Managing GEs
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What problems do you think GE's most senior executives encounter in trying to stay on top of all the businesses GE is in, and how do you think they decide the merits of expanding or divesting in a business like this?
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Solution Summary
The following posting discusses problems that senior executives at GE encounter when trying to stay on top of the various businesses they are involved in.
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These executives need to take numerous factors into account. Most multinational companies (MNCs) with various portfolios need to consider the profit-maximizing objective first and foremost with respect to the funds generated from holding any one business. Profits need to be considered in the short-term and in the long-term, especially with the impact that these profits (or losses) will make in the market perception. Since GE is a public company, it has to deal with shareholders and its stock price on a regular basis. Company profits in its ventures aid to create the market perception that the company is doing well, which, in turn helps the company maintain or increase its stock price.
In GE's case, in particular, executives have to consider its history, stakeholder action against the company's executive pay scheme with CEO Jeff Immelt, and Immelt's actions reflecting GE's sole dependence on certain businesses to obtain their profits. Although Immelt's leadership of GE went through the 2008 financial crisis, the MNC severely suffered, having its ...
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