General Electric Company (GE) satisfies the interests of stakeholders through a corporate social responsibility (CSR) strategy that capitalizes on business competitive advantages for the benefit of communities and individuals, shareholders, employees, customers, and the environment. In Archie B. Carroll’s theory, a firm’s corporate social responsibility strategy must respond to the demands of stakeholders, who are individuals or groups that significantly influence and are affected by the business. In the case of GE, the CSR strategy prioritizes certain stakeholder groups, based on the company’s strategic direction and leadership in its industry. General Electric considers aerospace/aviation industry stakeholders in designing its corporate citizenship and sustainability initiatives and programs. In addition, GE has initiatives for community development to address stakeholders’ interests regarding the beneficial impact of the multinational business. In stakeholder management, General Electric’s corporate social responsibility strategy succeeds by focusing on the most pressing current issues in relevant industries and markets.
Given current popular interests affecting industries, General Electric Company’s corporate social responsibility programs are designed to deal with the most significant issues facing the business. For example, the company considers corporate social responsibilities pertaining to sustainability, ecological impact, and green business ethics in avionics. In addition, GE applies information from stakeholders to inform and guide its corporate citizenship initiatives. This strategic CSR approach is based on management goals linked to General Electric’s corporate vision and corporate mission, which highlight global business leadership.
General Electric’s Stakeholder Groups & CSR Initiatives
General Electric has a multi-pronged strategy to fulfill its corporate social responsibilities. In this strategy, the company focuses on three aspects of its business: social, environmental, and governance. These aspects represent the stakeholder groups considered in GE’s corporate citizenship efforts. For example, employees’ interests are addressed under the social aspect of the CSR strategy. In managing its corporate social responsibility strategy, General Electric implements programs and initiatives in relation to global business goals. Interests relating to employees, customers, communities, and the natural environment are significant to GE’s sustainability programs. General Electric Company groups its stakeholders and related corporate responsibilities as follows:
- Social (employees, customers, and communities)
- Environmental (natural environment and resources)
- Governance (investors and government)
Social – Employees, Customers, and Communities. General Electric’s CSR strategy prioritizes the social impact of its multinational business. The social aspect covers the interests of various groups of people as stakeholders of the company, with consideration for human rights, health, and employment. For example, General Electric addresses the employment and health concerns of employees, the health interests of customers, and the health and human rights interests of communities. The GE Foundation is a major means for satisfying the interests of communities. Such social interests are significant because the corresponding stakeholders affect brand image, employee performance, and customer satisfaction. In this regard, GE’s corporate citizenship programs are based on prevailing corporate social responsibility principles on social development.
These CSR initiatives support General Electric’s generic strategy for competitive advantage and intensive strategies for growth. The aerospace company achieves strategic alignment between various business strategies and the social aspect of its corporate social responsibility strategy. This alignment is achieved through support from General Electric’s business culture (company culture). For example, the company employs HR management programs that educate about health, human rights, and employment principles. As a result, human resources enable the success of GE’s corporate social responsibility programs in various markets, such as sustainability enhancement in the aviation industry and digital industrial services industry. Moreover, the Five Force analysis of General Electric Company indicates competitive rivalry as a strong external force involving other firms, like 3M and Siemens. Successful CSR implementation helps address this strategic issue.
Environmental – Natural Environment and Resources. Stakeholders’ environmental concerns and interests are included in General Electric’s approach to its corporate social responsibilities. These interests are significant because they impact brand and corporate image, as well as the company’s access to the materials needed in its multinational business. General Electric satisfies these interests through a CSR strategy that identifies and uses the environmental concerns of stakeholders, such as concerns on sustainability and resource management. This CSR strategy enhances resource productivity and minimizes the environmental impact of the company and its customers.
Technological advancement and other industry trends discussed in the PESTLE/PESTEL analysis of General Electric Company are also addressed in the company’s corporate citizenship approach. GE has CSR programs for sustainable operations in the aerospace industry. Considering effects on operations, such corporate social responsibility initiatives affect General Electric’s operations management, including supply chain management. In addition, corporate social responsibilities for environmental interests influence General Electric Company’s marketing mix or 4P. For instance, product design and promotion consider the environmental expectations of target customers.
Governance – Investors and Government. The third aspect of General Electric’s corporate social responsibility strategy involves business governance and relations with governments. The stakeholders addressed in this CSR aspect are governments and the investors of the global business. Governance is significant because it determines General Electric’s leadership and management practices. For example, governance approaches for satisfying investors’ interests determine GE’s strategic management initiatives for improving its financial performance.
Such a link to strategic management means that the corresponding corporate citizenship programs influence General Electric’s organizational structure (corporate structure). In addition, the satisfaction of corporate social responsibilities to investors and governments contributes to GE’s strengths. For example, corporate citizenship through effective governance contributes to the high economies of scale and other competencies identified in the SWOT analysis of General Electric Company. The company’s main thrust for these stakeholders’ interests is to maximize profits through differentiation and product development based on technological innovation. For instance, GE’s corporate social responsibility strategy involves sustainability programs that strengthen the brand image for improved penetration of target markets.
Summary & Recommendations – GE’s CSR Performance in Addressing Stakeholders’ Interests
Summary. General Electric Company’s corporate social responsibilities are strategically addressed through a three-pronged approach that considers the social, environmental, and governance interests of stakeholders in the multinational business. This approach covers the most pressing issues in GE’s business, based on prevailing corporate citizenship principles. In this regard, General Electric satisfies the most notable of stakeholders’ interests. The company’s strategies, programs, organizational structure and culture, and other areas of business are developed, accordingly.
Recommendations. Potential issues in General Electric’s corporate social responsibility strategy may arise in terms of execution. For example, the company may face challenges in assessing the impact and significance of its sustainability initiatives in communities. In addition, GE may experience difficulties in managing stakeholders’ expectations and response to its CSR programs, especially because of the variety of markets where the business operates. Moreover, different markets impose different challenges in General Electric’s corporate social responsibility strategy implementation. For instance, the company’s sustainability challenges differ between the transportation sector and the digital industrial services market. Based on these issues pertaining to corporate social responsibility, it is recommended that General Electric Company:
- Ensure the involvement of stakeholders’ representatives to provide information on the significance and impact of CSR initiatives.
- Include information on corporate social responsibility programs in marketing campaigns to inform and align stakeholders’ expectations.
- Establish continuously evolving general guidelines and industry-specific guidelines for corporate social responsibility program development and implementation.
References
- Coşkun, A., Güner, H., & Fal, M. (2023, July). Human Factors and Ergonomics Awareness Survey of Professional Personnel in a Large-Scale Company from the Aerospace Industry. In International Conference on Human-Computer Interaction (pp. 432-443). Cham: Springer Nature Switzerland.
- General Electric Company – Form 10-K.
- General Electric Company – Our Philanthropy – The GE Foundation.
- General Electric Company – Public Policy.
- General Electric Company – Our Priorities.
- Park, J. G., Park, K., Noh, H., & Kim, Y. G. (2023). Characterization of CSR, ESG, and corporate citizenship through a text mining-based review of literature. Sustainability, 15(5), 3892.
- Siyahhan, B. (2023). Stakeholders and corporate social responsibility: What makes firms tip over to CSR investments? Managerial and Decision Economics, 44(3), 1436-1453.