MBA522 Unit 7 Case Study

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Anissa Corrales Park University MBA522: Organizational Behavior and Leadership Gregory Moore February 23rd, 2024

Case Study 15.1: Organizational Change and Structure at General Electric (GE) The workforce at GE is committed, diversified, and operates with the utmost integrity and attention in order to achieve GE's goals and satisfy their clients. The board and GE's leadership group are dedicated to this approach. GE has participated in continuing GE declared in 2011 that it will shift its emphasis from finance to the manufacturing sectors. After selling off most of its banking and financial activities, the company made significant investments back into its main industries, which include energy, healthcare, and aviation. Lewin's Basic Change model comprises three aspects, of which General Electric is familiar with the one in the intermediate transformation. When managers acknowledge that change is necessary, they can start the challenging process of putting it into practice, which includes making sure that workers are on board with the change, among other crucial tasks. GE has been much worse than these times and has developed the ability to adapt over the 21st century. Name two transformations that GE has undergone since the turn of the century GE has experienced multiple changes since the year 2000 to accommodate shifting market dynamics and financial constraints. One significant change happened in 2011 when GE declared its plan to shift its emphasis from financial institutions to businesses in the industrial sector. This move was motivated by the desire to reduce the company's exposure to volatile financial markets and to concentrate on its core competencies in manufacturing and industrial engineering. The continued restructuring will lead to even better operating performance at GE's other industrial segments. The division will lessen GE's diversity (Juan, 2021). In order to adapt to this shift, GE made significant investments in its core industrial sectors, including energy, healthcare, and aviation, and sold off the majority of its banking and finance businesses. This modification helped the company perform better in its primary businesses and lessen its

dependency on the banking sector. In 2018, GE undertook a significant restructuring under the direction of Larry Culp, the company's new CEO, marking yet another significant change. The organization dropped its dividend and consolidated its business units, reducing the number of divisions from 18 to 6, in order to concentrate on lowering debt and increasing cash flow. This shift was necessary since the business was having severe financial problems and needed to get back to its core competencies to be competitive. Due to its size and diversification, GE has significant financial and operational flexibility, which helps them compete with major international industrial competitors. What is an external force? Describe one which GE had to react to. A factor outside of an organization's control that affects how it operates is known as an external force. External influences can be highly unpredictable and unmanageable, which can cause significant issues for the organization. One external force that GE had to react to was the financial crisis of 2008. GE's overall performance declined as a result of the crisis, which caused the company's banking and financial industries to suffer enormous losses. A decline in the company's overall performance was caused by the enormous losses GE's finance and banking businesses, which at the time made up a significant portion of its operations, suffered as a result of the crisis. G.E. as a company scrambled to shed many of its troubled financial assets, its overextended power-generation business became a drag on the operation (Lohr, 2021). Since the crisis was outside GE's control and required the company to respond and adjust, GE has generally suffered a number of external factors. In addition, the crisis brought attention to the dangers of owning a diverse business portfolio and forced GE to concentrate more on its core industrial operations.

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Why is GE an open case? Since GE is continually evolving and dealing with problems, the case is still open. The corporation is still dealing with serious debt and performance problems in spite of its transformation efforts. Since the turn of the century, GE has experienced a great deal of reorganization and a shift in focus from financial to industrial companies. The COVID-19 pandemic has had a substantial influence on the company's financial performance and operations, as seen by its ongoing struggles with significant debt and poor profitability. Considering the continuous changes and difficulties that GE has encountered lately, the case is still open. The company's future course will be decided by its capacity to manage debt and performance issues, adjust to shifting market conditions, and keep investing in and innovating in its core businesses. Because of this, GE's transformation journey is currently ongoing and dynamic, rendering it an open case. GE will need to constantly innovate and invent new, exciting products in order to maintain or increase there market shares in the industries that it operates within. For the CEO of GE he emphasizes,“It all starts the unique ability to innovate new technology the world needs to address the most pressing sustainability challenges. By sharpening our focus on the specific missions of each business, we gain more opportunity” (CULP, 2024). It is safe to say that GE is unlikely to go anywhere anytime soon and there continued efforts to expand will likely lead to a solid revenue stream and investor confidence. GE narrowed its focus to prioritize industrial and technology-related operations while refocusing on its core business. Restructuring its business units to coincide with this core emphasis was made possible by GE's significant transformations and victory against external influences.

References Neck, C. P., Houghton, J. D., & Murray, E. L. (2020). Organizational behavior: A skill-building approach. SAGE. CULP, JR., L. (2024). A transformative era of action . General Electric. https://www.ge.com/sustainability Lohr, S., & Merced, M. J. D. L. (2021a, November 9). G.E. breaks up with its storied past . The New York Times. https://www.nytimes.com/2021/11/09/business/general-electric-break- up.html Juan, J. (2021). Fitch Affirms GE and GE Capital at “BBB” on Plan to Separate Business Units; Outlook Stable . Fitch Ratings: Credit Ratings & Analysis for Financial Markets. https://www.fitchratings.com/research/non-bank-financial-institutions/fitch-affirms-ge-ge- capital-at-bbb-on-plan-to-separate-business-units-outlook-stable-09-11-2021

MBA522 Unit 7 Case Study

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