Zack Gillette
Ian Novel
Tom Salomon
Tarah Waldecher
Project 5
Enterprise
Models Project
Table of Contents
Executive Summary- Page 3
Introduction- Page 3
1.
– Page 4-5
2.
– Page 6-7
3.
– Page 7-11
Conclusion – Page 11-12
Assessments – Page 12-13
References – Page 14
Executive Summary
The fifth project deals with taking a closer look into a company of our choice. General Electric (GE) is the company that we chose to do this project on. We will take a look into the company and see the companies; Goals/Mission, Portfolio, Market Share, profit performance, and take a glance at their technology and information systems. This will allow us to see how well the company fulfills their desired goals and functions.
Introduction
This project will allow our group to see what is contributing to certain success in the business. We get to take a first hand journey into the company and see what type of goals they have in order to install success into their employees. We will also analyze their finances and see what areas they are behind in, and try to track down any problems that might be causing these negative marks. In the end we should all have a better understanding of what GE is all about, as far as Mission, Goals, Profits, Product/Service Portfolio, Market shares, and their roles in information in many areas.
1.)
GE is involved with developing many high quality products ranging from; Jet engines to power generation, financial services to plastics, and medical imaging to news and information. GE employees worldwide are dedicated to turning imaginative ideas into leading products and services that help solve some of the world’s toughest problems.
They are recognized all over the world for the great things that they do.
For more then 125 years GE has been admired for their performance and imaginative spirit. Today GE is 11 technology, services, and financial businesses with more then 300,000 employees in 160 countries around the world. They use a four-step model when describing their success: It’s how we imagine, solve, build, and lead.
Imagine is the power that helps generate all the ideas that GE continues to create. Solve, for GE it’s the power to solve questions that exist in the world. How to solve these problems is what keeps GE thinking of new technology everyday. Build, every company should have a goal to continue to build their company. For GE it’s a way of life, they didn’t reach 160 countries on accident, they have goals driven for growth. Imagine, Solve, Growth, each of these is merely a word without one vital element. Lead. GE is synonymous with leadership, but that doesn’t mean they let off by any means.
In 2004, GE continued to make strides towards their objectives through significant acquisitions, mergers, and dispositions. In April 2004, GE acquired Amersham plc, a world leader in medical diagnostics and life sciences, to complement their existing Healthcare business. In May 2004, we combined NBC with Vivendj Universal Entertainment LLLP to create one of the world’s leading media companies, NBC Universal. In December 2004, GE sold a majority interest in Gecis, their global business processing operation, to two private investment firms. They received cash proceeds of $0.6 billion and retained a 40% investment in Gecis. GE gained $0.3 billion after tax, which clearly is a good investment. In the end of 2004 they declared $8.6 billion in dividends. They reached $750.3 million in total assets. Their cumulative dividend growth since 1999 is charted below.
At years end, GE had made $152,363,000,000 in revenues through General electric company and consolidated affiliates. Their common stock market price is described in the chart below. GE has approximately 5 million share holders.
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Common Stock Market Price |
Dividends |
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(In dollars) |
High |
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Low |
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2004 |
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Fourth quarter |
$ |
37.75 |
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$ |
32.65 |
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$ |
.22 |
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Third quarter |
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34.53 |
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31.42 |
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.20 |
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Second quarter |
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33.49 |
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29.55 |
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.20 |
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First quarter |
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34.57 |
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28.88 |
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.20 |
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2.)
There are many key factors that are contributing to the success of the global business climate for General Electric. To start, there has been a key transformation in the way things work at GE, due mostly to their new leader, Jeffrey Immelt, who took over the helm a few years ago. He is turning the old culture there upside down and the effects are starting to show. It’s basically out with the old, which were the days of managers just becoming experts at managing, to the new ways of risk taking and above all, innovation. Yes, innovation is what he encourages his managers to concentrate on, mainly to become “experts” in their respective industries, and to take risks along the way. What does all of this have to do with globalization at GE? “Plenty” says the 49-year-old leader of one of the world’s largest companies. Where he is taking the company is from a hard-driving process-oriented organization, to one steeped in creativity and growth. What CEO Immelt plans to do is increase the organic growth from 5% up to 8 %, and to do it with existing operations, this in itself is a hard challenge.
There are some underlying factors to all of this. First, GE has strengthened their global presence by concentrating on the right businesses in the right market. By seizing the opportunities now and in the future, their core areas are set for major growth potential.
Next is the way people at GE are using their storied operating skills to realize their new portfolio’s potential. By concentrating on what they know and on existing as well as new customers, they are setting themselves up for a very lucrative future.
Of all the work that has been done in the past few years, the area with the most excitement and promise is in what are called Imagination Breakthroughs (IB). General Electric is developing Imagination Breakthroughs through a process for innovation that applies GE rigor to the creation of products and services that benefit customers. These breakthroughs result in ideas that will take GE into new lines of business, or geographic areas, or into a whole new customer base. Each IB project has the potential for $100 million of incremental growth. Today, there are some 80 IBs and some will take place this year while others could take up to ten tears to fully implement. GE plans to spend $5 billion in Imagination Breakthroughs over the next four years, and they could deliver $25 billion in incremental revenue globally. The underlying factor here is innovation on a global corporate level.
Information is an integral part of any global business and this certainly includes GE. Throughout the General Electric corporate regime, is the process of linking different business units with different locations all within a single resource management system. What has always been a strong point at General Electric is the drive to find something new and pass this information on to its customers with little disturbance along the way. The sticking point here is the cross-functional transportation of information throughout its own organization.
The big push at GE is to get all the companies different businesses to have seamless passage of information. This means any customer, business or consumer, in the US or Europe being able to get information anywhere across the globe, all in real time. There has never been a problem for them to invest it what makes sense; it just should help with the bottom line also. This is where the problem lies. Presently, General Electric is looking to implement a huge enterprise-resource-planning system to tie its 11 business units and many divisions together. They now use PeopleSoft, SAP, and other ERP systems. To integrate all of these could cost well over $1 billion and this could end up being too costly for GE so they are now looking at outsourcing a portion of this. “Outsourcing is a way of doing business now” said one company official, GE will embrace outsourcing in a big way, especially in the area if IT. Who knows, maybe someday General Electric will end up owning an ERP division itself?
3.)
WORK SYSTEM
Work Organization
- Formed in 1982 when Edison General Electric Company and Thomson-Houston Company combined
- Manufacturer of electrical appliances
- Immediacy
- Outsourcing
- Flexibility
Control System
- Network Management
- Knowledge Management
- Information Infrastructure
- Relationship management
Industrial Relations
- High-trust relationships
- Segmentation
- Increased Growth
Human Resource Practice
- Formal Employee Training
- Standardized Wages
- Information Workers
BUSINESS ORGANIZATION
Business Strategies
- Productivity
- Growth
- Mass Customization
- Competitive Pricing
Enterprise Organization
- Local
- National
- International
- Virtual
- Integrated
Work Organization
General Electric is a manufacturer not a merchandiser because they make and produce their own products. This leads needing products to get to stores that sell GE products for immediate stocking and selling, or immediacy. GE depends on outsourcing to get products to the 160 countries GE is located. Flexibility is also important when dealing with communication to and from different countries.
Control System
Knowledge management systems create relationships and efficient information transfer from one department, head quarter, or country to another. Thus keeping a stable and effective information infrastructure. Knowledge management and information infrastructure are important to GE because we rely on other departments and buildings across the world to distribute and sell the merchandise. Making it important that there is a strong connection between head quarters and retailers, all being under one network.
GE depends on technology and networking to communicate with employees, retailers, consumers and other GE head quarters. In order to have a successful network for people who are involved in the company to communicate, the network must always be up and running. Network management is necessary to GE because it creates and supports the systems that the company uses to achieve their goals.
Relationship management will affect management, employees and buyers, which makes it highly important to General Electric. There must always be a strong understanding between employees to be able to communicate with each other and to work efficiently. Making a good and stable relationship with everyone involved in the company essential.
Industrial Relations
Management trust is critical when addressing problems and opportunities of GE, making high-trust relationships a must. Without trust in everyone involved in the company the company would have disposable workers. There is also high segmentation within GE. There is a variety of items and categories of products to choose from that the best way to make an easy purchasing experience for the retailer and customer is to segment each product. Doing so will likely encourage business to a new customer and increase sales. Because of high trust and segmentation the company is looking toward growth.
Human Resource Practice
GE believes in formal employee training. Making each and every employee aware of procedures and operations of the company. General Electric’s wages are more standardized and dependent on seniority and education than demand. It is important for GE to have information workers because there are several little projects to be assigned. GE is also making sure that employees know that the health, wealth and job security is important to the company also.
BUSINESS ORGANIZATION
Business Strategies
GE uses mass customization to serve to customer needs and wants and at the same time meet the company needs for volume. This is important to GE because production must always be in effect but the customer’s needs and wants must always be met. This is also why productivity is important to GE. Production must always be at its best.
To produce the right amount of products and to never leave a company with out inventory of GE products requires GE to always be productive. Which also means that GE must make sure that materials for products are always in on time because without those materials the products can’t be made on time and stores will remain without its merchandise to sell. Productivity also relates to employees that make GE products. When the employees remain dedicated to the company and making these products, the store will remain productive.
Of course GE wants to grow as a company. Even though GE is already a massive company, there is no such thing as a company being too large. The growth that GE is trying to establish, results from competitive prices. It is important for companies to have competitive prices to keep the demand of their products up. Although GE products may be recommended over others, there is still a need for new customers.
Enterprise Organization
Store location is critical to profiting from sales. Even though GE may not own their own stores, placing their products in the right stores is vital. Placing products in the wrong stores can cause major damage by wasting money that went into placing the products in that certain location.
GE is located in 160 countries and growing, making the company international. Of course the company is located in local rural areas, but GE is also national because it isn’t just located a couple times in each country, they are located all over in every country GE is in. Because of the ways that GE is international, it makes it important to be virtual also. Purchasing products online is becoming more common every day. Granted a lot of people may not like to buy big appliances without seeing them first, it is important to have the option out there. If for whatever reason GE has a company that only has one color left at the store, the customer can just order it online. Making Internet sites critical to any company, including GE.
Conclusion:
In conclusion our group learned many new things about GE as a company. They are very determined to lead the way into the future of developing new products and being very profitable. GE has a great Mission in order to live up to their expectations. Being in 160 countries doesn’t happen over night. It takes hard work and an excellent work system. They have developed a system that employee’s work well with that has allowed them to make it to where they are today. GE is an innovator of technology and will not let up its progress as it moves into the future.
Self-Assessments:
Tarah Waldecker,
This project really was very interesting because I got t o look and discover the depths of one certain company. I got to learn the ways of General Electric and how things work in the business world. Ways I would apply the new skills and knowledge I learned in the future business world would just be the ways I researched certain aspects of the company and the information I learned about the internal aspects of the company. This project was slightly time consuming searching for all the information about the company, but in the end the benefits were greater. Our group members all worked well together not only on the report but on the power point presentation as well. After this project, I also have more knowledge and respect for GE as a company.
Tom Salamun,
I found this project to be a compilation of all the previous ones we have done. The information referenced about General Electric was in some ways a review for me and in others a whole new experience on just how this organization is structured. Overall, I enjoyed learning about GE in new ways.
Zack Gillette,
Throughout this project I learned many things about the GE corporation. I learned how to analyze financial information and became more familiar with stock prices and margins. It allowed me to see how important a business system is to helping a company reach their targeted goals. After seeing the progress that GE has made to reach other countries, I now see how important it is for a company to go global if it wants to compete and succeed.
Ian Novel,
This project was a good way to see what the organization of a big company was like. It was also a good opportunity to see what was involved in some of their practices and see what motivated some of the big companies to do good and how they went about it. I think that a lot of big companies don’t clearly state mission goals and their main concerns too often, and to actually see some of them was nice but weird at the same time. I know that the bigger the company, the harder it is to keep track of the small things. It was also good to see the evolution of a giant company like GE. They are a monster of a company and have their hand in everything, and are striving for innovation. They have made some interesting things in the past, and the future wont be much different.
References:
www.informationweek.com/story/showArticle.jhtml?articleID=160500765
www.economist.com/surveys/cfm?Story_ID=949071
The Immelt Revolution, pages 64-73, Business Week,