Risk and Recommendation for Ge Organisational Change

Risk

As we have mention earlier that GE has shifted the strategic focus to organic growth and start to develop technology leadership by invest on new R&D facility and Global research centre.

Furthermore, GE has focused on commercial excellence and started to put the staff from business unit especially acquisition-oriented unit into the marketing roles and appointed Vice president level marketing head to develop the marketing roles. This huge structural change could be a challenge for employees in staff level and management level as they needed to re-conceptualize and expand their scope of work, using sales force as a drive. For this reason, risk arise as employees who have worked for GE for a long time may not familiar with new practice and reluctant to change the way of working, as a result they may decide to resign and company may loss competent employees who might be well-trained staff.

Not only a number of engineers, marketing and sales that GE had recruited during 2001-2003, but GE also recruited external marketing leaders which was not a GE common practice

as it still lacked of marketing professional and needed to accelerate marketing- orient strategy. However external roles can create conflict within the company for example when GE was firstly developing global modular locomotive (GML) in 2005, marketing team members should be responsible for the process of analyzing market opportunities and customer need, however, in practical, it is difficult for marketing members to get involved in process and gain acceptance among existing engineers, product management and sales who may think that external roles may not be helpful and have less direct experience in project.

Furthermore, as GE was aiming to expand the locomotive market to another country for instance in China and Kazakstan. Thus, GE may affected by local economic environments, including inflation, currency volatility, law and regulations that probably be different from U.S and difficult to deal with. Importantly, GE may face high competition in local market. For example, in China, in 2002

Market expansion lead to high cost of locomotive development as GE have to developGE have higher development cost as locomotive engine in chai

 there are a number of laws, regulations and norms that must be met, some of which are far varied from those in the U.S. and which may seem difficult to cope with. Moreover, the requirement in each locomotive market is quite different for example Different size gauges, weight limits Thus, GE need to

Recommendation

we recommend that GE should continue the strategy in organic growth as it will enable GE to sustain the business in the long term. Also, GE had committed to focusing on environmental innovation and come up with 3 options for company focus. After considering in proposed options, we recommend that GE should focus on the second approach to developing existing technology that may assist GE to hold a leading position in locomotive market and also moving forward by holding Hybrid as an IB focus. Although Development cost of Hybrid engine is high however successful hybrid engine will enable GE to compete in transportation industry in the long-term.