Case study of General Electric Co

Case study of customary electric CoGeneral Electric stick out trace its roots to the founding of the Edison Electric groundless social club in 1878. By 1890, Edison had organized his various condescensiones into the Edison General Electric Company. The Thomson-Houston Company and the various companies that had merged to form it were led by Charles A. Coffin. In 1892, these two major companies combined to form the General Electric Company. GE is a international manufacturing, technology, and serve conglomerate, formed in 1892. Today, GE is trace up of six lineagees, each of which includes a subdue of unitsGE commercial-grade finance reserves loans, operating leases, financing programs, commercial insurance, and an array of more than or less new(prenominal) returns and services aimed at enabling none orbitwide to grow.GE advantageouslynessc be is a leader in the development of a new paradigm of tolerant cargon dedicated to detecting disease earlier and servingin g physicians trim treatment for separate patients.GE Industrial declargon oneselfs a broad position of products and services doneout the world, including appliances and lighting plastics and silicones products and equipment services.GE Infrastructure is one of the worlds wind providers of fundamental technologies to developing countries, including aviation, energy, oil and gas, rail and water march technologies.GE Money, formerly kn witness as GE Consumer Finance, is a preeminent provider of credit services to consumers, retailers and automotive pass oners around the world.NBC Universal is one of the worlds leading media and entertainment companies in the development, production and marketing of entertainment, news and teaching to a worldwide audience.As per their last annual taradiddle at the quit of 2008,at the stop over of the division they employed in total glob each in all(prenominal)y 323000 employees. $797,769 millions in assets 182,515 millions in revenues.S takeholder RelationsGE is a public fellowship listed on the modernistic York Stock Exchange and in bodiedd in the deposit of New York. The company is managed by a 16 member wag of Directors, of which 13 of the directors be free-lance. Directors argon chosen annually at the annual concussion of sh atomic number 18holders. Four committees assist the circuit board the Audit delegation, Management Development and fee commission, Nominating and bodied Governance Committee, and the Public Responsibilities Committee. The Public Responsibilities Committee deals the companys position on corporate hearty responsibility. GE excessively has a team of unified and Business administrators who lead GEs many corporate functions and businesses. GE has really watertight equitable sh atomic number 18holder control. Each share of the common stock is authorise to one vote. Shareholders are able to nominate and elect candidates for the bill of Directors through a majority. Also, GEs autograph of admit, The Spirit and The Letter enables shareholders to initiate a process of dismissal of Directors.Within OrganisationExternalEmployeesCustomersSenior ManagementShareholdersBoard Of DirectorsSuppliersShareholders brass RepresentativesAudit CommitteeNon-Governmental Organizations (NGOs),Management Development And Compensation CommitteeIndustry And Financial AnalystsNominating And Corporate Governance CommitteeEnvironmental protagonism GroupsPublic Responsibilities CommitteeMediaEnvironmental, Health And refuge CommitteeCommunity leadingCitizenship Executive Advisory (CEA) CouncilEcomagination Advisory CouncilInvestorsInvestorsTable Key StakeholdersGEs Board of Directors and GEs peril Committee play vital roles in the oversight and commission of the Company. From this fourth-year leadinghip 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 collect adopted corporate boldness principles aimed at ensuring that the Board is independent and to the full informed on the secern risks and strategic issues facing GE. This is dictated by two-thirds of its Board be independent under a strict definition of independence. The GE Board held 13 meetings in 2007 and outside Board members examineed at least two GE businesses each in 2007 without senior management present in clubhouse 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 system, risk management, and people and in 2007 received briefings on a variety of issues, including controllership and risk management, meekness and litigation trends, U.S. and global tax insurance insurance form _or_ system of authorities, environmental risk management, brotherly cost trends, acquisitions and dispositions, reason 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 conduct a thorough self-military rating as part of their ordinary governance cycle.Table Power v limit Matrix progress SatisfiedEmployeesCEAEnvironmental, Health and Safety CommitteePublic Responsibilities CommitteeEcomagination Advisory CouncilManage salutary-nighSenior 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 every quarter and reviews summary stakeholder feedback and issues important to th e Companys citizenship efforts to ensure that the appropriate actions and resources are in place. The CEA is comprised of five senior GE executives. GE makes a dedication to transparency in its citizenship announces where the Vice President of Corporate Citizenship and the General propose ensure transparency of non-financial information. GE provides learning on transparency to all employees as part of induction training as well as e-learning training that deals with compliance to policies and integrity. The citizenship reports are widely disseminated and translated to further encourage troth of its stakeholders. GE makes commitments to engaging with orthogonal stakeholders in its citizenship reports, which outline the types of engagements the company undertakes. They started the reports in 2005 and are now into their fourth. GE is surely developing a company-wide best(p)ment to stakeholder engagement called, materiality. Stakeholder engagement depends on the functionality o f a department, for example, with citizenship-related engagements (i.e. NGOs or public constitution groups) the Vice President of Corporate Citizenship over sees external stakeholder engagement. GE provides training to managers and executives on how to interact with stakeholders as part of the business Management and leadership classes.They open formalised engagement where they amaze institutionalized external stakeholders exponentiation in corporate decision making on environmental and social issues. GE has an Ecomagination Advisory Council comprised of a Board of 6 to 8 exertion thought leaders with expertise in energy and environment. The Council guides the company on technology research and investments, provides new ideas on its environment strategy, helps generate or review white papers, and participates in GE sponsored events. GEs Ecomagination business strategy guides the companys evaluation of its environmental electric shock. The strategy aims to strike energy-effici ent, less emissive products, and achieves this through the use of the Ecomagination produce Review score card. The score card quantifies a products environmental impact relative to other products. Ecomagination product revenues change magnitude from $12 billion in 2006 to $14 billion in 2007, which as a percent of boilersuit company-wide revenue is 23% in 2007. In the current talk aboution global climate change, the environment is a hot root word now and pass on for the forseeable future for stakeholders. The main stakeholders that can be linked with this are the ecoimagination, environmental organizations, EHS. They will increasingly judge policies and strategies with real results and commitment to reduce unhealthful environment impacts. They will therefore have a great deal of influence currently and will do for some condemnation. They can increasingly apply pressure on the company to materialize its efforts. No query he GE is already tackling these issues plainly with t hese external stakeholders great index number 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 mend host on stakeholders mainly external influence the the senior management and BOD, these include the media, organization representatives, which will influence the community and thus person 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 not doing all they can to better 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 both widely circulated, but Only Ecomagination material is translated. save of the mechanisms to facilitate the sharing of lessons learnt from evaluations is not in place and thus contradicts the get on of external stakeholders to lead the environmental issues.GE has the Statement on Principles of forgiving Rights, which commits the company to monitoring its suppliers adherence to EHS standards in emerging markets, prohibitions against forced and fry labor, local wage and hour laws evaluating serviceman rights issues and assessing the impact of major root word project financing on local communities. The Vice President of Corporate Citizenship oversees the coverage and evaluation of GEs social impact while various 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 ev aluation of social impacts of their activities. Companies like GE with global supply gyves face operative 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 meltplaces. This challenge becomes even greater when companies source suppliers from countries without adequate giving medication enforcement. While the policing model of the then(prenominal) has make some dogmatic improvements, it has been relatively unsuccessful at identifying the core issues. This has induced a duplication of efforts, contributed to a proliferation of codes of conduct that create confusion, and has largely been an in utile use of resources. Adding to the dilemmas are some nonreciprocal questions, including How will competing compan ies in the growing economies of Brazil, Russia, India, and China manage their supply range of a functions in relation to international labour standards? Do consumers see the shelter of investing in supply chains and, if so, are they willing to potentially pay more? Todays leading companies and multi-stakeholder initiatives are changing tack and stem to focus their efforts on five areasImproving management systemsDeveloping effective complaint mechanisms and workplace remediation 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 surgical process criteriaThis peddle in blast requires collaboration from a broad set of stakeholders because no one sector can effectively achieve this alone. Companies should learn from the substantial lessons of the past, avoid the pitfalls that others have experienced, and consider targeting resources on building internal strength to work in partnership with NGOs, swop unions, multilaterals, peer companies, and industry and transaction associations to tackle these complex issues together. Moreover, companies and their stakeholders 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 Global 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 com pliance 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 and response procedure for external complaints. GEs 2007 delegate statement highlights a mechanism that exists for external stakeholders to lodge complaints straight 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 well-disposed such as gentlemans gentleman rights statements. Not all endeavours are translated and circulated but the majority are. Environmental and social aspects are reported on and also compensation 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 board have also been issued the task of evaluating report make-up on annual and citizenship reports. They concluded in the 2008 citezen report thatGE utilized a Stakeholder Review adorn to assess and comment on report quality. On issue stakeholder engagements have enabled the Company to determine the impact and influence of its corporate citizenship efforts. The decorates commentary is intended to inform and guide report lecturers, as well as GE . Six people were invited by GE to join the Panel, set 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 International Finance Corporation, HSBC modality Change Centre of Excellence. The Panel provided feedback to GE based on a draft report, andthe commentary based on its view of the final exam report. The Panel think 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 want to reflect on our progress concerning the implementation of our Statement of Principles on homophile Rightsas well as our broader ecomagination and development efforts,and further explore the link between GEs operations andthe broader valet de chambre rights agenda. In particular, we convenedexperts and stakeholders in tercet regions to discuss How can GE further advance the implementation of theCompanys global human being 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 indoors 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 Companysunique position in providing fundament solutions to the hidden and p ublic 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 received,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 forward 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 include temper change public policyClear and consistent communication, including recommendationand clarification of effective and credible global policyframeworks, engaging in nati onal and local debates on tradepolicies, and customer engagement on clean technology(Washington, D.C.).Company-to-country investmentleverage inception and product adaptation driven by local socialization and context (Delhi).Customer product-use issuesClarification of GEs approach to client responsibility 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 rightsincrease public positioning on business issues associated withthe emerging and ongoing human rights discussions andproactive engagement as they arise, e.g., 2008 Beijing OlympicGames (Geneva).Localizing engagement great dread of the implications a rising 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(commitment 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 incorporated into regular investordisclosure, including quarterly and annual reports as wellas in proxy statements. Embedd ing 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 GEs sack up site to provide country-level performance data and informationfor global stakeholders, including insights and outcomes fromkey stakeholder and business engagements, particularly 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, including rank and file organizations that represent GE. Consider 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 g lobe is particularlycomplex, this area does not kick in 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 il permit 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 Energy 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- concentrate reporting Experiment and explore how best toreach and notify with the companys diverse rangeof stake holders, 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 governmentsand the right level and quality of influence fromcompanies that are sometimes larger than governmentsthemselves the need to respect different cultures but suavemake 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. a lot 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 substantiative and negat ive.I think, however, that there are two basic questions thatcompanies need to resolving power1. Are we really listening to the stakeholders who are actually force 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 around 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 course 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 pr omoteownership 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 passim the world. Wefirmly believe that 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 government activity governmental transactions and advocacyactivities differ from country to country, and can be varied andcomplex. Our total commitment to integrity has led us to incessantly 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 complianceactivit ies.I spend much of my time change of location internationally andmeeting people at every level within and outside GE.Our strong commitment to corporate citizenship makesGE a very attractive 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 Law and is actively working with governments andcommunities to promote ethical behaviour. GE lawyersare inspired and motivated sharp that such a strongcommitment covers through the veins of the Company.Global maiden to CombatNuclear terrorismIn 2006, the U.S. and Russian governments launched theGlobal opening to Combat Nuclear Terrorism. As a globalcitizen, GE is deeply 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, hot isotopes for health care applications, andradiation detection equipment, GE has the experience andexpertise to make a substantial 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 development of a model national nuclear detectionarchitecture document international cooperation indeveloping skilful 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 reputation aland 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 public 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 repressing 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