Changes in GE Organizational Structure (1981-2016)

1. General Electric
Organizational Restructuring

2. • Flexible organization
• Creativity stage
Late 19th
Century: The
Edison Era
Early 20th
Century
• Diverse but centred on the
electrification program
• Virtual absence of competition
• Highly centralized corporate
firm
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion
Post-war Growth
and Difficulties
• In 1960s and 1970s GE grew in all fields
• Too large for its existing structures to accommodate
• Classified into one of three categories--growth,
stability, or no-growth--to facilitate divestment of
unprofitable units
• 1981, a period of radical change
• Return the control of the company to
the periphery
1981-2001: The
Jack Welch Era

3. GE's Restructuring
• The first wave:
• "#1 or #2" objective
• "three circle concept“
• Core
• High-technology
• Services
• The second wave
• Cultural change | Globalization |
Leadership development |
• The third wave
• Leadership development
WHY Boundaryless?
• Perfect for rapid innovation
• Jack Welch in 1980s
• Banish the barriers and restructure
• Restructuring plan
• Massive job cuts
• Dismantled the 29 layers of hierarchy
and make GE an informal
organization
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion

4. Boundaryless Behaviour
• Integrated diversity
• Open, anti-parochial environment
• Friendly
• Remove all barriers
• Erase group labels such as "salaried",
"management" or "hourly"
PROS
• employees,
managers,
customers and
suppliers can work
together, share
ideas and identify
the best course for
the organization.
CONS
• structure clarifies
the roles for each
member of an
organization
and dictates the
amount of
control each
member possesses.
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion

5. • 50 years of globalization just after World War-II
• Innovation happened in USA, and then the new
offerings were distributed everywhere
• Achieved incredible economies of scale
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion

6. • Focused on winning market share
by adapting global offerings to meet
local needs
• However Innovation still existed
only in USA
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion

7. 9/11 terrorist attacks on the United States cost
GE's insurance business $600 million — and had
a direct effect on the company's Aircraft Engines
sector.
Global economic slowdown of 2001
Post- Enron wave of cynicism over
corporate financial reporting
Digitization wave (.com)
Sarbanes Oxley Act of 2002
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion

8. • “In-country, for country.”
• Production is shifted to Local Countries
Local Innovation
• “In-country, for country”
• Production is shifted to local countries
Reverse Innovation
• The innovations originally chartered
for poor countries were scaled and
adapted for worldwide use
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion

9. Decentralization of Structure
• To localize the business
• GE (India) needs to be innovative and cost
effective
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion
Transportation
Aviation
Power

10. 2012
Analytics Era
for 20 years
World power
usage to
increase by
50%
1st step
towards
digitization
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion
• Platform open
to customers
• Helped for
adaption to
digital space
• Integration
with energy
sector

11. Asset Performance Management (APM)
• Analytics to decrease plant production cost and downtime
Operations Optimization (OO)
• Plant performance and fleet productivity
• Emission reduction using software
Business Optimization (BO)
• Flight data analytics
• Event Measurement System
Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion

12. Introduction
Boundaryless
Organization
Globalization Glocalization PESTEL Localization Diversification Digitization Conclusion