The General Electric Company (GE) is a multinational American services and technology conglomerate founded in New York City in 1892. Being one of the most diversified corporations in the world, GE’s products include electrical and electronic equipment, aircraft engines, and financial services. The company has been divided into six business structures aligned to grow with present and future market trends which are mentioned below.
- GE Commercial Finance. This is one of GE’s largest growth engines with lending products, growth capital, revolving lines of credit, equipment leasing of every kind, cash flow programs, and asset financing to mention a few.
- GE Healthcare. This division is dedicated to helping company partners in healthcare predict, diagnose, inform and treat and/or manage diseases in the early stages.
- GE Industrial. This division is concerned with automation systems, security and sensing technology, it offers equipment leasing as well as management and operating services.
- GE Infrastructure. GE Infrastructure is known to be the world’s leading provider of essential technologies to developed, developing and emerging nations.
- GE Money. This is a leading provider of banking and credit services to consumers, retailers, auto dealers and mortgage lenders in quite a number of countries around the world.
- NBC Universal. This is one of the world’s leading media and entertainment companies which is concerned with developing, producing and marketing film, television, news, sports and special events.
In the last fifty years, companies have not considered negative environmental issues they might have on the environment. It has been an era characterized by a corporate attitude of denial or obligation, and only recently they have begun to look at the social and environmental challenges as business opportunities (Hart 2003). They do this either by greening their current products and processes or by moving beyond greening to technologies that catapult them into the future. In the process it makes incumbent technology obsolete in a process known as creative destruction (Schumpeter, 1949). During the production processes, by-products, such as wastes, effluence and dangerous gas emissions were the order of the day. These products were a health hazard to the human population along with negative effect on environmental degradation. It should, however, be noted that GE company did not intentionally set out to cause problems in the environment for people to suffer from them. For years GE had been dumping a toxic chemical into the Hudson River before it was declared a violation of environmental protection laws in 1977. The company initiated a series of events aimed at correcting their mistakes by cleaning up the polluted River Hudson. This not only steered them towards a greener future, but also gave them a competitive advantage over their competitors. Consumers were impressed to know that the products and/or services that they purchased did not contribute to the deteriorating environmental quality.
Soon after the incident, the company launched the initiative dubbed ecomagination with the aim of addressing the challenge of environmental degradation. This included exploiting other forms of green or clean technologies, such as solar energy, wind power, efficient gas turbines, lower-emission aircraft engines, hybrid locomotives, fuel cells, and water purification technologies. Ecomagination’s focus is to improve products and technologies in an effort to satisfy existing markets and customers, as well as address new solutions, creating new markets, and reach emerging markets. Environmental policies and regulations set by bodies, such as the Environmental Protection Agency (EPA) played a major role in keeping companies and industries in check. Stiff penalties were imposed for those who failed to comply with the standards.
The EPA and other regulatory bodies were strict with their command and control regulation to such an extent that soon enough a generation of business executives was born that believed in sustainable development. It was not an easy idea to sell to them at first because the prime objective of any business is to maximize profits. Societal and environmental concerns only seemed to eat into their profits, a thorn in the flesh they would have rather avoided. As it became evident that one could not separate financial performance and environmental performance, it later on developed to be a big part of GE’s core activities. It was realized that end of pipe approach was no longer working and the companies needed to take a more proactive stance because end of pipe approach only took care of the problems after degradation had occurred, and probably when it was too late. The approach also proved to be quite expensive. This realization gave birth to greening, a process whereby all decisions are made after careful and thorough considerations of their effects on the environment. By this time pollution had reached alarming levels, so something had to be done to save the environment from further destruction. Consequently, wastes, emissions, and pollution were all significantly reduced, as well as cost and risk. GE is a well established company that deserves the title of Veteran for the many years it has been around.
1892 was the year when the company acquired the assets of Edison General Company and the assets of two other companies. These companies existed in 1878 as Edison Electrical Light Company, and it mainly marketed incandescent lamp among other products. It, however, enjoyed its association with GE through the founders patent as well as through its consultation duties.
It has since then made a name in the current market and is still expected to remain relevant in the near and distant future.
GE purposes to lead the way in fostering sustainable enterprise/development so that the environment does not suffer at the mercy of rapid technological advancements. It represents a distinctive new approach to addressing environmental and societal issues through commercially-inspired growth strategies. Social enterprise is probably the only strategy that puts the environment’s interests first irrespective of the financial implications on the company. It is an independent department of the company that needs to excel in its duties in order to preserve the environment for future use. The Company’s vision is to continuously come up with innovations in the ever changing technological scene. It is a major concern that the company must make sure to not only limit the innovations to existing products, but to apply the same approach to the development of future clean technologies that will surely trigger an era of sustainable form of growth and development.
Among the strategies that GE uses to achieve its goals is creative disruption (Joseph Schumpeter, 1942). The mentioned process refers to mutation of the industry that inevitably revolutionizes the structure of the economy by destroying the old one as it creates a new one.
This was done by making incumbent technology obsolete to pave way for better innovations. It was applied in cases where relentless innovation could not do, leaving creative destruction as the only way out. Under this system, products or technologies that undermined environmental performance at a premium price would not find themselves on any shelf or market. The company came up with a scorecard to evaluate its products and technologies so that only those which outperform both environmentally and economically for the customer and the company qualified to be launched.
GE integrated other strategies into their agenda, namely, disruptive innovation (Clayton Christensen, 2003) into their agenda. This was in a bid to set them further apart from their competitors and grab the opportunity by reaching the four billion people and potential customers in the base of the economic pyramid. This group of people had been historically bypassed, underserved, and underestimated in the process of economic globalization.
Telephone, Semiconductor, Steamship is examples of disruptive innovation because they phased out telegram, vacuum tubes and sailing ships respectively.
The company’s strategies, achievements and progress can be endeavored to rate its performance using the concept of sustainable value portfolio (Hart & Milstein, 2003). This is simply a diagnostic tool used by companies to evaluate whether their strategies foster sustainable value. This approach is concerned with identifying practices which contribute to a more sustainable environment, and at the same time drive up shareholder value. Judging by the magnitude of financial investment that GE has pumped into cleaner technology research, it is safe to say that the company has realized the benefits of the venture, and is keen to take the strategy into the future, or it would not have otherwise devoted a lot of resources to cleaner production technology.
Annual research investment in cleaner technologies was doubled from 700 million dollars in 2004 to 1.5 billion dollars in 2010 (Harts S. L 2011).
Although GE serves its millions of customers in almost all parts of the world, a critical group of people being the base of the economic pyramid have received little attention. The group lacks reliable, affordable and practical solutions related to energy. This is one of the very few shortcomings that General Electric Company seems to have.
In today’s highly competitive and free market, it is important, if not mandatory, that all industry players/stakeholders go out of their way to ensure they remain relevant and not get lost in between technological advancements and changing markets. They can borrow a leaf from successful companies such as General Electric, a company that is still afloat despite the changing technology that remains dynamic over the years. It is clear that proper use and manipulation of the various available strategies could mean the difference between mere existence of a company and sheer success. Critically assessing each and every strategy and making use of the best in accordance with individual company’s needs will surely go a long way in maximizing profits while at the same time minimizing environmental risks.
Companies need not fear that in the quest for sustainable enterprise their profit margins would be reduced. For instance, Google. org has several initiatives running all in a bid to ensure sustainable development. One of them is advocating for renewable energy so as to prevent climate change, another one is the advocating of plug-in vehicles through the Recharge IT initiative (Volans, 2011). Today Google is the world’s most successful search engine with significantly high returns. The main challenge is exercising patience for a while after initiating the strategy just before the market catches up and profits start soaring.
GE Commercial Finance Fact Sheet. General Electrical Company, n.d. Web.
GE Healthcare Fact Sheet. General Elecrical Company, n.d. Web.
GE Infrastructure Fact Sheet. General Electrical Company, n.d. Web.
Hart, Stuart L. 2010, Capitalism at the Cross Roads: Next Generation Business Strategies for Post Crisis. Third Edition ed..: Wharton School.
Hart, Stuart L. & Milstien M. B 2003, “Creating Sustainable Value”, Academy of Management Institute, 17.2. pp. 56-67.
“The Phoenix Economy, Take 2.” Volans the Phoenix Economy Take 2 Comments n.d. Web.