google to venture into the sector, further complicating GE’s business (Hurtung, 2017).

References

Anderson, D. L. (2016). Organization development: the process of leading organizational change (4th ed.). Los Angeles: SAGE.

Hartung, A. (2017, October 31). As Immelt Leaves GE, Investors And Employees Have Little To Cheer. Retrieved November 22, 2017, from https://www.forbes.com/sites/adamhartung/2017/06/12/as-immelt-leaves-ge-investors-and-employees-have-little-to-cheer/#266ac77a390a

Immelt, J. R. (2017, August 24). Inside GE's Transformation. Retrieved November 22, 2017, from https://hbr.org/2017/09/inside-ges-transformation

Rizwan, A., & Latif, K. F. (2012). Why is it not Possible to Produce a Blue Print for Managing Organizational Culture Change? Abasyn Journal of Social Sciences, 5(2), 43-55. Retrieved November 22, 2017.