GE’s Talent Machine : The Making of a CEO
Founded in 1878 by Thomas Edison, General Electric is nowadays a leading business in electrical generation, distribution and use in America and in the world. The company has been experimenting successful business models since its creation, and its human resources policy has been considered for a century one of the most sophisticated. It consists in a strong focus on human potential through executive development to the top ranks of the firm: this performance based meritocracy has made GE a “CEO factory” for the company and for all corporate America. In 2001, Jeff Immelt, the company’s new leader was faced with the problem of how to keep this talent machine humming.
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In the last half of the 20th century, four CEOS made GE’s HR management one of the most successful in the world. Confronted to a strong diversification (due to World War II), Ralph J. Cordiner (1950-1963) implemented a thorough decentralization of the business decisions, created the first corporate management university and heightened GE’s dialogue with its executives (self-evaluation, performance evaluation, career forecasts, succession plans…). His successor, Fred J. Borch (1963-1972) intensively diversified GE and accompanied the operation with the creation of the Executive Manpower Staff to centralize the high potentials of the company. Reginald H. Jones (1972-1981) first reduced the role of HR in strategic planning but ended up aggregating business groups according to the sector, thus facilitating again the succession plans. John F. Welch, Jr. (1981-2001) restructured GE and based the HR policy on the company’s performance through executive rankings and stock options. He heav...
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... cruelty of GE’s HR policy is out-of-date.
The Human Relations movement (circa 1929-1951) proved the importance of job-oriented interpersonal skills for compatible relationships between the employees, those in management positions and the customer, and applying mechanical evaluation systems to a global human network may be, in a way, fair (because it fills the gaps between divisions with different working methods), but it is not attractive anymore. GE would be able to become one of the best working places in the world again if it displayed some incentives to creativity and personal development (outside of the company). It is not rewarding anymore for a high potential executive to work at GE, an ageing, highly polluting firm which focuses solely on performance: it is the company itself that has to rethink its image and its commitment to the happiness of its workers.
“People always overestimate how complex business is. This isn’t rocket science. We’ve chosen one of the world’s most simple professions.” In Jack Welch’s words, business is simple. A leader needs to supply his employees with the information, the resources, the vision, and the atmosphere to succeed and reward them when they do. Welch does not concern himself with the details of GE’s many business units; he only needs to ma...
In a competitive economic environment, human resource management has taken more of a strategic, hands-on role in many companies to handle the challenges they face to stay competitive. Companies must find ways to bring in customers and keep good, well-motivated employees on the job. With this in mind, companies that are successful must have sound HRM practices and provide a positive workplace for employees. Looking at the Top 10 Companies to work for, we want to know if HRM practices have an effect on that company being one of the best places to work. We will look at REI, number 9 in the top ten companies to work, to see if Strategic Human Resource Management plays a role in their success.
General Electric Corporation is a multi-billion dollar conglomerate founded in 1892. The company was founded in Schenectady, New York to capitalize on the patents of Thomas Edison and the use of electric power through generation and distribution. Now a blue chip publicly traded company that has branched out beyond its core into arenas such as aircraft engineering, television, and home appliances to name a few. Over the years the corporation has been through different management models that have brought innovation in many forms that have allowed them to be envied by companies around the world. Despite great success since its conception, like many companies who can withstand the test of times, it’s natural for them to become self-absorbed, which can have a negative impact on the company structure as a whole. Coming across someone like Jack Welch who can think out of the box and in a manner that doesn’t strain the resources of the company but expands the thinking of the company as a collective unit is needed to continue the legacy of innovation in all aspects of business.
In order to become more technology and marketing driven, one of Immelt’s goal was to encourage employees to be more risk taking. Grant (1996) refers routine as interface pattern between individuals to build specific knowledge and transfer it to the organization. GE changed its previous routines and slowed down the job rotation. GE recruited external marketing leaders that demanded more employment budget. Multi-disciplinary divisions were created as GE aimed to be more customer-oriented, resulting in increase of training budget.
GE discovered a humongous gap within the management structure and established a plan to fill the break. The three levels of management implemented with GE is to ensure proper the training and information flow between corp...
HRM in any company is a weighty issue that needs much attention where business performance is linked to a HR strategy (Caldwell 2008; Ulrich et al. 2008). In the recent past, competition has become stiff, such that organizations need to come up with other means to compete in the extremely dynamic market world. Thus, companies have shifted their emphasis to Strategic Human Resource Management (SHRM) where they enhance and empower their personnel in order to increase the productivity and the services offered into the market (Mello 2006). This goes against the traditional ways of increasing the means of competition where organizations place emphasis on tangible resources. In the past, organizations competed in terms of machinery and acquisitions. This has changed greatly due to the changing customer tastes and the diversity of the market in the present (Delery & Doty 1996; Lengnick-Hall et al. 2009).
...ible if Lincoln Electric stopped prioritizing its employees. By making sure to look out for its employees’’ well-being, the company can stay aggressive and stable without stagnation or lawsuits. Ultimately, the company sounds like it blends traditional management elements with an above-average attention to employee morale, training, and well-being. For a place that’s nearly two hundred years old, with thousands of satisfied employees, this is an impressive track record. Other companies should look at the management style present at Lincoln Electric for proof that companies can make profits and still put their employees above stakeholders.
This paper will highlight the history of the company, followed by HR policies & practices that stand out and implications of HR policies when comparing to other companies. The paper will also explain why the HR policies and practices chosen are important.
" This global London-based mining and mineral company was severely impacted by the global recession in 2008. Such an impact forced unprecedented workforce reductions worldwide and decentralized HR management had to be brought in under a single umbrella to ensure an orderly and efficient system that would support the organization’s future productivity."( Case Study OneRedesigning HR HRMG 5000 - Student Simple). Human resources have a strategic significance if managed efficiently and productively. The company revamped and managed its HR functions in a manner so as to achieve the strategic goals of the
The General Electric Company (GE) is organized with its chief executive officer, shareowner, and board of directors on the top of the pyramid, followed by their executive leaders and corporate staff. GE’s Board of Directors ensures the company serves the interests of shareowners and other key stakeholders with the highest standards of integrity and compliance. Serving equally as tough critics and wise counselors, they provide in-depth oversight of the major strategic issues of the company (General Electric Company, 2012). The authority officially vested in the board of directors is assigned to a chief executive officer (CEO), who occupies the top of the organizational pyramid (Bateman & Snell, 2011). There chai...
This paper will attempt to give a broad overview from the available literature within three areas. First, the paper will explore the historical relationships of HR and organizational strategy. Second, the paper will give an overview of current practices and trends. Lastly,...
It seems that HRM is so crucial to the organization, for what it does has nearly covered all aspects of the business – from strategic planning to the training and development, but unfortunately, its importance has not been accepted by everyone. As proposed by Morton, C, Newall, A. & Sparkes, J. (2001) there are three different views of HR function within the...
The third stage in HRM development which began in the late 1970?s and early 1980?s was the realisation that effective HRM could give an organisation competitive advantage. Within this stage HRM is viewed as important for both strategy formulation and implementation. For example 3M?s noted scientists enable the company to pursue a differentiation strategy based on innovative products. At the competitive stage, then, human resources are considered explicitly in conjunction with
4) Tokesky, George C; Kornides, Joanne : ‘Strategic HR Management is vital’( Personal journal, December 1994 v 73 n 12 p 115.
Changing Roles. Traditionally, HR has been an administrative position-processing paperwork, benefits, hiring and firing, and compensation. However, recently HRM has moved from a traditional to a strategic role, the emphasis is on catering to the needs of consumers and workers. Before, HR was seen as the enemy and employees believed that HR’s main purpose was to protect management. Now, the position requires HRM to be more people oriented and protect their human capitol, the staff. In addition, human resource management has to be business savvy and think of themselves as strategic partners in the 21st century.