The American Multinational Company named General Electric is headquartered in Boston and founded in 1892. It provides reliability, safety, and efficiency to the world by producing aircraft engines, electrical, and electronic types of equipment. The organizational structure of an organization represents the interconnection between the employees and the departments.
General Electric Organizational Structure
General Electric Company (GE) follows a multidivisional, formal, and flat organizational structure that divides the employees according to the geographic and product areas. This organizational structure transforms the business into a leading digital industry.
The hierarchical organizational structure of GE keeps the Board Of Directors, Share Holders, and the Corporate Executive Officers at the topmost position. The CEO and the Chairman lie at the second level, while the Presidents lie at the level below them. This organizational structure concentrates on the improvements in the products through research and development. These structural features determine the business capabilities to some extent.
General Electric Company Organization
At the top position lies the twelfth CEO and the eleventh Chairman of GE, H. Lawrence Culp, Jr.
Personnel working directly under him are:
- Jérôme Pécresse, President & CEO, GE Renewable Energy. It is the widely used renewable energy industry within GE.
- Steve Winoker communicates the values and vision of the transformation related to GE. He is the Vice President of Investor Relations there.
- Nancy Anderson is responsible for ensuring the successful operation of the GE digital technology infrastructure globally. She is the Vice President and the Chief Information Officer (CIO) in GE.
- Linda Boff, the Vice President of GE, is responsible for global marketing, sponsorships, and more. She is also the Chief Marketing and Communications Officer and the Learning and Culture President in GE.
- The Chief Diversity Officer (CDO) Of GE, Mike Barber, is in charge of the inclusion and diversity strategy.
- Chris Pereira is the Vice President and the Chief Risk Officer (CRO) of GE that governs and oversees the risk management.
- The Chief Financial officer (CFO) and Vice President of GE, Carolina Dybeck Happe, is in charge of the overall financial activities.
- The transformation of medical technologies comes under the President and CEO of Healthcare, Kieran Murphy. Scott L. Strazik is the CEO of the power division of GE. He is responsible for providing technologies and services to gas power producers.
- The Chief HR Officer, Kevin Cox, leads the HR department globally.
- Vic Abate is the Chief Technology Officer (CFO), is in charge of product management and technical research. He is also the Senior Vice President.
- The CEO of GE’s digital department, Patrick Byrne, leads the technical strategy.
- The Chief Sustainability Officer, Roger Martella, leads the concept of sustainability.
- Ricardo Procacci allows the use of additive printing technology by global manufacturers. He is the CEO of GE Additive and the Vice President.
- GE is led across the international markets by the Senior Vice President, Vice President, and CEO of International Markets, Nabil Habayeb.
- John Godsman enhances the partnership development programs. He is the Head of Business Development.
- The responsibility of maintaining ethics and environmental health and safety is with Mike Holston, the Senior Vice President, Secretary, and GC.
- The responsibility of cash flow and treasury lies with the Senior Vice President, Treasurer, and CEO of GE Capital, Jennifer Vanbelle.
- John S. Slattery is the President and CEO of a leader in the Aviation industry.
- Russell Stokes has experience of more than seven years in GE Aviation and is the CEO of the division. He is also the President of GE.
A multidivisional structure requires a marketing team in all of its divisions. But, the GE organization chart represents how it solves the problem. Some of the divisions get centralized here. It has clubbed the operations into the six departments named finance, human resources, public relations, global, and legal. So, the top management can focus on a specific department or geographic division.
Characteristics Of General Electric Organizational Structure
The management concentrates on supporting different dependent operations from various industries. Every industry in GE has a set of officers. Thus, it becomes easier to introduce industry-specific changes. The characteristics of the organizational structure help GE grow, lead, and achieve success.
The following are the characteristics of the GE company:
Corporate Teams Across The Company
The distribution of the corporate teams across the organization acts as the secondary source of influencing the business strategies. These teams keep different industries separate yet dependent. However, it is not enough because the primary source to affect the business strategy is the business-type division in the case of GE. The energy and lighting industries influence a wider part of the organization, but not every. These industries mainly focus on their allocated industries.
Business-Type Divisions
The organization divides its industries into business-type divisions to mention the different businesses of the organization. It shows how the organization attempts to stay in line with the market conditions. It helps the organization have better research and development, be known for different products, and have a powerful name. The company must make changes in the existing industries or add new ones according to the changing technology.
It is specifically known for the oil and gas, capital, renewable energy, transportation, healthcare, and power management divisions. The energy division proves to be the most profitable one, but no division is larger than the capital division.
Geographical Divisions
Distribution of the industries according to the geographical divisions affects the inventory management, location-specific business strategy, analysis and reporting of the business data, and supply chain management. As the name suggests, different geographic locations get considered in this characteristic. Renewable Energy and Power Management divisions both use the same geographical divisions for record-keeping. However, this characteristic stands third after the Business-Type Divisions and the Corporate Teams across the organization. GE operates in over 130 countries across Africa, America, Europe, the Middle East, Asia, and Australia.
Changes In The Strategic Management Process Of GE
It was a journey from changing the efficient and far-reaching centralized functional organization structure to a decentralized divisional organizational structure while accepting the improvements. It got centralized before 1953, but Ralph J. Cordiner changed it into decentralized management during his serving period. Fred Borch introduced the divisions within the company, and Jack Welch focused on the business optimization portfolio. After Jeffrey R. Immelt came into position, he made changes in business portfolio management and concentrated on specialization management.
The global research of the organization focused on the short-term goals earlier. Now, it focuses on the long-term goals. The company initially had a commercial perspective, but Jeff Immelt tried to focus on the marketplace. The position of the Chief Marketing officer seemed to vanish with time. Still, that position got filled by Beth Comstock. The company had to recruit top-level managers from outside due to a lack of internal talent. It was not a common practice in GE.
Reasons For Changing Any Organizational Structure
Changing the organizational structure is not an easy or short process. The most common reasons include the signs of danger such as slow decision-making or poor organizational performance. The organizations might become too complex and must be simplified. The executives are responsible for making changes in the organizational structure. They must choose one or more from the four structures matrix, multidivisional, functional, and simple. This selection affects the organization for a long time.
Advantages
The following are the advantages of the organizational structure followed by the company to grow, increase its capabilities, and withstand the trends in the market:
- Since the industries are interdependent yet separated and well-defined, the company can focus on particular divisions for making changes. It lowers the burden for the company by eliminating the unnecessary aspects while concentrating on an industry. The Aviation Industry and the Healthcare industry can both work together for the army personnel. Still, they can have separate approaches.
- The corporate divisions that can work throughout the company ensure coherence and help different teams to develop and implement collaborative strategies.
- It uses a flat and hierarchical system that makes it cheap with fast decision-making and clearly defined work authorities.
- Communication can get done with ease, and the subordinates can share their ideas with the seniors. Due to the multidivisional architecture, most decisions need the involvement of only particular divisions, and the customer service can get improved.
Disadvantages
The following are the disadvantages of the GE Organizational Structure:
- GE’s organizational structure needs some improvements to work on the limits, help the business grow, and compete with the competitors. The company has various industries that introduced strategic errors.
- The company has sold off most of its shares. Now, it is not the same leader as it was a long ago.
- It becomes hard to develop some of the industries together. These divisions must transfer and share the technology. For example, the Power and the Renewable Energy divisions cannot get executed together with ease. The in-charges of the related divisions must come together and develop strategies for collaborating with the divisions.
- The flat structure creates limits for the structure and confusion among roles. The multidivisional structure is costlier than the functional structures.
- Since the divisions are can take decisions quickly, it becomes difficult if their decisions do not fit into the business strategy.
Conclusion
GE has turned into a process-oriented company from a result-oriented company. This company improves its organizational abilities through learning, and it makes it an organic organization. The leaders in the company must make the decisions related to the authorities and responsibilities while creating or changing the organizational structure. The culture in GE is quite strong. The CEO got succeeded in removing the barriers within the company and between the company and the outsiders to a certain extent. But, the flavor can get enhanced more.
Frequently Asked Questions
- What Is The Culture Of The General Electric Company?
Answer:
GE focuses on diversity and leadership to bring up productivity and innovation. The diversity in this organization shows how strong the company has laid the foundations for the upcoming leaders to take the inclusiveness ahead. The company brings the cultures, individuals, and ideas together for the betterment of the company and the world.
- What Is GE-McKinsey?
Answer:
It is a framework that analyzes the business status and helps the company by providing strategic ideas to decide where and how much to invest.