General Electric Co. Innovation Report

Published: 2021/11/12
Number of words: 2765

General Electric is a global digital industrial company incorporated in 1952 (Reuters, 2018). Its products range from power generation, oil, aircraft engines, and gas production. It has several manufacturing segments which include transportation, energy connections and lighting, aviation, and healthcare. Just like any other company, General Electric faces various issues such as innovation and leadership challenges. This paper analyzes the management structure of General Electric, explores is innovation strategies and challenges, looks into the firm’s leadership structure, and investigates its innovation framework.

General Electric Company Case for Innovation

Justification for Innovation

For any company to remain successful and sustainable in the current global marketplace, it has to embrace the dynamics of innovation. Innovation is the process of creating value from ideas (General Electric is an example of a business entity that operates in a highly challenging business environment due to the stiff competition and need for customer satisfaction) (Ngoie, 2014). The changing face of technology and globalization has allowed many business organizations, as well as individuals to use their creative abilities and leadership skills. The change in consumers’ needs and socio-environmental expectations has compelled the General Electric Company to work through imaginations and creativity. As a result, the company relies on innovations as one way of turning challenges into opportunities and converting its weaknesses into strengths. For companies that aim to maximize revenues like the General Electric, marketing innovations are vital. New products and services bring in new revenues too.

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General Electric’s new software and applications were designed to make their industrial process smarter and more efficient (Staff, 2018). The move to acquire new software was necessitated by the desire to establish a robust inventory management and a product delivery system. This would ease the process of General Electric’s product acquisition by their consumers, and keep the company a step ahead of its major competitors. Their research laboratory in the United States was established to aid innovations. Through this laboratory, the General Electric invented a more durable ductile tungsten filament (Downie & McMurray, 2013).

The management of General Electric focuses much on the development of a new natural ecosystem for the oil and gas with an aim of deploying next-generation renewable energy that is cost friendly (“Innovate for the Future,” 2018). Without innovations, such a move would most probably flop. With proper deployment of smart machines and human creativity, the company will succeed in increasing its resource productivity.

General Electric faces extremely tough challenges in its efforts to transform imaginations and creativity into innovations (Ngoie, 2014). Over the recent years, the company has managed to distinguish itself from other companies by powering, building, curing, and moving the world. General Electric Company has taken a step further in supporting creativity and innovation. This has given it a competitive edge over its business rivals. Additionally, the company’s managers dedicate most of its investments to leadership, personnel, and work environment, and as such creating good public relations.

Attaching sensors to General Electric light features allows the workers to know when the temperature is at its minimal state so that they can safely add the next rotor (Pomerantz, 2016). This eliminates work errors and the need to re-work parts as a result of defects, and for this reason saving General Electric millions of dollars. Moreover, the invention of the advanced Turboprop reduced the initial Turboprop’s weight by one quarter, reduced its development time by one third, and increased its lifespan five times the original one. Such innovation enables the company to produce specific and customized parts on demand in decentralized facilities. The products are taken closer to the consumers and consequently reduce transportation and warehousing costs.

General Electric Company Leadership Challenges and Their Suggested Remedies

The problem of Reverse Innovation

For a long time, General Electric Company has been based in rich countries like the United States (Immelt, Govindarajan & Trimble, 2009). General Electric has grown by developing high-end products at their established plants and distributing them worldwide with specific adaptations to local conditions. In the modern era and with the changing face of business, the company is struggling to take an about –face and learn to bring low-end products created specifically for the emerging market into wealthy markets. Reverse innovation is never easy for any management to master and adjust to at any time (Immelt, Govindarajan & Trimble, 2009).

Dealing with reverse innovation in a company requires a well-dedicated team of executives. One of the company’s leadership roles is to determine what needs to be done and how it should be done (Lecture 11). General Electric Company should consider the establishment of decentralized, local markets in developing countries. These markets should adopt a focus that clashes with the centralized product-focused structure. For such markets to succeed, Generic Electric executives should give the necessary support and unprecedented autonomy.

Recharging Power

Recently, power has been the most threatening problem at the General Electric Company. During the Company’s chief executive officer, Flannery’s stem-to-stern review of the company in 2017, he pointed out power as the part of General Electric that required extra work (Chesto, 2018). Previously, the company secured an integration of the energy business with a French Multinational Company, Alstom (Chesto, 2018). Unfortunately, this integration has taken much longer than it was initially anticipated. Additionally, the softening demand for natural gas turbines and related equipment has proved to be a major setback in the whole process.

To address the challenge of recharging power, the company should come up advanced equipment that would reliably convert both liquid and gas fuels to energy. Its managers should consider localizing the whole process to enable a sustained growth in all its global regions. Appointing locals to run General Electric Company businesses in the markets could ease the problem of recharging power. Additionally, they should consider public-private partnerships which will offer great opportunities to attract foreign investments and promote the company’s growth across the world.

Pressure from External Forces

There has been increasing pressure from the company’s stakeholders to the chief executive officers to find ways of increasing the company’s overall profitability and share price (Chesto, 2018). For instance Activist investor Trian Fund Management wanted the company to sell its assets at fire-sale prices. Moreover, the decision to sell the current energy Management venture based in Boston could not be the best, considering how well its technology could be integrated with General Electric’s other businesses.

To overcome such setbacks, the company’s top executives need to come up with other effective methods of making profits instead of selling their shares at fire-prices. They could, for instance, consider diversifying the company’s products so that they are affordable to middle-class earners. Such a strategy will boost overall sales and increase profits. In addition, the firm should consider laying off some workers.

Innovation Challenges In the Company and How the Company Can Adapt To Them

Overdependence on single suppliers of raw materials

In any organization, dependence on suppliers of raw materials poses innovational limitations to the company. The internal strategic factors affect the company’s innovative initiatives in terms of the organization’s vulnerabilities to price and supply fluctuations of raw material (Kissinger, 2017)s. General energy’s transport, energy, aviation, connections, and lighting are vulnerable to such market dynamics. Lack of the required raw materials means a decline in the company’s output and eventually reduces its revenues. This leaves little or no funds to support the innovation initiatives such as implementing proposed ideas.

To counter the challenge of dependence on suppliers, General Electric Company should consider securing more supplier opportunities for mutual benefits through contracts. Such partnerships will ensure flexibility and constant supply of materials even when some suppliers fail. Additionally, the company should hire procurement professionals who will offer the necessary directions to strengthen their acquisition. For the research laboratories equipment, the company should contract with more dependable suppliers who have minimal chances of delaying the supply process.

Uncertainty about the future

Effective business planning under conditions of uncertainty demands a clear understanding and management of the dynamics of innovation (Lecture 9). Being able to predict the future customer trends, market trends, and supplier trends is essential for successful innovation strategies (Jalonen, 2012). However, it is difficult for a company like General Electric to predict all these important trends without making errors and omissions. This ends up making the innovation risky to the future of the company. For example in 1970, General Electric had what was considered as the most comprehensive and advanced innovative methodologies for strategy development (Goetheer, Heijs & Oelen, 2010). However, their methodologies lacked anticipation of the expected events such as the oil crisis which hit the company in 1970’s.

To counter such costly innovation strategies, the company should hire a team of experts and consultants who will be tasked with the responsibility of outlining future realities (“Most Innovative,” 2018). The company should use the previous economic trends and developments to advise on the viability of the proposed innovative ideas. Additionally, the company should be prepared for every possibility by putting in place back up plans. Managers in the General Electric should always be ready to accept changes as it opens new avenues and opportunities for businesses. Organization leadership depends on the executive’s ability to mobilize support for policies and programs (Lecture 5)


Despite the massive investment of management time and money, innovation is still a frustrating pursuit in most of the companies (Pisano, 2015). Often, some events which the company has minimal or no control over, take place. For instance, the oil crisis of 1970’s that threatened the survival of General Electric in the market was not anticipated (Goetheer, Heijs & Oelen, 2010). Wrong timings in innovation could lead to severe losses in the company. Timing impacts business deals, cost of goods, product launches and any other decision that depends on the company’s innovations.

To address the timing challenge, General Electric should learn experiences of other companies and get to adjust itself. They should also make regular consultations with experts who can predict the future patterns of the business environment such as the political shape and market structures. Moreover, the company should have backup plans in case the original fails. This might include setting aside emergency funds.

A Framework for Innovation

General Electric’s Priority In Relation To Leadership and Innovation

General Electric is repositioning itself to be the world’s best infrastructure and technological company (“Our Strategy,” n.d.). The company mainly focuses on driving infrastructure leadership and investing in innovation to simplify the process of serving their customers around the globe. They have a well-established management team with the necessary leadership quality and experience. One of the most notable leadership priorities at General Electric is the personal responsibility (“Leadership Style at General Electric,” 2011). The company embraces a transformational leadership that advocates for the future vision. Leadership at General Electric Company starts from the leader, flows downward through every individual employee and ends with an organizational culture that values every member and his or her ideas.

General Electric Company believes in restless innovation. One of their major priorities in innovation is what the company termed as the industrial internet in the year two thousand and fourteen (Wulfen, 2014). Among General Electric’s priorities are improving their factory machines, energy infrastructure, and the industrial manufacturing processes. For what the company terms as mind mapping, they have prioritized the process of initiating the use of functional magnetic resonance imaging (Wulfen, 2014). This is intended to help the company in building a detailed roadmap of the human brain. Additionally, the company focuses on improving the production of energy. They have put in more plans to come up with extreme machines specifically designed to function in a wide range of extreme conditions.

Recommendations to Challenges Facing General Electric Company

For the challenge of reverse innovation, General Electric Company should consider investing more in the developing countries. Offering cheaper and affordable products in these countries will maximize its returns. The company should consider decentralizing the production process. With a decentralized production, specific plants will be able to customize products depending on the consumer’s preferences. The company needs to invest more in machines that will convert liquid and gas fuels to energy. This will address the problem of recharging power that is more common at General Electric.

The executives are under pressure to sell the company’s assets at fire-sale prices and sell the energy management venture based in Boston. To address such a challenge, the firm’s top management should hire a team of experts and call for a meeting with activists and stakeholders. The meeting should be designed to enlighten them on why it would not be advisable to sell the company’s assets at fire-prices.

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On the issue of future uncertainties, General Electric should set aside funds for contingencies. These funds can find use in instances where the previous decisions of the company do not go as planned and prove to be costly. Additionally, they will require to regularly hire consultants who will analyze the future plans and decide on the approaches to employ. Such consultants possess the technical knowledge on how to solve problems and reach organizational goals (Lecture 10). The company needs to address the challenges that come with relying on specific suppliers of raw materials. It should contract with different suppliers from all over the world. Such an approach will enable constant supply of laboratory equipment and production materials.

Clearly, General Electric Company is an innovation-oriented company. The company has grown by developing sophisticated high-end products for both local and global markets. Even though the company has been successful in its innovation strategies, it still has to deal with various innovation challenges. Such challenges include reverse innovation, recharging power and resisting the fire sale. In addition, the company faces other problems such as dependence on suppliers of raw materials, unpredictable future, and poor timing. To overcome these challenges and enable a smooth business production process, the managers of General Electric should consider investing more in developing countries, establishing machines that convert liquid and fuel gases to energy, and regularly seek the services of experts and consultants in strategic management.


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