General Electric Company (GE) has an organizational structure that supports the transformation of the business into a premier digital industrial company. This transformation and leading industry position is highlighted in the corporate vision and corporate mission of General Electric. The company’s organizational structure or corporate structure defines the composition and arrangement of components relative to each other, such as the interconnections and interactions among offices and departments. GE’s company structure has evolved to enable support for the operations of separate subsidiaries or segments. For example, the company has structural features that allow each of its operating segments to develop products and implement industry-specific marketing campaigns. General Electric’s organizational structure also promotes focused improvement in products through research and development programs pertinent to the unique conditions of the transportation, aerospace/aviation, and digital industrial services industries. With its business structure, GE continues to grow as one of the largest companies in the global market.
General Electric’s corporate structure influences the company’s management practices. These practices are developed within the limits of the business, such as structural limits for operations. For example, managers’ decisions in applying General Electric’s generic competitive strategy and intensive growth strategies are partly based on how the organizational structure supports strategic implementation. Thus, structural characteristics are among the determinants of business capabilities. GE’s organizational structure must evolve to address limits and improve support for business growth and competitiveness against other firms, like Siemens and 3M.
General Electric Company’s Organizational Structure Type & Characteristics
General Electric Company has a multidivisional organizational structure. In this structure, the company’s management emphasis is on supporting separate but interconnected operations in various industries. For example, each of GE’s divisions has a set of officers to implement strategies that suit corresponding industries and markets, such as the avionics market. In this way, the corporate structure optimizes General Electric’s effectiveness in diversification and in addressing industry-specific challenges. The company’s structural features are a critical success factor for business growth and industry leadership in markets around the world. The following are the main characteristics of General Electric’s organizational structure:
- Business-type divisions
- Organization-wide corporate teams
- Geographical divisions
Business-Type Divisions or Operating Segments. General Electric’s organizational design considers its subsidiaries as operating segments, which are divisions that represent the different businesses of the company. This primary characteristic of the organizational structure prioritizes the needs of business endeavors based on specific market conditions. For example, GE’s digital services operations implement strategies that respond to business needs in the industrial services market. Thus, the structural feature of business-type divisions contributes to the strengths identified in the SWOT analysis of General Electric. These divisions also evolve as the company changes its strategies and realigns its operations to industry potential. At present, General Electric has the following operating segments as business-type divisions in its corporate structure:
- Additive
- Aerospace
- Capital
- Digital
- Power
- Renewable Energy
Organization-Wide Corporate Teams. General Electric Company uses organization-wide corporate teams to implement strategies for the entire firm. These corporate teams are a secondary structural feature that ensures coherence among all business divisions. This characteristic of GE’s organizational structure is essential to maintaining a strong and stable conglomerate. However, organization-wide corporate teams are only a secondary feature of the corporate structure because General Electric’s business-type divisions are more significant in influencing strategic decisions. For example, while GE’s digital services segment implements organization-wide strategies, most of its strategies are specific to the segment’s markets, such as the market for industrial service applications. The organizational hierarchy involves the following departments representing centralized corporate leadership and management teams at General Electric’s headquarters:
- Office of the CEO
- Technology
- Marketing
- Information
- Operational Transformation
- Human Resources
- Communications
- Finance
- Legal and Secretariat
- Business Development
- Sustainability
- Strategy
- Risk
- Audit
- Diversity
- Treasury
Geographical Divisions. Geographical divisions are among the factors that General Electric uses in analyzing and reporting business data. This characteristic of the organizational structure considers geographical differences among markets. For example, all of GE’s segments or divisions use the same set of geographical divisions to organize business data. This structural feature is only a minor factor in managerial decision-making processes. Nonetheless, geographical divisions influence the location strategy, inventory management, and supply chain management practices that form part of General Electric’s operations management approach. The following geographical divisions are an aspect of GE’s corporate structure:
- United States
- Europe
- China region
- Asia (except China region)
- Americas (except U.S.)
- Middle East & Africa
General Electric Company’s Corporate Structure: Advantages & Disadvantages, Recommendations
An advantage of General Electric’s organizational structure is its support for strategic development for each operating segment. For example, GE’s structural characteristics enable the Aerospace segment to have a separate set of strategies. Another advantage of General Electric’s corporate structure is its support for coherence throughout the company. For instance, organization-wide corporate teams develop and implement strategies for all segments or divisions of the company. These advantages help facilitate General Electric’s growth by strengthening operational capabilities and competitiveness to match business needs, market challenges, and industry trends.
A disadvantage of General Electric’s organizational structure is the potential difficulty of streamlining the strategic co-development of operating segments or divisions. For example, this disadvantage imposes challenges in aligning the development of GE’s avionics operations with the development of its digital industrial services. General Electric needs to exert additional effort to ensure such alignment. This alignment promotes technology transfer and technology sharing among General Electric’s divisions. Thus, based on this structural feature, it is recommended that the company’s managers implement co-development strategies alongside other strategies for organization-wide implementation. This recommendation addresses the corporate structure’s disadvantage while allowing General Electric to continue enhancing its operations through business-type divisions.
References
- GE Leadership: CEO, Executives, & Management Team.
- General Electric Company – Form 10-K.
- General Electric Company – Working at GE.
- U.S. Department of Commerce – International Trade Administration – Aerospace Industry.
- Xia, Y., Li, X., & Wang, X. (2023). The influence of organizational structure on the dynamic capability of enterprises: The regulating effect of technological innovation. Science, 11(2), 57-66.