Immelt: Reinventing General Electric
Case Study: Immelt and the reinventing of General Electric
Posted on July 29, 2011by Bruno Mognayie
This case study was part of a strategy assignment taken at the SDA Bocconi School of Management.
I’d like to thank my fellows Gouri Wagle, Felipe dell’Oro, Andrea Masina, Paolo Cerchiario, Ashna Suri-Sasmal and myself for the insights that contributed to put through this work.
The issue: In September 2009, Ge’s Board of Directors reappointed Jeff Immelt as CEO. My team was asked to prepare a memo providing guidance on the following four qustions:
1. The key features of Immelt’s strategy for GE, in compariso to that of his predecessor, Jack Welch.
While Jack Welch was mainly focused on short-term objectives, his successor, Jeff Immelt was more concerned about the long-term strategy.
Welch’s leadership was characterized by risky projects that led to technological revolutions, aggressive cost cutting schemes and accurate performance measurements. On the other hand, Immelt emphasized organic growth, technological innovations and exploiting emerging opportunities.
2. To what extent has Immelt’s strategy been aligned (a) with developments in the external business environment since 2001 and (b) GE’s resources and capabilities?
Jack Immelt’s strategy was very much aligned with the external business development and its key resources and capabilities.
External business events that occurred during the period 2001-9 included: the destruction of the Twin Towers, Enron’s collapse, the Tyco International Scandal and the 2008-9 financial crisis which brought to light an increased awareness in corporate governance issues. The investment community believed GE hasn’t been transparent with the sources of their profits and subsequently short GE’s shares. GE was then downgraded from AAA to AA+.
GE’s response was two fold with the aim of restoring investor confidence and maximizing their value. Firstly, GE improved communication with investors through more detailed financial
Posted on July 29, 2011by Bruno Mognayie
This case study was part of a strategy assignment taken at the SDA Bocconi School of Management.
I’d like to thank my fellows Gouri Wagle, Felipe dell’Oro, Andrea Masina, Paolo Cerchiario, Ashna Suri-Sasmal and myself for the insights that contributed to put through this work.
The issue: In September 2009, Ge’s Board of Directors reappointed Jeff Immelt as CEO. My team was asked to prepare a memo providing guidance on the following four qustions:
1. The key features of Immelt’s strategy for GE, in compariso to that of his predecessor, Jack Welch.
While Jack Welch was mainly focused on short-term objectives, his successor, Jeff Immelt was more concerned about the long-term strategy.
Welch’s leadership was characterized by risky projects that led to technological revolutions, aggressive cost cutting schemes and accurate performance measurements. On the other hand, Immelt emphasized organic growth, technological innovations and exploiting emerging opportunities.
2. To what extent has Immelt’s strategy been aligned (a) with developments in the external business environment since 2001 and (b) GE’s resources and capabilities?
Jack Immelt’s strategy was very much aligned with the external business development and its key resources and capabilities.
External business events that occurred during the period 2001-9 included: the destruction of the Twin Towers, Enron’s collapse, the Tyco International Scandal and the 2008-9 financial crisis which brought to light an increased awareness in corporate governance issues. The investment community believed GE hasn’t been transparent with the sources of their profits and subsequently short GE’s shares. GE was then downgraded from AAA to AA+.
GE’s response was two fold with the aim of restoring investor confidence and maximizing their value. Firstly, GE improved communication with investors through more detailed financial