Tone, Mission, and Vision of GE
GE is an international company that is considered as one of the most prominent conglomerates in the world. Today, its activities span a vast range of areas from healthcare equipment, aircraft engine manufacturing NBC Television Network and even appliances (General Electric, 2018). One of the leaders who helped this company to drive its strategic mission is Jeffrey R. Immelt. Jeff served as the 9th chairman of General Electric and further became the CEO for the same company for 16 years, before retiring in 2017 (Bloomberg, 2018). During his tenure as the CEO, he revamped the firm’s strategy, international footprint, culture, and workforce, positioning the company for the future. The main objective of this assignment is to analyze the leadership philosophy of GE, its tone, mission and vision, leadership skills demonstrated by Jeff during his tenure, ethical leadership and a self-reflection on leadership qualities.
Tone, Mission, and Vision of GE.
A mission statement should mirror a firm’s core values and vision. Epstein & Buhovac (2014), explains that these statements guide investors, employees, customers, and vendors on what the enterprise believes in. Furthermore, managers, rely on the vision to formulate a direction for leadership. The mission and vision statements of General Electric are designed to enable it to gain a positive industrial progress. The corporate vision of GE is “to become the world’s premier digital industrial company, transforming the industry with software-defined machines and solutions that are connected, responsive and predictive” (General Electric, 2018, p. 3). Besides the vision statement, the firm states that its products are for executing beneficial results for its clients (General Electric, 2018). This vision statement has three primary components- to emerge as the world’s premier digital industrial firm, to execute critical results for its customers and to transform the market with connected, responsive, predictive and software connected machines.
The first component indicates that GE aims to become a premier digital industrial firm. To fulfill this, and uphold its competitive status, the firm has continued to grow and stay ahead of the market rivals. For instance, it has continued to integrate advanced computing technologies especially in its aviation and healthcare products (General Electric, 2018). The second component defines what GE aspires to do in relation to its products and solutions. For example, it aims at providing software-defined solutions and machines to improve the industry. On the other hand, the last component defines what the Company provides to its clients. Ideally, GE aims to provide its customers with high-quality products to enable them to enjoy the best outcomes.
The corporate mission of GE is “to invent the next industrial era, to build, move, power and cure the world.” (General Electric, 2018, p. 3). The Company aims to necessitate tremendous revolutions in different industries like electric lighting, transportation and power to become more competitive. This mission is congruent to the Company’s strategic approaches and activities. For example, the company currently deals in products and software solutions from different industrial sectors (General Electric, 2018). The Mission statement of General electric consists of two elements as discussed in the following paragraph:
The first component explains what is specifically done by the firm as its primary business function, which involves inventing the next industrial period. To achieve this, the business has majored in consistently introducing new and technologically advanced products and solutions that support market progress (General Electric, 2018). This objective dictates GE’s business and operational approaches. Another component of GE’s mission statement explains what the firm aspires to do to invent the next industrial period. For instance, in its attempt to discover the next industrial era, the firm aims at instituting operations that power, build, move and cure the world. This aspect helps in defining the kind of products contained in the company’s marketing mix. It also demonstrates that the company deals in different product categories such as energy, aerospace and transportation oil and gas and healthcare among other categories. The mission and vision statements of the company are closely linked considering that to become a premier digital industrial company, the firm needs to discover the next industrial period and formulate unique operational strategies.
Philosophy & Skills of Leadership
Leadership theories can be grouped under philosophy as they deal with beliefs, values, knowledge, and concepts, primarily in the ways that leaders should handle others such as coworkers and followers. For instance, for autocratic leaders, the only value they place on their workers is that the workers can get something completed for them (Antonakis & House, 2013). Conversely, servant leaders tend to place more values on their workers as they are dedicated to serving them (McCleskey, 2014). The leadership philosophy of GE as spearheaded by Jeff stated that “when a person grows, we all grow, and together we all rise. We believe every General Electric employee is a leader. Every employee, therefore, has a hand in this accomplishment, and should feel a deep sense of pride.” (Bloomberg, 2018, p. 4). This philosophy is based on Honesty, Trust, Integrity, and Accountability. As discussed in the following paragraphs:
Integrity: This is the practice of being whole and undivided by operating honestly and demonstrating high moral standards. GE identifies integrity as a global reputation for reliable and honest business conduct General Electric, 2018). It has a mechanism for reporting any unauthorized behaviors that go against the company’s expectation like corruption and illegal dealings. Furthermore, the employees are given protection against victimization in case they report such cases.
Accountability: Accountability refers to a situation whereby every individual is held responsible for every action they take. At GE, all employees have choices. However, they are held accountable for those choices General Electric, 2018). Therefore, accepting accountability is one of the leadership philosophies of this firm. Ideally, the company encourages its employees to accept accountability for their individual and group actions. This helps to detect and correct irresponsible behaviors in the firm.
Trust: GE’s success is largely dependent on its ability to win and retain the trust of its clients, co-workers, communities, regulators, and investors. To win this trust, the company majors in practicing honesty, compliance, and integrity in its day-to-day jobs (General Electric, 2018). This means that the company has to make the right decisions and take the right actions every time.
Honesty: Honesty means constantly standing for the truth. The company’s leadership philosophy is based on honesty General Electric, 2018). It tries to be as transparent as possible with its investor’s customers and other stakeholders. This also enables it to win their trust.
During his tenure as the CEO, Jeff tried to promote trust, integrity, honesty, and accountability at GE by demonstrating accurate leadership skills. Some skills demonstrated by Jeff as a servant leader entail inspirational motivation, creativity, idealized influence and intellectual stimulation:
Creativity.
Sometimes leaders have to make a number of decisions involving matters that do not have clear answers. In such cases, leaders have to think outside the box. However, an appropriate way to promote creativity in the organization is to promote research and development (Taylor, Pearse & Louw, 2013). After assuming his position as the CEO of GE, Jeff was committed to providing support for new ideas and change. Therefore, he spearheaded heavy investments in R&D and development of initiatives which aimed at supporting new ideas and change initiatives within the firm such as innovation, growth, and leadership (The Economist, 2014). He also developed the “Imagination Breakthrough” initiative which aimed at encouraging creativity and risk-taking among the employees.
Intellectual stimulation
Intellectual stimulation entails having a leader who focuses on creativity, innovation, problem-solving and critical thinking. It relates to arousing employees’ imagination and thoughts as well as stimulating their ability to creatively identify and solve problems (Clinton, 2017). Jeffrey was constantly searching for creative ideas to be adopted by the company. He aimed at banishing the belief that products that were not invented by the company were not relevant. He believed that there were a lot of smarter workers with great ideas that were not employed by GE and encouraged the workers to search for inventive ideas from both inside and outside the organization (The Economist, 2014). In line with this, he invited outside speakers to constantly address GE leaders on operational and strategic issues. Furthermore, Jeffrey listed imagination as one of the core values of the company to encourage his employees to think outside the box and formulate new ideas to improve the operations of the company.
Inspirational motivation
Inspirational motivation is one of the key skills that should be held by a transformational leader. Through inspirational motivation, leaders are able to challenge assumptions held by their followers and solicit ideas from them without criticizing them (Baesu & Bejinaru, 2014). This helps in changing the way the employees think about and perceive problems and obstacles. Jeffrey believed in four basic pillars of leadership- Imagine, solve, build and lead. He used these pillars to push the employees to be proactive, decisive and passionate in everything they did (Bloomberg, 2018). Besides, he encouraged the employees to be better listeners, freely share their ideas and learn from their mistakes. By giving his employees clear instructions concerning what he wanted from them, he acted as an inspirational motivator as the clarity of his messages helped the employees to understand the attractive goals of GE.
Influence
Effective leaders should have skills to influence their employees to handle different tasks. Basically, idealized influence is a scenario which enables leaders to act as role models to their followers, by displaying charismatic personalities (Moriano, Molero, Topa & Mangin, 2014). This trait is usually depicted by a leader’s willingness to take a risk and follow a defined set of convictions, ethical principles and core values in the action he/she takes (Herrmann & Felfe, 2014). During his tenure as the CEO of GE, Jeffrey obtained a positive media image as an effective leader. Furthermore, he gave many interviews and numerous articles written about or by him. The greatest indicator of his high influence was shown when he became the direct advisor of President Obama in 2010 as the head and chairman of the “Council on Job and Competitiveness.” Therefore, throughout his leadership, Jeffrey acted as a role model to his followers by always remaining on the top.
Why Jeff was “Retired” and replaced by John Flannery
Despite his good leadership skills, in June 2017, Jeff was “retired” by the board of directors and John Flannery promoted to take his place as the CEO (The Economist, 2014). His retirement came amid criticisms and challenges related to disruption and activist investors. A major challenge that led to decrease in GE’s profitability and stock prices is activist investors. During Jeff’s tenure, GE’s stock market value depreciated by about a half. By 2017, GE was the worst-performing stock listed on the Dow Jones Coverage. A primary reason given for this decrease is that GE’s stock was undervalued since the investors did not believe Jeffrey and the management of GE would do the things required to deliver higher dividends and stock prices.
John Flannery’s leadership style
GE has maintained its leadership philosophy even with the change of its CEO. The company still majors on honesty, accountability, integrity, and trust throughout its operations. However, in leading GE, Flannery has adopted a more transformational approach. For example, upon taking his seat, the CEO pledged to unload $ 20 billion of general Electrics’ business in the next two years and protect the company from activist investors (The Economist, 2014). He has majored on creativity as a major leadership skill. Besides John believes that innovation activities without a specific innovation pipeline results into innovation theatre and that an innovation pipeline should be driven with urgency and speed and results evaluated on the basis of the impact on top and bottom lines.
Ethics in Relation to GE.
Ethics can simply be defined as the right code of behavior expected of organizations. Some basic ethical concepts include integrity, honesty, equality, respect, and justice (Bacha & Walker, 2013). Compliance with the ethical requirements demands that an organization respect and follow the principles outlined in these ethical concepts. Despite its good financial performance, General Electric has been faced by some of the unethical practices, some of them relating to disrespect for human rights (Reagan, 2015). In this assignment, three ethical scandals have been discussed:
In 1995, GE’ experiments involving nuclear radiation were uncovered with the development of the US’ PAC (Presidential Advisory Commission). Starting from 1949, the Company knowingly release radioactive materials to determine how far they would move downwind. Although the action was done only for experimental purposes, the whole process can be viewed as unethical because the company disregarded the lives of the citizens which were put at stake by the effects of radioactive emissions.
One of the most gruesome experiments conducted by GE that was shunned by humanitarians and confirmed by the Markey proceedings was an experiment conducted on prisoners in a prison located in Walla Walla (AHRP, 2014). In 1963, 64 male prisoners had their testes and scrotums inflicted with radioactive elements to examine the impacts of radiation on the reproductive organs (AHRP, 2014). Despite that the prisoners were given a prior warning concerning the possibility that they could experience radiation burns and sterility, the company did not inform them that they risked contacting the cancer of the testicles. Markey’s committee determined that GE violated both criminal and civil laws during the experiment. This scandal showed disrespect to humanity as the prisoners were exposed to the risk of contracting testicular cancer, pain due to radiation burns and sterility.
Another major scandal that is worth discussing pertains to a financial fraud. Honestly, GE has always been depicted as a blue-chip international conglomerate. However, in 2009, the Securities Exchange Commission, which is the US primary market regulator fined GE 50 million US dollars for fraud (The New York Times, 2009). The company was accused of manipulating its earnings in a number of ways, one being revenue recognition from the sale of aircraft and locomotive spare parts before effecting the actual sale (The New York Times, 2009). This was against the accounting principle which states that revenue should only be recognized when earned (Sekerka, Comer & Godwin, 2014). Another way involved an astonishing accounting irregularity in managing interest rate swaps volatility. GE would first determine the effects of classifying an interest rate swap as a hedge or not before making any classification. It would then classify the interest rate swap as a hedge only if doing so would have the least effect on earnings. This is an illegal practice. A prominent consideration concerning this scandal is that the practice only went on for four years, but made the company spend close to 200 million USD in legal fees. Furthermore, the impact of reversing the false profits also amounted to 200 million USD.
From the above scandal, the investors were being deceived as to the financial status of the firm. This was a breach of honesty and integrity which are some principle ethical concepts (Ferrell, 2016). Although GE pleaded guilty to the allegations and paid the fine, this is something that could be prevented by the CEO through exercising responsibility and fostering honesty and integrity in the organization. Failure to prevent this scandal from happening can be classified as one of Jeff’s failures in leadership, which resulted in the erosion of GE’s reputation among different investors and other stakeholders.
How ethics guides GE’s Activities in Relation to the above challenges.
Although GE has faced several ethical challenges, it has tried to formulate different ethical concepts to guide its operations and further deter reoccurrence of any unethical practices. GE infuses governance and compliance in every aspect of its operations (General Electric, 2018). It is committed to maintaining a world-class culture of compliance in each of its operations and operational areas. The company’s compliance and integrity program concentrate on detection, prevention, and response.
To prevent fraud and other unethical practices, the company has created an open and effective reporting environment in which the workers are encouraged to raise any integrity issues and do so openly without fear of retaliation. Besides, as explained by The Economist (2014), GE has made efforts to simplify the program by making integrity policies more understandable by the employees. Also to detect fraud, the company has created a Compliance Executive Dashboard that brings together compliance data for the firm’s business units. Last, the firm has continued to establish itself in the global market (The Economist, 2014). It has also realized that standardization of processes is important in responding to compliance in places with similar risk-mitigating controls. For instance, in 2016, GE centralized the monitoring process of business courtesies which was necessitated by the establishment of a standard policy, process, and tool.
Personal Reflection
Jeffrey was able to demonstrate a true transformational servant leadership in GE because of the special qualities he had. Studying the leadership philosophy and skills portrayed by Jeff has prompted me to question my personal leadership qualities. I have, therefore, conducted a personal leadership style test using a leadership legacy tool formulated by Robert M Galford and Regina Fazio Maruca which consists of 30 leadership questions (Appendix I).
The test ranked my leadership qualities based on six possible leadership traits- ambassador, people mover, advocate, truth-seeker, experienced guide and creative builder. As an ambassador, I scored 25 out of the possible 25 points, showing that I have the ability to handle various situations with grace. An ambassador is a person who is able to handle difficult and unpleasing situations in a humble, persistent and respectful way without criticizing the followers (Mabey, 2013). Perhaps this quality is also in congruence with Jeff’s inspirational motivation. An inspirational motivator is also able to encourage employees to work through discouraging situations to achieve specific goals.
I scored 24 out of 25 points as an advocate. An advocate usually acts as the spokesperson for a group through being articulate, logical, rational and persuasive (Men & Stacks, 2013). For an advocate, experiencing pitfalls and challenges is part of the reason they revel in their tasks. Therefore, scoring 24 in this criterion shows that I am able to passionately walk through pitfalls in the organization and lead the employees to solve complex problems. An advocate is usually creative and able to use both nonlinear and linear approaches in arguing out points (Mabey, 2013). This is, in fact, congruent to creativity as a skill demonstrated by Jeff. Besides, I scored 25 out of 25 points as a people mover. A people mover is usually a motivator, a career builder and a think tank of the organization. Therefore, scoring highly on this aspect shows that I am able to introduce new ideas, new paths and new ways of doing things in the organization and motivate the employees to handle new and challenging tasks in the firm, a quality also held by Jeff.
As explained by Galford (2011), a truth-seekers in an organization usually act to preserve the integrity and strive to determine the root-cause issues or pivotal issues prevailing in a firm. Obtaining 23 points in this aspect shows that I am able to practice fairness and good judgment in leadership. Also, a truth-seeker is usually competent in his/her field unquestionably. On the other hand, Creative Builders act as visionaries and entrepreneurs in a firm (Morin, 2015). I scored 24 out of 25 points on this aspect showing that when I rise to a leadership position, I will be able to constantly search for new ideas and encourage creativity and innovation just like Jeff did by looking for ideas from outside the firm.
An effective leader should also be an experienced guide. An experienced guide is a person with an ability to listen to others and put themselves in their colleagues’ shoes (Galford, 2011). Scoring 25 out of the possible 25 points in this aspect depicts that I am a natural therapist who is able to help the employees think beyond their problems and execute the organizational tasks. In future, when I rise into a leadership position, I will be able to guide and encourage the employees to handle different tasks. Furthermore, experienced guides usually act as role models in the organizations and have idealized influence over their employees.
Conclusion
In a nutshell, since discovering the next industrial and market age is a precondition of becoming a prominent digital firm, GE’s vision and mission statements are strongly linked to each other. Jeffrey upheld an organizational leadership philosophy which stressed on peoples personal developments. He demonstrated some transformational leadership skills like idealized influence, inspirational motivation, creativity and intellectual stimulation. Besides, GE has tried to promote ethical principles in its operations through prevention, detection, and response to unethical practices. In my personal reflection, I have realized that I have the qualities of an advocate, experienced guide, ambassador, people mover, truth-seeker and a creative builder. These qualities will enable me to demonstrate effective team leadership when I rise into a leadership position in future.
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