This document discusses succession planning at General Electric (GE). It provides background on GE and describes its business structure. It then defines succession planning and explains how GE implements it through processes like identifying potential successors, developing them, and promoting from within. The document presents GE's succession chart from 1892 to the present and analyzes the succession planning under former CEO Jack Welch and current CEO Jeff Immelt. It compares their leadership styles and comments on GE's performance under Immelt's leadership. Finally, it examines the need for succession planning in companies and potential issues without it.

1. GENERAL ELECTRIC, NEW YORK
Case Study : Succession Planning at GE
M.S.Ramaiah Management Institute, Bangalore | MBA (PRIST-A) | HRM Case Study

2. Presented By : Team Members
Christ Biswasi Minz
Debarati Sen Gupta
Denny Singh
Kumar Shubham
Krishna Kumar
Kartikey Yamdagni
Kamal Nayan
Maneet Kumar
Manishankar Sonkushre
Man Mohan Anand
M.S.Ramaiah Management Institute, Bangalore | MBA PRIST(A) 2009-11

3. Succession Planning
 Succession planning is a
process for identifying and Understand
Development
developing internal employees Need
with the potential to fill
critical organizational
positions Identify
Ready For
 It reduces risk Movement
Possible
Successor
 Create a proven leadership
model
 Smooth business continuity
 Improve staff morale
 It encourages “Hiring From
Promote &
Develop &
Within” Train
Compensate
Successor

4. Introduction : General Electric
 Established in 1892, Thomas Alva Edison merged his EELC with
Thomson-Houston Electric Company to form General Electric.
 Business Structure of GE at a glance:
Commercial Health
Energy Transportation Infrastructure
Finance Care
 Forbes ranked GE as the world's largest company. The
company has 323,000 employees around the world.
 In Fortune Magazine's 2005 "Global Most Admired
Companies" list, GE ranked first overall.
 By June,2010 The Ecomagination Revenue of GE will reach
upto $25 Billion

5. Case Study : Succession Chart at GE
Thomas Alva Edition (1892)
Charles Coffin (1894)
Gerard Swope (1922)
Charles Wilson (1940)
Ralph Cordiner (1950)
Fred Borch (1964)
Reginald Jones (1972)
Jack Welch (1981)
Jeff R Immelt (2001)

6. Case Study : Summary
 Succession Planning Process at GE – The leading
diversified business in the world
 Growth of GE from inception and GE’s commitment to
succession planning
 It explains succession planning and leadership
development at GE
 It examine CEO’s succession planning under Jack
Welch (GE’s CEO 1981-2001)
 It shows differences between management style and
ideologies of Immelt and Welch
 Finally, the future of GE under the leadership of
Immelt

7. Case Study : Discussion Session
Q:1(a)
Critically examine the importance of leadership development
and succession planning at GE and explain how it is
undertaken at the company?
A:1(a)
 Adopted Succession Planning from Mid-1900.
 Movement of candidates across all its business
 Focus on “Talent Differentiation”
 Major Tools Used at GE for Differentiating Talent
 Vitality Curves
 9 Blocks
 Accomplishment Analysis

8. Case Study : Discussion Session
Q:1(b)
Why do you think that involvement of the top leadership
in the succession planning process is important?
A:1(b)
Advantages of involving the top management in the
succession Planning:
 Better Assessment Ability
 Employees will be trained under experts
 Personal attention to key candidates
 Build a health relationship between top management and
employees

9. Case Study : Discussion Session
Q:2(a)
Study and comment on the CEO succession planning process
Welch followed.
A:2(a)
 In 1994, Welch created a list of essential qualities,
skills and characteristics an “Ideal CEO” should posses.
 Submitted a list of 23 candidates to GE Board
 Organized informal events to look at potential CEO
candidates
 By 1998, The original list narrowed down to 8 serious
candidates.
 Developed “Eight Basic Objective for Selecting CEO
Successor”.

10. Case Study : Discussion Session
Q:2(a)
Do you think Welch was right in deciding against
retaining final CEO candidate, who failed to make it to
the job? Justify your answer.
A:2(a)
Yes, Welch was right.
 Each candidate are equally enough to run GE
 They could easily become CEOs of any leading company
 Retaining candidates may results into personal as well
as business conflicts
 Work efficiency may reduce after retaining

11. Case Study : Discussion Session
Q:3(a)
Comment on the performance of GE under Immelt’s leadership.
A:3(a)
Immelt’s Performance at GE
 Due to 9/11, GE failed to report double digit earning
growth in the fiscal 2002
 Measures opted by Immelt:
 Cut costs through layoffs
 Restructured GE business
 Introduced a Customer Service program – ACFC
 He focused on “Customer Centric” strategy.
 Invested $100 million in R&D to form “Global Research
Center”

12. Case Study : Discussion Session
Q:3(b)
Compare Welch’s and Immelt’s leadership styles and ideologies.
• Money making machine • Customer centric company
• Focus on Acquisition • Focus on Innovation
• Focus more on Job Rotation • Retain managers to make them
• Focus on Short term demand specialist
• Focus on Long term strategies
• Charismatic • Natural Leader
Jack Welch Jeff.R.Immelt

13. Case Study : Discussion Session
Q:3(c)
Do you think Immelt is right in investing more in R&D and
innovation, rather than on acquisition? Give reason to
support your answer.
A:3(c)
 Yes, He was right because in case of economic slowdown
the company need to make their own growth.
 Growth opportunity through innovation helps in economy
slowdown, rather than acquisitions
 He spent $100 Millions to “Revamp House of Magic”
(Global Research Lab)
 New products/technology always attract customers more
than existing one thus generates more revenue

14. Case Study : Discussion Session
Q:4(a)
Examine the need for Succession Planning in Companies and
identify various problems a company might have to face due
to lack of succession planning system.
A:4(a)
Need for succession planning
 To have a ready pool of deserving candidates to fill the
leadership positions when need arises.
 Opportunities for internal employees increases
 Build a healthy relationship between Top Management &
employees
Problems due to lack of succession planning
 Affect business performance and reputation
 Moral of the company’s staff is affected
 Severance pay, In case external employee is hired

15. Case Study : Discussion Session
Q:4(b)
Many companies appoint CEOs from outside, rather than from
within the company. Do you support this practice? Justify
your answer, citing reasons.
A:4(b)
No, Reasons are explained below:
 Non-Familiarity with OC
 They don’t understand norms and rules of the company
 Increases cost
 Demotivate employees

16. Case Study : Conclusion
 Preparing future leader
 Building-up the performer
 Creating healthy working environment
 Overall cost saving.

17. Case Study : Bibliography
 Websites:
 http://www.google.co.in
 http://www.icmrindia.org/
 http://www.ge.com/in/
 Books
 Human Resource Management – V.S.P Rao

18. Case Study : Succession Planning At GE
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