CEO Compensation at GE: A Decade with Jeff Immelt SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
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Case Study Description of CEO Compensation at GE: A Decade with Jeff Immelt
When ISS, a large shareholder advisory group, recommended a "no" vote on Jeff Immelt's award of 2 million stock options in April 2011, GE's compensation committee had to decide whether to rescind or amend the award or ignore the ISS recommendation. Was Immelt's 2010 pay in line with his performance? How would shareholders vote on the advisory "say on pay" ballot question at GE's annual meeting in April?
Swot Analysis of "CEO Compensation at GE: A Decade with Jeff Immelt" written by V.G. Narayanan, Lisa Brem includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Immelt's Iss facing as an external strategic factors. Some of the topics covered in CEO Compensation at GE: A Decade with Jeff Immelt case study are - Strategic Management Strategies, Executive compensation and Organizational Development.
Some of the macro environment factors that can be used to understand the CEO Compensation at GE: A Decade with Jeff Immelt casestudy better are - – there is backlash against globalization, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of CEO Compensation at GE: A Decade with Jeff Immelt
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CEO Compensation at GE: A Decade with Jeff Immelt case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Immelt's Iss, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Immelt's Iss operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of CEO Compensation at GE: A Decade with Jeff Immelt can be done for the following purposes –
1. Strategic planning using facts provided in CEO Compensation at GE: A Decade with Jeff Immelt case study
2. Improving business portfolio management of Immelt's Iss
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Immelt's Iss
Strengths CEO Compensation at GE: A Decade with Jeff Immelt | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Immelt's Iss in CEO Compensation at GE: A Decade with Jeff Immelt Harvard Business Review case study are -
Diverse revenue streams
– Immelt's Iss is present in almost all the verticals within the industry. This has provided firm in CEO Compensation at GE: A Decade with Jeff Immelt case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the CEO Compensation at GE: A Decade with Jeff Immelt Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Immelt's Iss is one of the most innovative firm in sector. Manager in CEO Compensation at GE: A Decade with Jeff Immelt Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Organizational Development industry
– CEO Compensation at GE: A Decade with Jeff Immelt firm has clearly differentiated products in the market place. This has enabled Immelt's Iss to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Immelt's Iss to invest into research and development (R&D) and innovation.
Strong track record of project management
– Immelt's Iss is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Immelt's Iss in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Immelt's Iss has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Immelt's Iss has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Learning organization
- Immelt's Iss is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Immelt's Iss is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in CEO Compensation at GE: A Decade with Jeff Immelt Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Immelt's Iss are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Immelt's Iss digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Immelt's Iss has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Immelt's Iss has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Immelt's Iss to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Immelt's Iss has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses CEO Compensation at GE: A Decade with Jeff Immelt | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CEO Compensation at GE: A Decade with Jeff Immelt are -
Workers concerns about automation
– As automation is fast increasing in the segment, Immelt's Iss needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Immelt's Iss has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study CEO Compensation at GE: A Decade with Jeff Immelt, it seems that the employees of Immelt's Iss don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the CEO Compensation at GE: A Decade with Jeff Immelt HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Immelt's Iss has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Immelt's Iss has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Immelt's Iss has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Immelt's Iss even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Immelt's Iss has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Immelt's Iss has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study CEO Compensation at GE: A Decade with Jeff Immelt, is just above the industry average. Immelt's Iss needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Capital Spending Reduction
– Even during the low interest decade, Immelt's Iss has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Immelt's Iss is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CEO Compensation at GE: A Decade with Jeff Immelt can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities CEO Compensation at GE: A Decade with Jeff Immelt | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study CEO Compensation at GE: A Decade with Jeff Immelt are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Immelt's Iss can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Immelt's Iss to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Immelt's Iss to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Immelt's Iss can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Immelt's Iss can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Immelt's Iss in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Loyalty marketing
– Immelt's Iss has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Immelt's Iss to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Immelt's Iss has opened avenues for new revenue streams for the organization in the industry. This can help Immelt's Iss to build a more holistic ecosystem as suggested in the CEO Compensation at GE: A Decade with Jeff Immelt case study. Immelt's Iss can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Immelt's Iss is facing challenges because of the dominance of functional experts in the organization. CEO Compensation at GE: A Decade with Jeff Immelt case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Immelt's Iss can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Immelt's Iss can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Immelt's Iss can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, CEO Compensation at GE: A Decade with Jeff Immelt, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Immelt's Iss to increase its market reach. Immelt's Iss will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Immelt's Iss can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Threats CEO Compensation at GE: A Decade with Jeff Immelt External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CEO Compensation at GE: A Decade with Jeff Immelt are -
Environmental challenges
– Immelt's Iss needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Immelt's Iss can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Technology acceleration in Forth Industrial Revolution
– Immelt's Iss has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Immelt's Iss needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Immelt's Iss is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Immelt's Iss
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Immelt's Iss.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Immelt's Iss with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Immelt's Iss.
Consumer confidence and its impact on Immelt's Iss demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Regulatory challenges
– Immelt's Iss needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Immelt's Iss needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Immelt's Iss can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Immelt's Iss business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of CEO Compensation at GE: A Decade with Jeff Immelt Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study CEO Compensation at GE: A Decade with Jeff Immelt needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study CEO Compensation at GE: A Decade with Jeff Immelt is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study CEO Compensation at GE: A Decade with Jeff Immelt is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of CEO Compensation at GE: A Decade with Jeff Immelt is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Immelt's Iss needs to make to build a sustainable competitive advantage.
