John Flannery, the new CEO of GE, announced a series of decisions to roll back t

Question

John Flannery, the new CEO of GE, announced a series of decisions to roll back the scope of the company. Growing companies often diversify, but GE is doing the opposite, which is an act of downscoping. Is that a good idea for GE in the long term? In the short term, the market has punished GE for this decision.

In its first two sentences, the article referred to a "conglomerate-style empire" and the "conglomerate era" as artifacts of GE's past. In 1999, a favorable article in the Economist had praised then CEO Jack Welch for this very strategy. It is quite astonishing to see how Welch transformed it into a finance company, a decision that GE has paid dearly for since 2008.

Please use this discussion to evaluate Flannery's decision.

Explanation / Answer

Flannery's decision regarding the changes might include the recovery of lost reputation by diversifying the company and making it work friendly. This also includes reducing monarchy and giving equal right to every one irrespective of culture and religion and language. It might also include the change of strategies used in the company so far and implementing new and friendly strategies. These decisions are very useful for the company's position and they might bring back the lost reputation of the company.

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