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