With the realization that formidable analysis of the organization is necessary in order to provide a clear understanding of the attributes that contribute to success, this investigation considers the development of such an analytic framework for understanding the overall success of the organization. In particular, this research examines the organizational behavior of General Electric and how this behavior has contributed to its overwhelming success in recent years.
Through a careful consideration of the current trends that are taking place in the context of organizational behavior, it should be possible to provide a more integral understanding of how these trends have impacted the General Electric organization at its methods for expansion and development. Further, by examining what has been written about the success of the organization a clear overview of the dynamic interplay between the development of the organization and its internal behavior will be elucidated. Current Trends in Organizational Behavior.
In order to begin this investigation, a consideration of what is meant by organizational behavior must first be elucidated. Martin (2004) in his definition of organizational behavior argues that the term “organizational behavior” refers directly to the behavior that takes place in the organization. Martin maintains that the specific behavior that occurs in this context is directly related to the culture that has been created by the organization. Organizational culture has explicated by Martin, is the shared values and attitudes that are expressed within the organization.
Through the process of development the organization establishes a culture that affects the manner in which individuals in the organization act. Hence, the process of organizational behavior is a direct response to the culture that has been established. In order to maintain the status quo in the culture of the organization, specific behaviors are utilized to achieve this end. With the basic context of organizational behavior defined, Furnham (2004) is able to expand understanding by examining the manner in which the organization impacts the life of the individual.
According to this author, the organization is a principle source for human interaction. As such, researchers examining the issue of organizational behavior have been highly interested in how the specific culture created by the organization can impact the overall behavior of the individual. In this context, the specific issue of how the organization influences behavior of its employees becomes an issue of paramount concern. Organizations that are able to influence individual behavior toward the objectives of the company are able to maximize the utility of human capital.
Organizations that can effectively achieve this goal waste considerable time and money. With this in mind, it is evident that how organizations achieve these ends is essential to understanding this process. When examining the specific methods that organizations use to effectively control the behavior of their employees, it would seem feasible to argue that organizations that are successful toward achieving their strategic goals have taken positive steps to achieve this end. By the same token, one could also argue that organizations that have not achieved their goals utilize negative paradigms that impact employee behavior.
Even though this argument makes logical sense, researchers examining the success of the organization in the framework of organization behavior note that this is not always the case. For instance, Sugarman (2001) argues that coercion can be used by leaders in the organization to ensure the compliance of individual employees. Although coercion can be an effective means for motivating employees toward achieving a specific strategic goal, it is clear that this process is one that does not create positive interaction between the organization and its employees.
However, this example illustrates the point that positive means do not have to be used to achieve positive ends. In this case, negative means are used to achieve positive ends. Given that there the behavior in the organization can be motivated by a wide range of variables, researchers have spent more time attempting to identify the key variables that are used as a means for organizations to drive behavior. Through this process, investigators have identified specific variables such as adequate pay, benefits and incentive plans as important to employee motivation.
However, researchers looking beyond the peripheral issues for employee motivation have found that the establishment of an internal culture that enables the employee to grow and develop, also has a positive impact on organizational behavior (Meyer, Becker & Vandenberghe, 2004). What this effectively suggests is that the specific culture that is created by the organization will invariably have a notable impact on how the employee responds and the behavior that is used collectively in the organization. General Electric-An Overview
Given the importance of understanding culture with respect to the development of organizational behavior, it is clear that culture is a salient starting point for examining the organizational behavior of a particular company. With this in mind, this analysis of General Electric (GE) begins with an examination of the organization’s culture. By documenting what has been written about the unique culture that has been established in the General Electric organization, it should be possible to provide a formidable framework for analyzing the overall behavior of the organization.
As such, the organizational culture developed at General Electric will be used as the basis for the further analysis of organizational behavior. Examining first the history and development of General Electric, it becomes evident that the organization has undergone notable changes in the last 25 years. When Jack Welch took over as CEO of the organization in 1980, General Electric had become a paragon of inefficiency. In order to improve the organization, Welch engaged in a program of delayering middle management so as to reduce the number of individuals in the organization that served no real role for moving the organization forward.
After streamlining the organization, Welch put a number of new strategically oriented projects into place that called for individual accountability from each and every employee in the organization. Welch’s goal each year that he lead the organization remained the same: ” (Gunther, 2004, p. 176). Welch argued that for any one enterprise in the GE organization to remain in business it had to prove that it could be either number 1 or number 2 in its market. If employees in each branch of the organization could not deliver this performance, Welch argued
that these branches needed to be shut down. The organizational culture created at General Electric under the guidance of Jack Welsh is one that focused heavily on the establishment of benchmarks to ensure the profitability of the organization. Welch was so focused on the bottom line of the organization that he was able to create a culture in which all employees focused on this issue as well. Paradigms such as Six Sigma were instituted as a means to ensure that every practice used by the organization was as efficient.
Even though this process had notable ramifications for improving the overall financial health of the organization, it did breed considerable competition among individual employees in the organization. Each year, Welsh established goals for managers in each departments, those that were capable of reaching or exceeding these goals were given bonuses for their accomplishments; those that could not reach Welch’s goals were fired from the organization. Researchers examining Welch’s stance on employment in the organization notes that Welch adopted the following policy:
Twenty percent of your people are your best. You reward them, you want them to get rich, you want them to have a great job and you want them to have fun. The middle 70 percent, you reward them but you tell them all the time where they stand and then the bottom 10 percent you ask to move on. You don’t waste time with them (Welch on… , 2005, p. 7). Benchmarking and evaluation in the organization each year produced a new crop of “10 percent. ” Individuals in this lower percentile were asked to leave the organization.
Examined in this framework, it is not surprising to understand why such fierce competition typically developed in the organization. Welsh led by pitting each of his employees against each other. In doing so, Welch was able to increase the profitability of General Electric enormously. “In a 2-year career at General Electric, Jack Welch is credited with increasing the company’s market value from $12 billion in 1981 to $280 billion in 2001” (p. 7). Thus, even though the specific tactics used by Welch to motivate
employees in the organization have been criticized as harsh by some critics, the end result has been a dramatic increase in the overall efficiency and profitability of the organization. Through the culture created by Jack Welch, employees in the organization were motivated by the opportunity to become one of Jack Welch’s most important employees and share in the spoils of attaining this position. Unfortunately, the specific context of this culture is noted to have had detrimental impacts on specific groups and individuals in the organization.
Exploring the specific issues of behavior that developed under the tenure of Jack Welsh, Gunther (2004) reports that even though the organization had reached a high level of profitability, in an effort to retain the position of the organization, many employees in the organization became involved with unscrupulous activities. Gunther notes that General Electric under Jack Welch was not know for having a high level of corporate responsibility. Under Welch, GE has been cited for dumping toxic chemicals (PCBs) into the Hudson River.
In addition, General Electric had embarked on a project to establish a host of business ventures in Iran. These projects were eventually stopped under the organization’s new CEO, Jeffrey Immelt. When it comes to the issue of corporate social responsibility, Immelt examines the organization from the inside out, noting that if the company is to be successful in the long-term it must project a positive image that establishes a firm’s reputation as an ethical organization.
While Jack Welch did not support the use of illegal activities as a means to move the organization forward, it is important to note that the specific culture created by Welch is one in which employees felt that they had to employ these means in order to make themselves and the organization successful. After Jack Welch stepped down as CEO in 2001 and Jeffrey Immelt took over, Immelt was quick to see the problems that had been created as a result of the culture that had been established under Welch.
Even though Immelt recognizes the importance of establishing strong internal controls for the development of the organization-such as what is accomplished under Six Sigma-Immelt also realizes that a competitive corporate culture in which individuals are rewarded only for success, rather than the quality of success, is one that does not promote corporate social responsibility (Brady, 2005). In addition, Immelt is concerned that the use of bottom-line techniques to drive the development of the organization is a process that is suffocating the innovation needed to move the organization forward (Brady, 2005).
In short, General Electric has created a culture so focused on the financial outcome of every decision that mangers and employees in the organization are afraid to develop innovative methods that may eventually fail. In this context, it becomes evident that what has been left in the wake of Jack Welch’s organizational culture is a team of highly skilled employees that are unable to use their skills and talent to improve the organization. When placed in this context, it becomes clear that this is a situation in which the positive success of the organization may have been influenced by the use of negative methods to achieve this end.
While it is evident that Jack Welch did not utilize a culture of coercion to achieve his ends, he did effectively polarize the organization, making each member an enemy of the other. Even though this process served as the impetus for the financial development of the organization, Immelt’s analysis of General Electric definitively demonstrates that the culture that was created under Welch’s tenure has had a negative impact on the development of the organization. Hence, although it has been possible for General Electric to be successful in the past 20 years, one cannot help but wonder what the future holds for the organization.
The Future of General Electric Considering what Jeff Immelt has noted about the lack of innovation of the General Electric organization, it seems feasible to argue that his concerns may indeed be warranted. Researchers examining the success of modern organizations note that as specific elements of technology and corporate infrastructure become uniform, the ability of the organization to develop innovative strategies will be one of the few sources of competitive advantage that will remain for the organization.
Kontoghiorghes, Awbre and Feurig (2005) argue that many of the specific tools that organizations have used to garner a competitive advantage in the past are now available to all organizations. For instance, many organizations have long utilized information technology (IT) to increase their competitive edge. However, at the present time, IT has become more of a necessity for the operation of the modern organization. For this reason most organizations now utilize this technology, making it the rule rather than the exception.
What this research effectively suggests is that the modern organization is on the cusp of another revolution. As the competitive tools of the past become defunct for creating a competitive edge, organizations, and more importantly employees in the organization, must be able to take the tools that they have at their disposal and use them in innovate ways to improve the overall function of the organization. Clearly, what this implies is that innovation of employees in the organization will have considerable ramifications for the success of the organization in the new millennium.
While this is not to say that increasing quality and productivity are not important issues for the organization, what is does effectively suggest is that the organization can no longer rely simply on these issues as a means to ensure the overall success of the organization. For Jeffrey Immelt, the realization that innovation is a critical element for the development of the organization is one that brings with it both hope and despair.
Even though Immelt has effectively recognized the need for innovation with respect to moving the organization forward, the culture that has been created in the context of the organization creates a clear dichotomy for allowing this process to occur. Thus, Immelt is faced with the reality of having a productive, well trained workforce that is effectively unable to think outside of the box. Even though General Electric may be able to remain profitable by keeping to the same course established by Jack Welsh, over the long-term, Immelt has come to realize that this method of organizational behavior simply will not do.
The most pressing issue that remains is how Immelt will change the culture of the organization to improve innovation and the overall development of the organization. Conclusion Arguably, the culture established by Jack Welsh in his 20 year tenure at General Electric creates a clear paradox for the organization. Even though employees in the organization have learned to operate under strict policies and protocols that ensure the efficiency of the organization, this process has served as the impetus to quell any amount of innovation that might exist in the organization.
At the present time, employees in the General Electric organization are not interested in accomplishing new goals; rather they are interested in accomplishing set goals that will enable them to propel the organization and themselves forward. Using this as staring point for the development of culture at General Electric, it becomes evident that Immelt must develop new methods of evaluation that will enable employees in the organization to match their abilities to reach goals with the development of novel methods for innovation in the organization.
Unfortunately, for Immelt there are no specific established protocols for achieving this end. This makes Immelt’s job much more difficult; however, it also gives Immelt the opportunity to lead the organization in a new direction. If the specific behaviors used in the organization are to change, Immelt must create a new culture. Under the Welch culture, it is evident that employees valued financial gains, success and rewards. Under Immelt’s new culture, employees must come to value the benefits of innovation and discovery.
In addition, Immelt must establish the importance of creating a culture that is unique from other organizations working the same industry. Clearly, this is a substantial challenge because it requires Immelt to fundamentally alter the culture and behavior of the organization. In doing so, Immelt has no means to quantify the results that will be garnered. As such, Immelt must take a winning corporate culture and transform it so that it can remain a winning culture, with the realization that this process could have negative ramifications for the overall financial health of the organization.
The ability of leaders to understand the environments in which their organizations operate is essential for the success of the organization. In this case, Immelt recognizes the specific changes that need to occur in the organization. His challenge is not envisioning the future; rather his challenge lies with making the change a reality. Immelt must develop his workforce such that they are capable of developing the innovation needed by the organization for success.
With the realization that the culture of the organization can have such a notable impact on the development of organizational behavior, the case of General Electric clearly elucidates the dynamic interplay that occurs between the culture established by leaders in the organization and the resultant behaviors of employees. If Immelt is able to find the right culture to develop employees, it is possible that he can restructure the organization once again and move it toward a successful financial future. References Brady, D.
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