Management Style of Jeffrey Immelt

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Table of Contents

Introduction
Management Style Employed by the CEO
Problems with the Management Style
Memo
Reference List

Introduction

An examination of GE’S current goals reveals that it plans to become a market leader in biotechnology, renewable energy, technological services and transportation and as such plans to do so by leveraging on its ability to basically be able to do things faster, more efficiently as well as more cost effectively than any other company.

The inherent problem though with this particular strategy is that in its pursuit for cost effectiveness one must wonder whether GE has taken the concept too far and as such has neglected to include Corporate Social Responsibility as a necessary aspect into its business dealings.

It is based on this that this paper will examine the management style of Jeffrey Immelt, current CEO of GE, and elaborate on what areas of improvement he should focus on in order to help create a better working environment for this employees.

Management Style Employed by the CEO

Immelt’s management style can be considered paternalistic in the sense that his decision making process focuses on what would be best for the organization as a whole through processes which emphasize heavily on efficiency, performance, and what operational methods would cost less for the company in the long run.

This can be seen in GE’s strong management discipline regarding not only its stringent implementation of cost saving measures but in its ability to streamline operations in order to squeeze every single bit of productivity out of its employees (Cummings & Tanenbaum, 2005).

This, I believe, is the core of GE’s success as a corporation since it enables the company to operate at peak capacity while ensuring that costs are scaled back in favor of efficiency over wastefulness. Such a strategy is evident throughout numerous instances of Immelt’s tenure as CEO of GE as seen in his initiatives which involved centralizing the diverse operational departments into distinct groups so as to reduce administrative costs as well as his emphasis on the use of lean Six Sigma practices in order to reduce operational wastefulness (Olson, van Bever, & Verry, 2008).

For Immelt integration of departments and the institution of cost saving measures were just the beginning of the changes that he wanted to implement, of particular interest is his move to divest GE of companies that were either underperforming or no longer considered “vital” in terms of the vision that Immelt had for the company (Paul, 2007).

In this regard Immelt did the right thing for GE in continuing to divest GE of aspects of its operation which not only lost the company money but were “ancient” in terms of their ability to continue adapt to the present day environment of constant change and innovation.

Another move which I consider a strength of the Immelt initiative was his focus on acquiring companies which for him could be integrated into GE’s current repertoire of services which would thus become, in his words, “growth engines” for the company.

Problems with the Management Style

When examining the case Immelt’s management style of GE at the present one, of the most notable weaknesses is its current push in outsourcing various aspects of the company’s production services to China with its 100 year old X-ray division being the first of what could potentially be a large shift in overseas manufacturing with more than 25% of GE’s product output being produced in China instead of the U.S. within the next 5 years.

With Immelt being one of President Obama’s current economic advisors this move by GE to outsource its production facilities would no doubt cause general discontent since the man responsible for helping to increase the job rate within the U.S. (which is one of Obama’s current goals) is in effect facilitating job outsourcing in order to reduce costs for the company.

Further compounding this issue is the fact that GE received a $14.3 billion tax exemption within the previous year in order to encourage job growth yet strangely enough the company is outsourcing jobs which is the complete opposite of what it should be doing.

Memo

Date: July 1, 2012

To: Jeffery Immelt, CEO of General Electric

Subject: Lack of Corporate Social Responsibility in Management Style

It is undeniable that GE as of late has become a more efficient and profitable company under your tenure as CEO. Profits are up, efficiency is at its peak and wasteful processes and spending has been minimized to a considerable degree. Yet, despite such progress, a distinct lack of focus on Corporate Social Responsibility has been noted with regard to GE’s plan to outsource several aspects of its operations to China despite the fact that it has received a $14.3 billion tax exemption.

A company is not only defined by its ability to turn a profit, rather, it is also necessary to take into consideration what possible positive impact can a company have on the local community.

You have neglected to take the following into consideration:

The impact of outsourcing thousands of jobs to China and how this will adversely affect the local economy.
The ethical dubiousness of outsourcing when your company has received billions of dollars in tax exemptions which was meant to help generate jobs.

As such, it is recommended that you fulfill your obligation to American tax payers and generate the jobs that your tax exemption was supposed to ensure. It is only by doing so that GE can be considered a company that adheres to proper Corporate Social Responsibility.

Reference List

Cummings, J., & Tanenbaum, E. (2005). Why the sandwich structure problem needs innovative solutions. International Tax Review, 16(10), 76.

Olson, M. S., van Bever, D., & Verry, S. (2008). When Growth Stalls. (cover story). Harvard Business Review, 86(3), 50-61.

Paul, D. L. (2007). Board Composition and Corrective Action: Evidence from Corporate Responses to Bad Acquisition Bids. Journal Of Financial & Quantitative Analysis, 42(3), 759-783.

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