Management Theories in General Electric

Question: Discuss about the Management Theories in General Electric. Answer: Introduction: Strategic management is the formulation of organizational goals and objectives based on the internal and external resources and competitive environment in order to achieve better performance (Hill, Jones, Schiling, 2014). General Electric Company is a diversified global digital industrial, infrastructure and services company. It has eleven main operating units: GE Aviation, GE Capital, GE Digital, GE Energy Connections, GE Healthcare, GE Lighting, GE Oil Gas, GE Power, GE Renewable Energy, GE transportation and GE Current. It is one of the Fortune 500 companies and operates worldwide. They help in building the cities that move smoothly and cure the world by providing integrated health care (GE Businesses, 2016). They aim to connect the world by providing safer and faster machineries. They bring electricity for the countries they operate in and are optimistic and engaged in renewable energy sector. They serve the needs of all its stakeholders(GE Businesses, 2016). Industry attractiveness is the potential of market growth and the high magnitude of profit in an industrial sector without much effort. The attractiveness of an industry is analyzed based on the future prospect of the industry rather than existing condition(Adam, Syahputra, Gunawan, 2015). The most common factors are industry structure, size of industry, variability of demand, price levels, industry profitability, macro environmental factors (PESTEL), labor market conditions, global opportunities, industry rivalry, intensity of competition, existing opportunities and threats, seasonality and the risk level (Adam, Syahputra, Gunawan, 2015). The potential of market growth for General Electric Company, the diversified industrial giant, is huge. It has adopted digital technology to stay ahead of competitors. The company calls itself a digital industrial company and expects the revenue of the business from this sector to double in coming few years(GE Businesses, 2016). The strength of the company is that it has global recognition for meeting customer needs, offering quality products and attracting big corporations government agencies. It has diversifies activities ranging from technology, aviation, insurance and other financial services, home appliances, energy and power industry. It has invested in cleaner technologies and embraced green economy as an initiative towards social and environmental responsibility. The intense focus on research and development ensures a competitive edge for the company. It has been quite successful in addressing the favorable and unfavorable factors of both the internal environment and the exte rnal environment (Brand Building, 2016). The size of the company is huge and it is growing continuously and rapidly. It offers a number of products, which are in constant demand, and seasonality does not affect them. However, the company faces threats from its competitors and has other environmental risk, but the planned strategy to tackle these risks keeps the functioning of the company smooth. The brand name and the concern for employees make the General Electrical an employer of choice and thus beating the labor market competition(GE Advantage, 2016). The resource-based view of strategic management is concerned with internal resources, which are rare, and valuable, capabilities and core competencies of the organization that contribute in sustained competitive advantage (Barney, 2012). Resources are the main determinants of the performance of the company and help the companies to achieve the strategic organizational goals (Olavarrieta, 2015). All the tangible and intangible assets, attributes, knowledge and information that the firm holds to implement its strategies successfully form part of the organizational resources. GE has Global Learning program that contributes in development of decisive thinking and business knowledge. It has decentralized organizational structure, which assists in cross- departmental activities(Brand Building, 2016). The huge investment in infrastructure sets it apart from the competitors in terms of lower cost and improved quality. Various leadership programs are designed to train the fresh graduates and others. These are in accordance with the growing demand for the skills and competencies. The company has financial capacity to invest in huge projects. These capabilities of General Electric Company are the source of core competencies of the company. It has a motivational and innovative culture, which is called imagination at work (GE Businesses, 2016). This differentiates GE from its competitors. The GE Global Learning program contributes in development of decisive thinking and business knowledge. It is a cost leader in most of the areas of operation as well product differ entiator creating unique products to meet the needs of the clients. It achieves cost leadership through various modern technologies. The companys innovative culture drives the production of unique client specific and customized products. It offers financial advice and financial assistance to support the hassle free functioning of corporations(GE Businesses, 2016). Competitive advantage is the property and a favorable circumstance that puts a company is a superior position as compared to its competitors. It is the strength of a company against its rivals(Sahay, 2013). The competitive strength is measured by the market share of the company, growth rate against the rivals, the brand name and reputation, loyalty of the customers, profitability against the competitors, value chain, cost leadership, product differentiation, and technological innovation (Sahay, 2013). General Electronics has implemented a new leadership style to attain competitive advantage. The structure of the company is in line with the companys strategies. The company has developed an orientation to focus on innovation in technology, business excellence, customer satisfaction, leadership and market segmentation (GE Businesses, 2016). It has domain expertise in most of the areas of operation that puts it in a superior position. It has a balanced business model and revenue stream, which gives it a competitive edge (GE Advantage, 2016). It has alliance with many government agencies and big corporate houses that help build the reputation of the company. The company is financially strong and has strong workforce. The companys reputation, brand name, profit level and market share are the key factors for the competitive advantage of the company(Brand Building, 2016). To improve strategic management, General Electric Company the company must reduce reliance on the GE capital and explore other financial solutions(GE Businesses, 2016). The company must invest in less explored renewable energy sector. There is vast scope in this industry as it makes up a negligible share of total energy sector. It must pursue energy markets and control internal competition. It should also increase its investment in technology, healthcare and carbon trading. It must develop a distinct value proposition and forego some of its services in which it is incompetent(GE Advantage, 2016). Bibliography Adam, M., Syahputra, H., Gunawan, B. (2015). Industry Attractiveness and Knowledge Management . Barney, J. (2012). Purchasing, supply chain management and sustained compoetitive advantage: The relevance of resourse-based theory. Journal of Supply Chain Management, 48(2), 3-6. Brand Building. (2016). Retrieved from GE Brand: https://www.gebrand.com/ GE Advantage. (2016). Retrieved from GE Advantage: https://www.ge.com/b2b/advantage GE Businesses. (2016). Retrieved from GE/ The Digital Industrial Company/ Imagination at Work: www.ge.com Hill, C. W., Jones, G. R., Schiling, M. A. (2014). Strategic management theory: an integrated approach. Cengage Learning. Olavarrieta, S. (2015). Market attractiveness, resource based and evolutionary approaches to strategy: a comparison. Springer International Publising. Sahay, A. (2013). A Customer Oriented Approach to Identifying Competitive Advantage. Ahmedabad: Indian Institute of Management Ahmedabad, Research and Publication Department.