Subject category:
Strategy and General Management
Published by:
Columbia CaseWorks, Columbia Business School
Version: March 9, 2020
Revision date: 16-Apr-2020
Length: 43 pages
Data source: Published sources
Abstract
For almost forty years, the General Electric Company (GE) was considered to be one of the worlds best-managed global firms. But by 2017, GE was in the rifle sights of shareholder activists, like Nelson Peltz, because it had become the lowest-performing company in the Dow Jones Industrial Index. Investors wanted a turnaround. Turning GE around could mean the abandonment of GEs traditional conglomerate strategy of organic growth and astute acquisitions, as well as an end to many of the elements of organizational structure, managerial systems, and decision-making processes that had defined how GE implemented its corporate strategy. Flannery hinted that GE was considering breaking itself up into smaller pieces, possibly going as far as to spin off its three core businesses. But since GE had owned some of the businesses on its short list for divestiture for many years, it would face huge tax liabilities in an outright sale of assets instead of doing a spin-off to shareholders. Ripping apart the GE family also had implications for the value of the corporate offices contributions to each respective line of business and its ability to renew itself organically.
Subject category:
Strategy and General Management
Published by:
Columbia CaseWorks, Columbia Business School
Version: 1 May 2018
Length: 19 pages
Data source: Published sources
About
Abstract
For almost forty years, the General Electric Company (GE) was considered to be one of the worlds best-managed global firms. But by 2017, GE was in the rifle sights of shareholder activists, like Nelson Peltz, because it had become the lowest-performing company in the Dow Jones Industrial Index. Investors wanted a turnaround. Turning GE around could mean the abandonment of GEs traditional conglomerate strategy of organic growth and astute acquisitions, as well as an end to many of the elements of organizational structure, managerial systems, and decision-making processes that had defined how GE implemented its corporate strategy. Flannery hinted that GE was considering breaking itself up into smaller pieces, possibly going as far as to spin off its three core businesses. But since GE had owned some of the businesses on its short list for divestiture for many years, it would face huge tax liabilities in an outright sale of assets instead of doing a spin-off to shareholders. Ripping apart the GE family also had implications for the value of the corporate offices contributions to each respective line of business and its ability to renew itself organically.
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Subject category:
Strategy and General Management
Published by:
Columbia CaseWorks, Columbia Business School
Version: 1 May 2018
Length: 19 pages
Data source: Published sources