General electric at the crossroads: The end of the last US conglomerate?

摘要

In 2000, General Electric (GE) was the world's most valuable company, with a market capitalisation of $520 billion. At the end of 2008, GE's market capitalisation had fallen 69% to $163 billion. This paper analyses first the direct causes of the decline, and then the longer-term root causes, which are attributed to the mismatch and dissonance between GE's present leadership, strategy and structure and the continuing crisis environment. We offer guidelines for the restructuring of the now obsolete corporate conglomerate, and how to meet the major challenges faced by GE's executive management: 1 go back to GE's traditional core competences and divest non-core businesses 2 strengthen the authority of the financial and auditing function 3 expand globalisation 4 rebuild the mutual trust between company and employees 5 continue to expand global R&D to become again a leader in creativity and innovation. We develop a pessimistic and an optimistic scenario for the next decade and conclude that the most probable outcome will be GE survival and gradual recovery.