Every business has a set of key characteristics or values that make up an organizational culture which is unique to its business. Organizational behavior examines “the impact that individuals, groups, and structure have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness” (Robbins, 2005). The purpose of this research paper is to identify and evaluate General Electric’s (GE) organizational culture, organizational behavior, and customer service standards. We will also uncover how successful GE has been in implementing organizational behavior concepts in the following three categories: (1) motivation, (2) group behavior, (3) organizational culture.
General Electric has their organizational values posted right on their website. By doing so, they have provided written expectations to their employees regarding ethical behavior and integrity in the work environment. These values reflect the energy, spirit, and solid foundation of the company, articulating a common code of organizational behavior. Also, GE’s bold set of management strategies is aimed at increasing innovation and improving productivity to make the company more competitive.
GE’s organizational culture is considered one of high ethical standard in the corporate world. According to The Age of Ethics (KPMG, 2007) “GE now has one of the best ethics compliance programs in existence_”_, says Larry Ponemon, national director of Business Ethics Services at KPMG”.
Since Thomas Edison started General Electric in 1876, the company has steadily grown into a tremendously successful organization and one of the largest companies in the world. Several management and organizational strategies have been used through out the years in order to attain the current status of the firm.
When looking at an organization’s cultural appeal, one must first decide what they are looking for; what appeals to me may or may not appeal to someone else. There are a few categories within GE’s organizational culture that appeals to me personally. These categories include but are not limited to:
Leadership: It is important for a company to allow leaders to have the freedom and flexibility to contribute their knowledge and expertise in both their daily job and at company levels. “At the top, we don’t run GE like a big company. We run it like a big partnership, where every leader can make a contribution not just to their job, but to the entire Company” (Immelt, J., 2005).
Work Environment: A company should provide a pleasant and vitalizing work environment that is easy to balance with my personal life. “GE is an invigorating place to work. Ours is a high-performance culture that emphasizes high-integrity business practices as well as work/life balance” (Our Culture, 2008).
Training and Education Programs: Successful companies provide additional training and educational benefits that will enhance employee leadership capabilities. “We invest nearly $1 billion a year in career development for our employees at every level of professional growth.” (Leadership Programs, 2008).
Part of the culture and behavior of GE is the use of sigma six. “Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services” (Six Sigma, 2008). Sigma is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many “defects” you have in a process, you can systematically figure out how to eliminate them and get as close to “zero defects” as possible. Six Sigma has changed the makeup of GE-it is now the way we work – in everything we do and in every product we design” (Six Sigma, 2008). Within GE, an employee can be certified in Six Sigma, either as a black belt or a master black belt. These titles hold prestige for the employees and add to employee motivation and employment satisfaction.
When discussing the organizational culture within a company such as GE, we can break management concepts down into three categories. According to Argenti (2002), organizational behavior in organizations is usually broken down into three main areas:
Individual level elements: managing individuals
Group level elements: managing teams
Elements of organizational structure: managing the organization
Not only can the application of organizational behavior principles improve an organization’s effectiveness, organizational behavior provides a manager the information and knowledge needed to manage an effective workforce (Argenti, 2002). With the advent of organizational perspectives, the analysis of why people instill their presence in an organization is not only because of self-aimed goals of growth and enhancements, but also to locate themselves in a social place in accordance to the area of their perceived belonging (Stroh, Northcraft and Neale, 2002).
Motivation is central to understanding behavior in organizations and a key managerial factor. Two aspects of motivation are structuring tasks to satisfy worker and organizational needs and providing the proper direction for worker actions (Stroh, Northcraft and Neale, 2002). There are a number of factors when it comes to the difference in worker performance. One of these factors is related to different levels of ability among employees. Differences in ability arise from the simple fact that there are significant individual differences that affect work performance. The effort expended by the employees toward the realization of organizational goals greatly depends upon the status of behavioral motivations (Vasu, Stewart and Garson, 1998). GE has implemented theoretical frameworks in order to generate further explanations in behavioral motivation not only of the employees but the organization as well.
GE uses a goal-setting theoretical framework_._ Basically, the theoretical concept implicates the application of goals as driving forces that provide the basic idea of what and when to achieve a certain target. Management by Objectives (MBO) is one example that exemplifies the application of objectives in order to achieve the final formulated outcome of the plan, goals (Robbins, 2005). Jack Welch, CEO from 1981 – 2001, set two clear and simple goals for GE and outlined several targets for reaching those formulated goals. The goals were to become the most competitive corporation in the world and to become the nation’s most valuable corporation. Jack Welch created an organization tension in 1981 aimed at motivating these changes by redefining GE’s goals and targets (Cushman, 2003).
GE also uses a reinforcement theoretical framework. Reinforcement is used to enhance desirable behavior. The application of reinforcement theory is central to the design and administration of organizational reward systems. Well-designed rewards systems help motivate behavior, actions, and accomplishments, which advance the organization toward specific business goals. Strategic rewards go beyond cash to include training and educational opportunities, stock opinions, and recognition awards.
GE makes good use of the principle of employee participation wherein employees participate in the decisions that determine the methods to be used in the achievement of organizational objectives. GE provides promotions especially for those employees that obtain satisfactory performances as evaluated by the human resource department and approved by managerial committees (Cushman, 2003). Furthermore, incentives vary from salary increase to travel privileges where the main aim is to motivate the workforce.
“A group is defined as two or more individuals, interacting and interdependent, who have come together to achieve particular objectives” (Robbins, 2005). Groups can be either formal or informal. According to Robbins (2005) these two groups are described as:
Formal groups – Defined by the organization’s structure, with designated work assignments establishing tasks.
In formal groups – Encompass the behaviors that one should engage in are stipulated by and directed toward organizational goals.
From 1985 up to the present, General Electric started to place in service work teams in order to facilitate cooperative behavior and leadership as aimed by their high-involvement strategy (Miller, 2002). As far as team building, GE implements a Five-Stage Model for group development within the organization. According to Robbins (2005) the five stages include: forming, storming, norming, performing, and adjourning. In addition to these five stages GE has also implemented a pre-stage. According to Miller (2002) the breakdown for GE’s five stage model is as follows:
Pre-stage 1: GE screens the capacity of every employee upon application and all throughout performance in order to disseminate employees in the rightful function.
Stage 1: Forming: Upon achieving the rightful components of the team through HR jurisdiction based on employee evaluation, formation of the tem is initiated.
Stage 2: Storming: Work teams are in effect given new _property rights_ while being guaranteed a great deal of control over performance standards.
Stage 3: Norming: Work teams are given strong guarantees of employment security to ensure that employees do not put themselves out of work by increasing production.
Stage 4: Performing: Workers were generally guaranteed opportunities for training, restraining, and promotion.
Stage 5: Adjourning: Fourth, compensation schemes have been changed in order to provide equity among work teams in the firm through profit-sharing plans or stock ownership plans.
Organizational culture is comprised of the mind-set, experiences, beliefs and values of an organization and its employees. Currently, there are seven primary characteristics of organizational culture as described by Robbins (2005): innovation and risk taking, attention to detail, outcome orientation, people orientation, team orientation, aggressiveness, and stability. All indications are that GE successfully embodies five of the seven primary characteristics of organizational culture:
Innovation and Risk Taking: GE employees focus on innovation as their basis for taking calculated risks for change in the areas of transforming health care, cleaner power generation, exploring nanotechnology, aviation technology, greenhouse gas reduction, and global research facilities (Innovation, 2008).
Attention to Detail: GE employees focus on attention to detail in such areas as customer service, quality and assembly of products, meeting performance targets, enhanced decision-making through training and education.
People Orientation: GE considers their more than 300,000 employees to be their greatest asset, and they are “passionate about making life better with new ideas and technologies” (Our People, 2008).
Team Orientation: A significant part of GE’s culture as a global company involves nurturing diverse and cross-cultural teams in such areas as public relations, automotives, global research, nanotechnologies, and marketing (Our Culture, 2008).
Aggressiveness: Though GE provides the tools and environment necessary for employees to be aggressive and competitive, it is ultimately up to the employee themselves to demonstrate hard work.
Organizational culture essentially provides a company with a concrete anchoring point, even if the meaning it carries is vague and only imperfectly transmitted. An organizational culture also involves the expression of emotion, and by this venting of emotions organizational culture can assist employees in dealing with stress. As GE continues to grow and evolve, the company’s organizational culture will be subject to periodic changes and updates.
From everything that I have found, it is apparent that GE’s organizational culture is both ethical and customer-responsive. All indications are that GE has obtained its current status through the successful applications of organizational behavior concepts; specifically through motivations guided by specific goals and reinforcement plans. GE has successfully implemented theoretical frameworks through goal-setting, reinforcement, involving employees in the decision processes and offering incentives such as: salary increases, travel privileges, stock options, and bonus plans. GE has successfully implemented group behavior tactics using the Five-Stage Model, with the addition of the pre-stage described in _Managerial Dilemmas: the Political Economy of Hierarchy_, for group development within the organization. Finally, GE successfully embodies five of the seven primary characteristics of organizational culture.
Under CEO Jack Welsh, and current CEO Jeff Immelt, GE was able to communicate their vision of Six Sigma and training and development programs at GE. They were also able to become successful because of a belief in the employees and their talent. One of the most important traits a leader can have besides communication skills is the ability to see the potential of an individual and make that individual not only see it too but also live up to that potential. Based on the above findings, my evaluation of GE’s organizational culture is that they do provide a strong framework for positive attitudes, experiences, beliefs and values that would be appealing to almost anyone looking for job satisfaction and advancement within an organization.
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