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General Electric’s Sustainable Development Strategy Case Study

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Updated: Jun 14th, 2022

Introduction

General Electric is an example of a global company that has and uses sustainable development strategies and makes a significant contribution to the development of social initiatives. Moreover, General Electric itself often becomes the initiator of these projects and their developers. This approach has two motives, such as the desire to develop a healthy, sustainable society, and the need to create and sell products for the company’s profit. This paper will study General Electric’s strategy and social initiatives to understand their benefits and its alignment with the principles of sustainability.

Adherence of Sustainability Principles by General Electric

The first and quite obvious characteristic of General Electric (GE) is its global success and high profits over the centuries. One can note, considering the largest projects and partners of the GE, that the secret of its success is in the qualitative analysis of the market and provision of the solutions to the most relevant and significant challenges. For example, the company supplied purified water to the most remote corners of the country, provided electricity and the Internet, created engines for the popular aviation industry, and improve healthcare in rural areas (Balakrishnan & Moonesar, 2015). Therefore, in this way, GE combines its company’s development and helps to make the lives of other people more comfortable.

Moreover, GE constantly evolves and sets goals to achieve sustainable development of the company and the society in which it operates. For this reason, one can note the company’s adherence to the principles of sustainable development, although the information from the case study does not reveal all the nuances of GE’s work. The principles of GE, which are clearly reflected in the case study, are ethics, business relationships, the value of products and services, environmental protection, hiring practices, and community engagement. The value of products is expressed in two dimensions, such as the initiatives to create products themselves and their profitability. For example, making aircraft engines that use 50% less fuel, or providing electrics in the rural area, demonstrate that GE not only gets profit but also benefits their customers. In addition, the development of a new type of engine is part of an initiative to reduce emissions and promote responsible consumption. This initiative clearly reflects the company’s concern for the environment.

Economic development and community involvement is also a significant part of GE’s activities. The case study discusses breast cancer prevention, the supply of clean water, the provision of portable V-scans, and other GE initiatives that have been implemented with government and local corporations (Balakrishnan & Moonesar, 2015). The level of adherence to the principles of business relations is also at a high level if one considers the number of GE’s partners and its success in many countries. These numbers demonstrate that GE’s managers show respect and also adhere to the rules of fair trade and fulfill the terms of contracts, which guarantees their reputation and long-term cooperation with business partners.

Furthermore, GE also adheres to the principle of fair hiring practices, as evidenced by its strategy of building human capital. The company, in conjunction with governments around the world, sponsors educational programs that enable students to become GE’s employees and support diversity by involving women and different nationalities in these programs(Balakrishnan & Moonesar, 2015). These training and education give employees the development and career opportunities that are part of the employment sustainability principle. All of GE’s activities are followed by ethical principles because the company demonstrates respect for all employees and partners and encourages diversity, which forms their reputation as a reliable employer and business leader.

However, GE’s adherence to such principles as governance, transparency, and investor’s returns can only be assumed due to the limited information in the case study. For example, Balakrishnan and Moonesar (2015) present a variety of data and graphs that show company profits, costs, or evaluation of the initiatives’ results. This fact can indicate high accountability of GE, but there is still not enough data to fully assess the company’s compliance with the principle of transparency. Similar judgments can be made about governance and investor’s return, since the profitability and success of a company can indicate that the company takes into account the interests of all parties and investors make a profit. For example, employee training and partnerships with other companies and government can be the result of good governance, but its problems can also not be discussed in the case study. Consequently, although a cursory examination of GE’s activities demonstrates that the company adheres to all the principles of sustainable development, there is not enough data to say for sure.

Social Corporate Responsibility of General Electric

General Electric is one of the best examples of socially responsible companies, since most of the company’s efforts and resources are devoted to initiatives that contribute to society’s development. Balakrishnan and Moonesar (2015) provide many examples of such initiatives in various fields. At the same time, while some of the projects benefit society and customers, others also help to increase the company’s profitability and retain benefits for the population of different countries.

Multiple GE initiatives’ goal is to improve the health and development of society through the introduction of technology and increasing awareness of the population. The first example is a project aimed at preventing and treating breast cancer in women in Saudi Arabia. GE has developed an effective information program and has helped hospitals acquire cancer diagnostic equipment, and these steps have reduced stigma among women and encouraged them to screen their health (Balakrishnan & Moonesar, 2015). Moreover, the program could be expanded to other countries in the region to cover other stigmatized health topics such as reproductive diseases in men and women. Another initiative was to provide hospitals with the necessary tools, equipment, and even clean water to improve the quality and accessibility of health care services.

Moreover, some of the social initiatives also brought significant benefits to the activities of GE but not only to their reputation. For example, funding courses and programs for students in different countries has given the company the ability to hire employees and save time on their preliminary training. Another example is the Ecomagination initiative, since the sale of these environmentally friendly products has brought the company more revenue than their regular goods (Balakrishnan & Moonesar, 2015). Consequently, both society and the company have benefited from such projects. Moreover, even if the company’s Social Corporate Initiatives are not entirely selfless, GE makes a significant contribution to the development of communities and the achievement of sustainable development goals.

Competitive Environmental Strategies and Sustainability Strategy

Companies can use environmental initiatives to generate profits for the company or create a reputation that distinguishes them from competitors. As demonstrated by the Ecomagination initiative, GE also used Competitive Environmental Strategies, and they are Beyond Compliance Leadership and Eco-Efficiency strategies. At the same time, the case study demonstrates that GE also uses a successful Sustainability Strategy, and it only needs to be developed by setting new goals.

Such facts as reducing water usage and greenhouse gas emission, making new products, and informing the public demonstrate that GE has adopted the Beyond Compliance Leadership and Eco-Efficiency strategies. First, the company got $130 million of energy efficiency savings, which helped General Electric stand out from its competitors (Balakrishnan & Moonesar, 2015). This feature refers to the Eco-Efficiency strategy, which allows the company to reduce costs through eco-initiatives (Stanwick, P., & Stanwick, S, 2014). The sales of Ecomagination products have also brought significant profits and image of an eco-friendly and profitable company to GE. In addition, all of the company’s goals were announced, and the public was informed of its achievements, which improved its reputation with buyers and investors. This popularity and recognition of the company’s efforts are part of the Beyond Compliance Leadership strategy (Stanwick, P., & Stanwick, S, 2014). Consequently, one might note that GE has chosen a successful combination of the two Competitive Environmental Strategies as this approach has brought it both profit and recognition.

Furthermore, an analysis of the principles for formulating a sustainability strategy and the facts about GE’s operations demonstrate that the company has and uses a sustainability strategy. Firstly, at the beginning of the case study, the author reveals that Rania Rostom, Communications Director, discusses possible strategies for dealing with breast cancer with the team. In other words, Rostom encourages employee involvement and dialogue between all parties. Second, GE establishes practices that overlap with sustainability policies and performance goals, such as producing less waste and using fewer resources. Multiple data and graphs also demonstrate that GE sets measurable goals and assesses them qualitatively, monitors, and shows a high level of accountability. Training programs for women and Saudis also indicate that the company pursues diversity and incorporates it into its work. In addition, GE has many partners and also engages thousands of employees to develop projects such as Ecomagination and Healthimagination, which demonstrates trust with company stakeholders. These facts and the positive results of the company show that GE has a sustainable development plan and successfully implements it.

However, any strategy requires adjustments and improvement to achieve new goals. Thus, the next points of GE strategy should be to change the approach for the production of existing goods in more environmentally friendly methods, involve all employees in these processes, and develop economic and health programs in more countries. For example, breast cancer prevention and treatment program is suitable for all countries in the region, although it requires some adjustments. Therefore, while the facts about GE demonstrate a sustainability strategy, adapting and expanding it is essential for the business to be socially responsible and profitable.

At the same time, company leaders must revise and establish precise KPI measures to monitor the process of goal achievement. For example, GE employees volunteer more than over 1 million hours of community service every year; however, these numbers do not reflect a KPI measure for every worker (Balakrishnan & Moonesar, 2015). Consequently, a company can set a 40-60 hour volunteer hour rate for each employee to participate in various social initiatives.

Another indicator could be a decrease in greenhouse gas pollution and a 15% reduction in resources for manufacturing by changing the way the company’s traditional products are made. This indicator is significant but achievable if leaders use the same approaches as for Ecomagination initiative. A similar initiative includes increasing the number of products or redesigning them using the life-cycle thinking strategy by 20%. In addition, a 20% increase in funding for courses for women could also be a KPI indicator aimed at increasing the diversity of company employees. Data from the case study shows that GE set similar goals for the current strategy, but their adjustment and expansion are necessary for the development of the company and an increase in its work transparency.

System Thinking and Life Cycle Thinking in General Electric Strategies

The case of GE’s work and Ecomagination initiative demonstrates the use of the system and life-cycle thinking in creating a company’s development strategy. First of all, the company set goals that systematically covered the issue of environmental protection by creating an Ecomagination project, which has given significant results and has potential for the future. Life-cycle thinking involves planning through a strategy in which the company considers each stage of creation, sale, and recycling of goods as a basis for the next step. This approach reduces the influence of society and the environment on the product, since the stage is supported by the previous one. For example, recycling Coca-Cola’s plastic bottles allow it to save resources on making new bottles and reduces pollution.

GE also took into account most of the steps in this cycle by reducing resources and waste from the manufacture of Ecomagination goods and making them environmentally friendly, which guarantees them buyers’ demand. For example, most aircraft engines that use 50% less fuel and, therefore, less pollute the atmosphere are relevant in the era of society’s transition to a more environmentally friendly transport (Balakrishnan & Moonesar, 2015). Reducing resource use is also an initiative with long-term and systemic implications as new manufacturing approaches can be used for other products and will be relevant in the future. Therefore, while GE product recycling is not discussed in the case study, the rest of the Ecomagination goals represent the company’s life thinking cycle.

Conclusion

Therefore, the example of General Electric demonstrates the successful operation of a business by using a competitive and sustainable development strategy. One can draw such conclusions by considering the successfully implemented projects of the company, its business partners, and profits. Firstly, General Electric demonstrates the example of a corporation that is actively involved in social initiatives in various countries, which forms its image as a responsible and trustworthy company. This approach contributes to both the development of society and the goals of the company, since it allows GE to cooperate with large corporations and governments. At the same time, a high level of social responsibility results from the implementation of a sustainable development strategy that includes environmental initiatives, education and engagement of diverse employees, and support of public health. This strategy builds the company’s reputation and brings direct positive results, such as reduced production costs, high sales, and employees’ loyalty. Consequently, the example of General Electric demonstrates that building and using a sustainable development strategy is a necessity and a path to the development of a business company.

References

Balakrishnan, M.S. & Moonesar, I.A. (2015). General Electric: How GE worked to transform oncology healthcare in the Kingdom. Emerald Emerging Markets Case Studies, 5(3), 1-29. Web.

Stanwick, P., & Stanwick, S. (2014). Understanding Business Ethics. Sage.

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