Ad Here  
August
September
October
November
December
January
 
 
Secured NCDs from Shriram City Murugappa- a year of consolidation WABCO’s second Chennai plant ALL to launch electric busses Indigo stays leader with 40 per cent share Three more leather clusters… Inclusive and forward moving... Is Indian telecom industry heading for a monopoly? ISRO's 100th mission Chennai to get a roundabout Metro BRICS development bank The new look- 4s Verna ECGC expands operations Focus on self-certification and third party inspection Changing dynamics in human resource management An aerospace-defence cluster in Tamil Nadu… Apple maps – finding its way AirAsia India infuses funds to fight out competition Celebration time at MS Chola Holiday Inn opens in OMR Chennai Brand leaders come forward... ALL – truck industry is recovering from degrowth Placing the right shoe forward... World labour laws at a glance Hero Motocorp - smooth ride Chennai will soon get its World Trade Centre Blue Star plans a new plant in south Purdue and IIT-M sign the dotted line An American alliance in the chemical industry? Celebrating 180 years of relevance Ridley marathon to India - Reality bytes Downsizing spree... Digital retail transactions stabilise at higher level… STFC raises money Well-refined – RIL’s refinery margins zoom Gem of social service... Airlines wage price war People Flow Day- Safety LVB gears to become a financial supermarket Economic issues take a back seat at G20 summit Dynamic e-commerce scenario Smart controls for cooling large multi-zone spaces ... Need to focus on ease of doing business... Realising double digit growth in Tamil Nadu Business Briefs Techies trip to India TN budget pragmatic and moderate on fiscal deficit Scoot offers just Rs.13,500 to ANZ... Pharma market dozes Creating Tamil Nadu Banana brand IFCI to raise NCDs upto Rs 2000 crore Climate change may change the way businesses work... Business Breif Economic, business and social sustainability A global plastic event in India Chola MS net crosses 100 crores ALL-two launches in a row Make way for the new and dynamic railways Big-ticket investments march towards Punjab TII’s single largest investment at Thiruthani Housing Innovation Challenge, 2015 Four daughters and a proud father Industry-well poised to invest on expansion Tata Steel commence operations at Kalinganagar Auto test tracks launched at GARC Oragadam campus TII-challenging year with flat growth Nothing to hide... Adding Zest to Scooty TOP 10 CEO Compensation Towards peace of mind Automotive Vision Plan II... Schwing Stetter India joins hands with US-based Gomaco Indian Bank – global businesses crosses Rs 3 lakh crore... Chennai Port is at last decongested! Steel loses its sheen Time to fast-pace the logistics sector Research needs more funding Rating of states to be released soon Illicit markets a concern to growing economy Hyundai excites again Carrefour’s quick exit On the ‘milky’ way Striking cords for 25 years… Nigeria comes nearer Backpack laboratory Connecting the unconnected Bridging the skill deficit in pharma industry TiE applauds innovative entrepreneurs Strategy war escalates between Hero and Honda TCS’ revenues cross Rs 100,000 crore CUB: towards card-less withdrawal Curbing steel imports will hurt small business... Applauding enterprise... Investor friendly Japan Veritas Finance- financing the unfinanced Sun Edison launches solar pumps Durga - India’s largest blast furnace; now operational Realty sector takes a break... TVS Logistics – another acquisition to sharpen the business model European crisis is a global crisis! SumInfra- corridor based development... Waste, a gold mine When Centre visits the state Innovation that helped Chennai port Flexible labour laws… More gensets and diesel engines from TAFE Chola MS launches motor app OBO Bettermann for better lightning protection
 
Downsizing spree...
“When the rate of change on the outside exceeds the rate of change inside, the end is in sight,” said Jack Welch.

Tough words from an iconic leader, who also said that every leader and every firm will have to reinvent themselves every few years and the velocity of that reinvention depends on the changes in the industry and the environment they are part of.

The rapidly growing digital, the rapidly changing industrial world and the many firms that are at the intersection of the two worlds have quite a few challenges to address in today’s times of tectonic shifts. While this juncture has many companies in a tight spot to establish survival, some also herald it as an opportunity to achieve dominance over others.

The new CEO of GE, John Flannery, took some drastic decisions soon after he took the top job.  It sent shock waves through the markets and the 330,000 strong firm. GE shares slumped on his cutting the dividend by half.

 

Moody’s downgrades GE

The ‘extreme deterioration’ in GE’s energy business, prompted Moody’s Investors Service to downgrade GE.

Jeff Cox of CNBC puts it in a succinct form: “Moody’s takes GE to task for using $25 billion from asset sales in 2016 and 2017 to repurchase stock in an effort to boost share price, taking out $10 billion of debt to fund acquisitions and paying out a dividend higher than cash flows and as the company was downsizing key operations.” 

GE has a long road ahead to turnaround, to shed businesses, to refocus on strong businesses like healthcare and so on. In fact, in alignment to this notion, GE has now closed all R&D centres except the ones in the US and India. These crossroads are somewhat similar to what Lou Gerstner faced in IBM, when IBM was in a much worse state and faced near bankruptcy.  That story is brilliantly documented in Gerstner’s book, Who Says Elephants Can’t Dance?

Even the elephant can dance.

 

Challenges of de-diversification…

Prof Michael Useem of the Wharton School sums it up by stating that Capital Allocation Policy and Ope-rational Rigor are two of the major issues that brought both firms to their knees. 

He believes that the new strategy of John Flannery, which he calls de-diversification, is the right one, but there are very many challenges that GE will face in executing such a strategy. 

IBM was turned around by 2002 when Lou Gerstner left a job well done. Lou, being an outsider, wasn’t expected to succeed in IBM.  He eventually did.  But John Flannery, being the homebred leader that he is, has a lot of weight on his shoulders as he wrests the future of GE. 

To recollect Jack Welch’s four Es for a leader: John has shown the Energy and the Edge in making firm decisions and moving forward. The world is yet to see his ability to Energize GE and his Execution ability to accelerate the change inside to match the change outside. 

Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com