Case study of General Electric Co

Case study of General Electric CoGeneral Electric stooge trace its root to the founding of the Edison Electric Light Company in 1878. By 1890, Edison had organized his various businesses into the Edison General Electric Company. The Thomson-Houston Company and the various companies that had merged to form it were lead by Charles A. Coffin. In 1892, these two major companies combined to form the General Electric Company. GE is a orbiculate manufacturing, engineering science, and serve conglomerate, formed in 1892. Today, GE is make up of six businesses, each of which includes a number of unitsGE Commercial Finance go aways loans, operating leases, financial support programs, commercial insurance, and an array of other products and services aimed at enabling business worldwide to grow.GE Health cope is a leader in the exploitation of a new paradigm of patient c ar dedicated to detecting disease earlier and helping physicians tailor treatment for individual patients.GE Industria l provides a broad range of products and services throughout the world, including appliances and lighting plastics and silicones products and equipment services.GE Infrastructure is one of the worlds leading providers of fundamental technologies to exploitation countries, including aviation, energy, oil and gas, rail and water process technologies.GE Money, formerly known as GE Consumer Finance, is a leading provider of credit services to consumers, retailers and automotive dealers well-nigh the world.NBC Universal is one of the worlds leading media and entertainment companies in the development, production and selling of entertainment, news and information to a world(a) audience.As per their last annual report at the end of 2008,at the end of the year they employed in inwardness glob anyy 323000 employees. $797,769 millions in assets 182,515 millions in revenues.Stakeholder RelationsGE is a man telephoner listed on the New York Stock Exchange and in bodilyd in the bring up of New York. The company is managed by a 16 member Board of Directors, of which 13 of the directors atomic number 18 independent. Directors are chosen annu altogethery at the annual confrontation of shareholders. Four committees assist the Board the size up perpetration, solicitude Development and Compensation delegacy, Nominating and Corporate Governance Committee, and the Public Responsibilities Committee. The Public Responsibilities Committee oversees the companys position on corporate hearty certificate of indebtedness. GE also has a team of Corporate and Business Executives who lead GEs many corporate functions and businesses. GE has very(prenominal) strong equitable shareholder control. Each share of the common stock is entitled to one vote. Shareholders are able to nominate and elect candidates for the Board of Directors through a majority. Also, GEs code of canalise, The tenderness and The Letter enables shareholders to initiate a process of dismissal of Directors. Within OrganisationExternalEmployeesCustomersSenior portion outmentShareholdersBoard Of DirectorsSuppliersShareholdersGovernment RepresentativesAudit CommitteeNon-Governmental Organizations (NGOs),Management Development And Compensation CommitteeIndustry And Financial AnalystsNominating And Corporate Governance CommitteeEnvironmental Advocacy GroupsPublic Responsibilities CommitteeMediaEnvironmental, Health And Safety CommitteeCommunity LeadersCitizenship Executive consultatory (CEA) CouncilEcomagination Advisory CouncilInvestorsInvestorsTable Key StakeholdersGEs Board of Directors and GEs Risk Committee play vital roles in the oversight and worry of the Company. From this senior leadership they are held with great accountability. The primary role of GEs Board of Directors is to oversee how management serves the interests of shareowners and other stakeholders. To do this, GEs Directors fool adopted corporate brass instrument principles aimed at ensuring that the Board is indepen dent and fully informed on the key jeopardizes and strategic issues facing GE. This is dictated by two-thirds of its Board be independent nether a strict definition of independence. The GE Board held 13 meetings in 2007 and outside Board members visited at least two GE businesses each in 2007 without senior management present in order to develop their own view of the Company. The Board also meets periodically without management. The Board and its Committees focus on the areas that are important to shareowners strategy, risk management, and mickle and in 2007 received briefings on a variety of issues, including controllership and risk management, compliance and litigation trends, U.S. and global tax indemnity, environmental risk management, social cost trends, acquisitions and dispositions, intellectual property and copyright protection, global trends, the reshaping and broadening of GEs businesses, and productivity. At the end of the year, the Board and each of its committees con duct a thorough self-evaluation as part of their normal governance cycle.Table Power v Influence Matrix glide by SatisfiedEmployeesCEAEnvironmental, Health and Safety CommitteePublic Responsibilities CommitteeEcomagination Advisory CouncilManage CloselySenior ManagementBoard of DirectorsManagement Development and Compensation CommitteeAudit CommitteeMonitorMediaGovernment RepresentativesNon-Governmental OrganizationsCommunity LeadersKeep InformedInvestorsShareholdersIndustry and Financial AnalystsEnvironmental Advocacy GroupsSuppliersPowerInfluenceLowHighHighLowSenior GE officers, including the Citizenship Executive Advisory (CEA) council, are regularly involved in reviewing stakeholder feedback. This group meets at least quarterly and reviews summary stakeholder feedback and issues important to the Companys citizenship efforts to visit that the appropriate actions and resources are in institutionalise. The CEA is comprised of tailfin senior GE executives. GE makes a commitment t o transparency in its citizenship reports where the Vice President of Corporate Citizenship and the General Counsel ensure transparency of non-financial information. GE provides training on transparency to all employees as part of induction training as closely as e-learning training that deals with compliance to policies and integrity. The citizenship reports are wide disseminated and translated to further encourage participation of its stakeholders. GE makes commitments to engaging with external stakeholders in its citizenship reports, which outline the types of nets the company undertakes. They started the reports in 2005 and are now into their fourth. GE is currently developing a company-wide approach to stakeholder engagement called, materiality. Stakeholder engagement depends on the functionality of a department, for example, with citizenship-related engagements (i.e. NGOs or public policy groups) the Vice President of Corporate Citizenship over sees external stakeholder enga gement. GE provides training to managers and executives on how to interact with stakeholders as part of the business Management and leadership classes.They have formalised engagement where they have institutionalized external stakeholders troth in corporate decision making on environmental and social issues. GE has an Ecomagination Advisory Council comprised of a Board of 6 to 8 perseverance musical theme leaders with expertise in energy and environment. The Council turn tails the company on technology research and investments, provides new ideas on its environment strategy, helps generate or review light papers, and participates in GE sponsored events. GEs Ecomagination business strategy guides the companys evaluation of its environmental impact. The strategy aims to acquire energy-efficient, less emissive products, and achieves this through the exercising of the Ecomagination Product Review form card. The score card quantifies a products environmental impact relative to oth er products. Ecomagination product revenues increased from $12 billion in 2006 to $14 billion in 2007, which as a percent of overall company-wide revenue is 23% in 2007. In the current discussion global climate change, the environment is a hot question now and impart for the forseeable future for stakeholders. The main stakeholders that can be linked with this are the ecoimagination, environmental organizations, EHS. They will more(prenominal) and more expect policies and strategies with real results and commitment to drop detrimental environment impacts. They will therefore have a great deal of cast currently and will do for some time. They can increasingly apply pressure on the company to materialize its efforts. No doubt he GE is already tackling these issues just with these external stakeholders great power will arise as they influence employees to take responsibility and increased products on the ecomagination scheme. GE already state they have increasing product line in the pipe line.This is also a media frenzy topic which is reported on daily, environmental issues can see a hole host on stakeholders mainly external influence the the senior management and BOD, these include the media, government representatives, which will influence the community and thus individual shareholders and investors. Not only will they influence the internal operations of the company but in tern the GE will guide its suppliers so no conflict of interest if they are non doing all they can to alleviate environmental issues and are seen to be responsible.GE also has the Environment, Health and Safety (EHS) Policy, which ensures consistent global standards for evaluation methods. GE provides training to operations leaders on the overview on EHS policy through Plant Manager Training. Of the Ecomagination and EHS policy are two widely circulated, but Only Ecomagination material is translated. nevertheless of the machines to facilitate the sharing of lessons learnt from ev aluations is not in place and thus contradicts the approach of external stakeholders to lead the environmental issues.GE has the Statement on Principles of Human Rights, which commits the company to observe its suppliers adherence to EHS standards in emerging markets, prohibitions against forced and child labor, local wage and hour laws evaluating homosexual rights issues and assessing the impact of major infrastructure project financing on local communities. The Vice President of Corporate Citizenship oversees the reporting and evaluation of GEs social impact while different leaders have varying responsibilities depending on the issue. For example, the General Counsel has the responsibility for compliance, governance, and ombudsperson. GE does not provide training to staff on evaluation of social impacts of their activities. Companies like GE with global tally chains face significant challenges in order to ensure that their suppliers make safe and quality products, and that they are produced on time and at competitive prices. In addition, stakeholders increasingly expect companies and their business partners to respect and implement national and international labour and environmental standards in their workplaces. This challenge becomes even greater when companies source suppliers from countries without equal to(predicate) government enforcement. While the policing model of the past has made some positive improvements, it has been relatively unsuccessful at identifying the core issues. This has dod a duplication of efforts, contributed to a pro flavorration of codes of conduct that create confusion, and has largely been an ineffective use of resources. Adding to the dilemmas are some unanswered questions, including How will competing companies in the growing economies of Brazil, Russia, India, and China manage their supply chains in semblance to international labour standards? Do consumers see the value of investing in supply chains and, if so, are the y willing to potentially pay more? Todays leading companies and multi-stakeholder initiatives are changing tack and beginning to focus their efforts on five areasImproving management systemsDeveloping effective complaint mechanisms and workplace damages platformsEvaluating internal purchasing to determine how their own actions may negatively impact the workplaceIncrease supply chain transparencyCreating incentives for their buyers and suppliers based on social and environmental performance criteriaThis shift in approach requires collaboration from a broad set of stakeholders because no one sector can in effect achieve this alone. Companies should learn from the hard lessons of the past, avoid the pitfalls that others have experienced, and consider targeting resources on building internal capacity to work in partnership with NGOs, trade unions, multilaterals, peer companies, and industry and trade associations to tackle these complex issues together. Moreover, companies and their st akeholders should collectively engage governments and encourage them to enforce their laws in order to make decent work a reality and to create a level playing field for multinational companies and for those suppliers competing for their business.GE has the code of conduct called The Spirit and The Letter, which guides the handling of internal complaints. GE also has a planetary Ombudsperson system where ombudspersons are placed in every business and country where GE operates to facilitate compliance and the complaints process. The Spirit and The Letter have the commitment to ensure mandatory discipline for anyone found to have retaliated against a whistleblower. The Corporate Ombudsperson has the overall responsibility to oversee compliance with the code. GE provides all ombudspersons with training on receiving concerns, initiating investigations, and monitoring case progress and closure. Employees receive compliance training through the intranet. This also encompasses complaint a nd response procedure for external complaints. GEs 2007 proxy statement highlights a mechanism that exists for external stakeholders to lodge complaints directly to the Board of Directors. The Corporate Ombudsman also oversees compliance with commitments made in the proxy statement, and will pass any concerns to the Audit Committee of the Board of Directors. Ombudspersons are trained on receiving and handling concerns from external stakeholders. GEs code enables any stakeholder to report concerns of corporate policies and strategies directly to the Board of Directors.With the many commitments and programs and committees in place GE keep their stakeholders mainly employees informed with reports. They have proxy statements, citizen reports, annual reports which are widely disseminated and translated. They also have key policies that are made easier affectionate such as human rights statements. Not all endeavours are translated and circulated but the majority are. Environmental and so cial aspects are reported on and also stipend of the senior management and executive directores, CEOs are all transparent. If this was not the case this could easily alienate lower level employees and other stakeholders. With the information available stakeholder placard have also been issued the task of evaluating report writing on annual and citizenship reports. They concluded in the 2008 citezen report thatGE utilized a Stakeholder Review bloodshed to assess and comment on report quality. Ongoing stakeholder engagements have enabled the Company to determine the impact and influence of its corporate citizenship efforts. The Panels commentary is intended to inform and guide report readers, as well as GE. Six people were invited by GE to join the Panel, identified indiscussion with AccountAbility, the latter acting as the PanelConvener. Panel members were selected for their interestsand concerns, their expertise and their knowledge of GE.Panel members were asked to participate as individuals, notas representatives of their organizations, Environment Social DevelopmentDepartment at the world(prenominal) Finance Corporation, HSBC Climate Change Centre of Excellence. The Panel provided feedback to GE based on a draft report, andthe commentary based on its view of the lowest report. The Panelfocused on the quality of the report, although members raisedsome performance issues in discussion with GE. The Panelscommentary, presented here, is intended to inform and guidethe report readers, as well as GE. Use was made of the AA1000Assurance Standard, but the Panels work is not a formalassurance exercise.Background to the 2008 ConveningsThis year we sought to reflect on our progress concerning theimplementation of our Statement of Principles on Human Rightsas well as our broader ecomagination and development efforts,and further explore the links between GEs operations andthe broader human rights agenda. In particular, we convenedexperts and stakeholders in three re gions to discuss How can GE further advance the implementation of theCompanys global Human Rights Policy, and in particular inrelation to our role as a global Olympics sponsor at the 2008Beijing Olympic Games in other words, What does it meanto be a good global citizen? (Geneva) How can GE further embed its environmental stewardshipwork within the core of its strategy and practice, expandingits efforts outside the United States and also connecting itsefforts to the broader development agenda? (Washington, D.C.) How can GE advance an effective approach to servingcommunities in the developing world in light of the Companys bizarre position in providing infrastructure solutions to the orphic and public sectors? (Delhi)To learn more about GE and stakeholder participants for theseconvenings, please visit www.ge.com/citizenship/processes.Insights from the 2008 conveningsGE greatly appreciated the honest and open discussions at thethree convenings. Valuing the counsel and advice we receiv ed,we would like to share a summary of the key opportunities andchallenges the convenings helped us identify and explore.We discuss many of these opportunities and challenges withinthis years report and are looking send to further engagementover the coming year to help us inform and guide our citizenshipapproach and efforts. To provide the reader with a flavor of thediscussions at the convenings, this report also features a numberof (unedited) expert perspectives authored by participants ofthe convenings. Insights includeClimate change public policyClear and consistent communication, including recommendationand illumination of effective and credible global policyframeworks, engaging in national and local debates on tradepolicies, and customer engagement on clean technology(Washington, D.C.).Company-to-country investmentLeveraging innovation and product adaptation driven by localculture and context (Delhi).Customer product-use issuesClarification of GEs approach to client responsib ility of GEproducts, including increased engagement with societyon key concerns such as dual-use technology and post-salemanagement (Geneva, Delhi, Washington, D.C.).Expanding boundariesEngaging experts as GE continues to operationalize its Statementof Principles on Human Rights and consider a life-cycle approachfor GEs products as GE applies its efforts to help reduce CO2emissions within its supply chain (Geneva, Washington, D.C.).Human rightsIncreased public positioning on business issues associated withthe emerging and ongoing human rights discussions andpro prompt engagement as they arise, e.g., 2008 Beijing OlympicGames (Geneva).Localizing engagementGreater understanding of the implications arising from GEsunique position as a business-to-business company providinginfrastructure solutions to countries (from technologydevelopment to local implementation) (Delhi, Washington, D.C.).Strategic collaborations and partnershipsLeveraging of GEs core competencies and strengths(commitmen t to innovation and ability to scale projects andprograms) in strategic collaborations and partnerships toensure acceptance and sustainability (Delhi).The Panel encourages GE to continue innovating in its reporting,and we challenge it to strive for leadership in promoting meaningfultransparency across the global business community. Injecting sustainability into financial reporting This yearsCitizenship Report has demonstrated the strategic relevanceof GEs programs for its long-term business performance.These material aspects of sustainability management andinnovation should be combine into regular investordisclosure, including quarterly and annual reports as wellas in proxy statements. Embedding citizenship within operations We would welcometransparency on how sustainability performance is broughtto life for individual GE employees through performance evaluationand compensation. Matching global reporting with national level data Utilize GEsWeb site to provide country-level performa nce data and informationfor global stakeholders, including insights and outcomes fromkey stakeholder and business engagements, especially in highgrowth regions such as Asia. Discussing public policy engagement Further strengtheningof disclosure on GEs public policy activity and lobbying onkey citizenship issues at the global and national level, includingmembership organizations that represent GE. turn makingall submissions to governments available on the Web site. Exploring human rights Shine a brighter spotlight on GEshuman rights approach and practice, and illustrate its thoughtfulnessin approaching challenging dilemmas. As operationalizingGEs human rights policy around the globe is particularlycomplex, this area does not lend itself to quantitative goals, butto case studies and an active discussion of the dilemmas andnuances central to the human rights challenges the Companyfaces. For example, the illegal use of GEs ultrasound equipmentfor sex-selection by practitioners in India or application of GEsglobal labour rights standards within its supply chain in challengingenvironments like China. Further information on steps theCompany has taken to align its performance with its humanrights policies would enrich the Report. Progressing the thrust and Climate Change AgendaDeepening of reporting on the Companys contribution to the U.S.Climate Action Partnerships commitment to 60-80% reductionin U.S. emissions by 2050 how, on a practical level, GE plans tohelp achieve these goals via technology adaptation or expansionof ecomagination. User-focused reporting Experiment and explore how best toreach and communicate with the companys divers(prenominal) rangeof stakeholders, especially those with particular, set interestsor those who may have limited access to the Web.gePublic responsibilitiesCompanies confront many dilemmas when conductingbusiness, in rich or poor countries alike, when defining theirrole in communities understanding the proper role of governmentsan d the right level and quality of influence fromcompanies that are sometimes larger than governmentsthemselves the study to respect different cultures but stillmake sure that the same values are applied all around theworld the need to have an educated workforce that fits in thecompanys processes while trying not to change localcultures expectations that companies will provide for all anddisappointment when companies need to close plants orleave communities.Much has been written and discussed about the impact ofmultinationals on communities. Stakeholders have manydifferent views and perceptions, and there is little agreementabout how to measure impacts, both positive and negative.I think, however, that there are two basic questions thatcompanies need to answer1. Are we really listening to the stakeholders who are actuallyimpacted at every step of the value chain of our business?2. What are communities going to be like when our companyleaves?Many stakeholder dialogues are going on aro und the world,and it is certainly a remarkable and great step to havecompanies like GE whose sheer size allows them to havesignificant positive impacts when defining their escape ofwork listening to diverse views and exchanging ideas withnon-business partners. They are, however, mostly focused onstakeholders who speak English or belong to organizedgroups with some international affiliation. Maybe it could begood to actually exchange ideas with the impacted communitiesthemselves to form a more complete picture.Companies should come into communities planning for thetime when they leave, be it two years or 70. Hopefully, thatway one can avoid creating dependency and promoteownership from day one. It is probably more complex to startand carry business with this view, but it is surely better toprevent risks than to manage crises.Public PolicyGE has increasingly focused on deepening and improving its abilityto work effectively with governments throughout the world. Wefirmly believe tha t a better understanding of GEs vision and businessactivities and governments impact on those pursuits will serveboth parties well. Moreover, we have made a concerted effort toenhance our working relationships with government officials.The rules governing governmental transactions and advocacyactivities differ from country to country, and can be wide-ranging andcomplex. Our total commitment to integrity has led us tocontinuously educate GE leaders on changes in the rules andregulations governing interactions with government officials.The Public Responsibilities and Audit Committees of the Boardare briefed regularly on our government relations and complianceactivities.I spend much of my time travelling internationally andmeeting people at every level within and outside GE.Our strong commitment to corporate citizenship makesGE a very realizeive place for lawyers to work. My abilityto attract the best lawyers and maintain the legal teamsstrong internal sense of community is greatly assisted bythe fact that the Company is committed to promoting theRule of uprightness and is actively working with governments andcommunities to promote ethical behaviour. GE lawyersare inspired and motivated knowing that such a strongcommitment runs through the veins of the Company.world(a) Initiative to CombatNuclear TerrorismIn 2006, the U.S. and Russian governments launched theGlobal Initiative to Combat Nuclear Terrorism. As a globalcitizen, GE is deep concerned that every safeguard betaken to ensure that legitimate commerce in nuclearmaterials is not exploited by terrorist organizations. As aglobal producer of nuclear power plants, nuclear fuels,radioactive isotopes for healthcare applications, andradiation detection equipment, GE has the experience andexpertise to make a real contribution to this goal.In 2007, GE worked with the U.S. Department of State toexpress support for the Global Initiative, and in 2008,we will participate actively in several projects, includingthe d evelopment of a model national nuclear detectionarchitecture document international cooperation indeveloping technical approaches to remotely detectradiological materials and minimizing the use of highlyenriched uranium in the production of medical radioisotopes.Countries of concernGE devotes significant resources to ensuring that businessactivities are in compliance with all applicable laws, thatthey are conducted with integrity and achieve value forour shareholders worldwide. While our policy has alwaysrequired that our businesses follow U.S. sanctions and otherapplicable laws, in 2008 we adopted a policy that goesbeyond what current laws require. In light of reputationaland business risks associated with doing business withcountries designated as State Sponsors of Terrorism by theU.S. Department of State (Cuba, Iran, North Korea, Sudan,and Syria), the Company will not accept business in thesecountries except activity that is authorized by the U.S.Government for humanitarian or pu blic policy purposes.This approach augments a policy adopted in 2005, whenGE and its board decided it would no longer do businessin Iran because of developing conditions in that country.The exceptions were to run down existing commitmentsand humanitarian activity authorized by U.S. Governmentlicenses. Since then, GE has done everything it said it woulddo in 2005. As of the end of June 2008, the preexistingcommitments with Iran have been completed. At all timesGEs policy was fully compliant with U.S. and all applicablelaws. In fact, GEs policies have been more restrictive thanU.S. law.Recent sales to Syria have been very small, involvinghealthcare products as well as non-U.S. origin power,oil and gas, and lighting. In recent years, GE has had verylittle activity in the Sudan, almost all involving the sale ofhealthcare products. GE has not had any sales to NorthKorea in the past three years. Since 1996, GE has notaccepted business in Myanmar (Burma).RecommendationsGE is