“At GE, the only things that move the culture are ones that show up in our income statement. It’s just the way we were raised. ” -Jeff Immelt Abstract/Introduction The tenure of Jeff Immelt as CEO of General Electric has been nothing short of interesting.
With accusations of unethical practices by his firm (allegations of cooking their books), along with unethical dealings domestically such as his appointment in the Obama administration after being one of its biggest campaign contributors (Int. Ref.#4), and internationally dealing with countries like Iran and Syria by the company (Int. Ref. #2), one cannot overlook GE’s current culture that has been established by Immelt and draw reasonable conclusions.
Here we will look at the CEO and the culture he has put forth though the company since his appointment in 2001. Major Issues The culture set by Immelt is apparent by the introductory quote that is presented. By saying this, he has let it known to not just outsiders, but his workforce that the firm’s main focus is the “bottom line”.
This can, and has in a way led to a dysfunctional culture for GE as reflected in certain cases of fraudulent allegations of activities by his employee to reach certain goals. An argument can be made for and “adaptive” culture in a sense that the business environment has changed in a dramatic way since Immelt has taken over only because of the way the company has had to position itself in regards to those changes. But as far as the overall culture has gone and cases that have arose during Immelt’s tenure, a dysfunctional culture is a more appropriate assessment at the moment.
Accusations of unethical practices have surfaced about GE that is proof of a dysfunctional culture that it has under Immelt. Unlike his predecessor, Immelt’s focus is more towards the marketing aspect of business as where, Jack Welch, former CEO or GE focused more on production which reflected his leadership by trying to build up the employee which in turned build up the company. Welch also liked to promote with in whereas Immelt has brought in outsiders from the company (Ref. #1).
In regards to the cultural ramifications of GE as it pertains to the culture set forth by its CEO can be seen by GE’s business dealing with countries like Iran and Syria (Ref#2). By doing deals with countries like this, it’s an obvious statement that this company, under Immelt, will do anything it takes to not only generate business, but walk the “shady” line in order to get a buck. The ramifications are apparent with the bad PR such dealing have taken. Along with GE’s share prices being at a price lower than in the past, it is also apparent that stuff like that is having consequences on its overall business as well.
Problem Analysis For the most part, the current culture of GE with Immelt at the helm seems to have both advantages and disadvantages to it. Most of these depend on what side of the line in regards to GE you are on. If you are a current employee (whose job isn’t shipped overseas) and customer of GE that has benefited from the company’s profits, government contracts, and shady dealing which give the company revenues and business then those are advantages to you.
The disadvantage, the biggest one since we are on the topic, is unethical behavior. Yes, in cultures like this you can get results, good ones for that matter, but how they are getting them leads to, and if ever proven guilty, big problems either in public relations or legal that top managers must decide that the risk is worth the payout. It is hard to say whether the culture is appropriate or not in regards to the current business environment GE faces.
If they did not have a “by any means necessary” approach to business, would that leave GE, one of America’s most important company’s in a position where it is a detrimental to the US economy? That can be seen as an extreme, for now the answer is no, a dysfunctional culture like this is not appropriate for GE and it can only lead to more problems in the future. Under Jeff Immelt’s leadership, GE seems to be in the quadrant of a Mission Culture in the organizational quadrant grid (Daft p 383). The overall goal for Immelt’s GE is the bottom line.
He has stated this many times to where GE’s recent bad publicity show the company is in action to achieve these goals for the firm. In regards to a firm’s culture as it relates to the environment has an impact on both the internal and external factors. The internal factors are put in a position of adaptation. Whether it is by employee or customers, when dealing with a company you deal with not only the output of the company but the culture. If a customer does not have to adapt to a new culture set forth by a company they can leave it and pursue new relationships.
In the case of GE, recent situations have made it to where petitions of a boycott on products and services have been issued due to its recent culture under Immelt. Conclusions/Interventions The job of the CEO, especially for big, important companies (more so in the United States) have become extremely important and more difficult as social media has exploded. As far as if someone like myself was put in the situation of CEO, one would have to approach it in an emphasis on value based leadership (Daft p 394).
Of the four types of organizational culture, the ideal approach would be to combine all four and really emphasis the use of all four (mission, adaptability, clan, and bureaucratic) in one overall practice (Daft p 383). This would allow the company to focus more employee leadership throughout the company and employee empowerment. By fusing all four cultures together, it will allow the company to focus in more on the overall mission while leaving flexibility for change. A sense of order must also be emphasized where a chain of command is in place, but is also very open to all employees.
This approach as a CEO will lead a culture of not only a better work environment, but put the firm in a position to succeed in the present and future. References Internet Ref. #1- http://curtisaron. hubpages. com/hub/Jack-Welch-and-Jeffrey-Immelt-Continuity-and-Change-in-Strategy-Style-and-Culture-at-GE Internet Ref. #2- http://www. foxnews. com/story/0,2933,351332,00. html Internet Ref. #3- http://abcnews. go. com/blogs/politics/2011/03/moveon-calls-on-immelt-to-resign-wh-post/ Internet Ref. #4 –