Exampls of Price Mechanism in China

In current years in China, a nationwide famous tea called Xihu Longjing Tea is allocated to buyers using the price mechanism. This kind of tea is produced only in one place, Xihu, or West Lake, in Zhejiang Province in China, and is very dependent on weather. If in one year there is frost in spring in which Longjing Tea is harvest and produced, the quantity of production will plummet seriously. This shifts the supply curve to the left in a large scale, which makes the price high-rocket to the new equilibrium point by moving along the demand curve. Then in this year Longjing Tea will become a kind of luxurious drink.Only rich people are able and have the willingness to purchase, who regard this as a way to show off their wealth. I think the society should use the price mechanism to determine for whom this good is produced because as rareness, luxury, as well as consumption for enjoyment, the change of the price will not make big effect on the living situation of the middle class and di sadvantaged consumers. Price mechanism in the market of Longjing Tea has no impact on social equity but improve efficiency of allocation. Also in China, vegetables and meat are products that are not allocated by the price mechanism.Instead the price is stipulated by the government. Although vegetable production and transportation, like Longjing Tea mentioned above, are affected by seasonal climate, the Chinese government makes its effort to stabilize the price. I believe that the society should not use price mechanism to allocate vegetables and meat because they are daily necessities, which are produced for all people, the riches, the middle classes, as well as the poors. I think government should spend some of their revenue to stabilize the increasing price in order to gain equity and the stability of the society.

Case of Ge Growth

CHRISTOPHER A. BARTLETT GE’s Growth Strategy: The Immelt Initiative Yet, for the past year GE’s share price had been stuck at around $35, implying a multiple of around 20 times earnings, only half its price-to-earnings (P/E) ratio in the heady days of 2000. (See Exhibit 2 for GE’s 10-year share price history. ) It frustrated Immelt that the market did not seem to share the belief that he and his management team had in his growth forecasts. â€Å"The stock is currently trading at one of the lowest earnings multiples in a decade,† he said. â€Å"Investors decide the stock price, but we love the way GE is positioned.We have good results and good governance. . . . What will it take to move the stock? †1 Taking Charge: Setting the Agenda On Friday, September 7, 2001, Immelt took over the reins of GE from Jack Welch, the nearlegendary CEO who preceded him. Four days later, two planes crashed into the World Trade Center towers, and the world was thrown int o turmoil. Not only did 9/11 destabilize an already fragile postInternet-bubble stock market, but it also triggered a downturn in an overheated economy, leading to a fall in confidence that soon spread into other economies worldwide.Do No After the chaos of the first few post-9/11 days during which he checked on GE casualties, authorized a $10 million donation to the families of rescue workers, and dispatched mobile generators and medical equipment to the World Trade Center, on September 18 Immelt finally focused on reassuring the financial markets by purchasing 25,000 GE shares on his personal account. Three days later, he appeared before a group of financial analysts and promised that 2001 profits would grow by 11% and by double digits again in 2002.As impressive as such a performance might have appeared, it was less than Welch’s expansive suggestion in the heady days of 2000 that GE’s profits could grow at 18% per annum in the future. 2 The net result was that by th e end of Immelt’s first week as CEO, GE’s shares had dropped 20%, taking almost $80 billion off the company’s market capitalization. ________________________________________________________________________________________________________________ Professor Christopher A.Bartlett prepared this case from published sources. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright  © 2006 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www. hbsp. harvard. edu.No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwiseà ¢â‚¬â€without the permission of Harvard Business School. This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. tC op yo In February 2006, after four and a half years in the CEO role, Jeff Immelt felt General Electric (GE) was finally poised for the double-digit growth for which he had been positioning it.Having just announced an 11% increase in revenues for 2005 (including 8% organic growth), he was now forecasting a further 10% revenue increase in 2006. And following 12% growth in earnings from continuing operations in 2005 (with all six businesses delivering double-digit increases), he committed to leveraging the 2006 revenues into an even greater 12% to 17% earnings increase. It was a bold pledge for a $150 billion global company. (See Exhibit 1 for GE financial data, 2001–2004. ) rP os t 9-306-087 REV: NOVEMBER 3, 2006 306-087GE’s Gro wth Strategy: The Immelt Initiative To make matters worse, as the year wore on, a scandal that had been engulfing Enron finally led to that company’s bankruptcy. Soon, other companies were caught up in accusations of financial manipulation, including Tyco, a company that had billed itself as a â€Å"mini GE. † Again, the market punished GE stock, concerned that its large and complex operations were too difficult to understand. Beyond all this immediate market pressure, Immelt was acutely aware that he stood in the very long shadow cast by his predecessor, Welch.During his 20 years as CEO, Welch had built GE into a highly disciplined, extremely efficient machine that delivered consistent growth in sales and earnings—not only through effective operations management that resulted in organic growth (much of it productivity-driven) of 5% annually, but also through a continuous stream of timely acquisitions and clever deal making. This two-pronged approach had resulte d in double-digit profit increases through most of the 1990s. Building on the Past, Imagining the FutureImmelt committed to building on what he saw as the core elements of the company’s past success: a portfolio of strong businesses, bound through a set of companywide strategic initiatives and managed by great people in a culture that was performance driven and adaptive. It was a source of competitive advantage that Immelt felt was not easily imitated. â€Å"It requires financial and cultural commitments over decades,† he said. Having committed to GE’s fundamental business model, Immelt wasted little time in articulating a new vision of growth based on using GE’s size and diversity as strengths rather than weaknesses.He wanted to take the company into â€Å"big, fundamental high-technology infrastructure industries,† places where he felt GE could have competitive advantage and where others could not easily follow. He elaborated this into a vision o f a global, technology-based, service-intensive company by defining a growth strategy based on five key elements: 2 This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. Do No Our businesses are closely integrated.They share leading edge business initiatives, excellent financial disciplines, a tradition of sharing talent and best practices, and a culture whose cornerstone is absolute unyielding integrity. Without these powerful ties, we could actually merit the label â€Å"conglomerate† that people often inaccurately apply to us. That word just does not apply to GE. . . . What we have is a company of diverse benefits whose sum is truly greater than the parts; a company executing with excellence despite a brutal global economy. . . . We believe GE is different, and one of the things that makes us different is that— in good times and in badà ¢â‚¬â€we deliver.That is who we are. 4 tC While recognizing the need for change, Immelt saw little need to challenge the basic business model on which GE had operated for decades. Like his predecessor, he bristled at the characterization of GE as a conglomerate, preferring to see it as a well-integrated, diversified company. On taking charge, he explained: op yo The consistent reliability of GE’s growth had created an image in shareholders’ minds of a powerful machine that could not be stopped and earned the company a significant premium over price/earnings multiples in the broad stock market.As a result, over two decades, GE had generated a compound annual total return to shareholders of more than 23% per annum through the 1980s and 1990s. (See Exhibit 3 for summary GE financials, 1981–2000. ) But Immelt was very conscious that he could not hope to replicate that performance by simply continuing the same strategy. â€Å"I looked at the world post-9/11 and rea lized that over the next 10 or 20 years, there was not going to be much tailwind,† he said. â€Å"It would be more driven by innovation, and a premium would be placed on companies that could generate their own growth. 3 rP os t GE’s Growth Strategy: The Immelt Initiative 306-087 †¢ Technical leadership: Believing that technology had been at GE’s core since the day Thomas Edison founded the company, Immelt committed to technical leadership as a key driver of future growth. †¢ Services acceleration: By building service businesses on its massive installed base of aircraft engines, power turbines, locomotives, medical devices, and other hardware, Immelt believed GE could better serve customers while generating high margins and raising entry barriers.Commercial excellence: Reflecting his own sales and marketing background, Immelt committed to creating a world-class commercial culture to overlay the engineering bias and financial orientation of GE’s d ominant business approach under Welch. †¢ †¢ †¢ Growth platforms: Finally, he recognized that significant resource reallocation would be necessary to build new business platforms capitalizing on â€Å"unstoppable trends† that would provide growth into the future.Because plans at GE always came with measurable goals attached, Immelt committed to increasing the company’s organic growth from its historical 5% annual rate to 8% and, beginning in 2005, to generating consistent double-digit earnings growth. Investing through the Down Cycle Do No Within weeks of taking charge, he started making significant investments to align GE’s businesses for growth. Seeing opportunities to expand its NBC broadcast business to capture the fast-growing Hispanic advertising market, for example, the company acquired the Telemundo and Bravo networks.And its power-generation business acquired Enron’s wind energy business as a new platform that management felt was p ositioned for long-term growth and high returns in the future. In addition to these and other natural business extensions, management identified whole new segments that provided a stronger foundation for innovation and where future market opportunities would drive rapid growth. For example, in security systems, GE acquired Interlogix, a medium-sized player with excellent technology, and in water services, it bought BetzDearborn, a leading company with 2,000 sales engineers on the ground.Internally, Immelt also lost little time in making big financial commitments to the growth strategy. Within his first six months, he committed $100 million to upgrade GE’s major research and development (R&D) facility at Nishayuna in upstate New York. In addition to building new laboratories, the investment provided for new meeting centers on Nishayuna’s 525-acre campus, creating an environment where business managers and technologists could meet to discuss priorities. 3 This document i s authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. du or 617. 783. 7860. tC Perhaps predictably, the press was skeptical of the notion that a $130 billion company could grow at two to three times the global gross national product (GNP) rate. Still, there was no shortage of advice for the new CEO in his attempt to make the company do so. Some suggested he should sell off the mature lighting and appliances businesses. 5 Others proposed bold expansions—into the hospital business, for example. 6 And as always, there were calls for GE to break up the company and sell off its component businesses. 7 But Immelt insisted GE had great businesses that provided a strong foundation for the future.All he planned to do was rebalance and renew the portfolio, then drive growth from the revitalized base. op yo Globalization: Building on an old Welch initiative, Immelt committed to expanding GEâ₠¬â„¢s sourcing strategy and market access worldwide, in particular focusing on its underexploited opportunities in developing world countries such as China and India. rP os t 306-087 GE’s Growth Strategy: The Immelt Initiative Scott Donnelly, a 40-year-old researcher who led GE’s overall R&D activity, said, â€Å"GE is not the place for scientists who want to work on a concept for years without anybody bothering them.Here scientists can do long-term research, but they have to be willing to spar with the marketing guys. This is the best of both worlds. †8 Beyond its historic Nishayuna R&D facility, in 2000 the company had established a center in Bangalore, India. To build on that global expansion, in 2002 Immelt authorized the construction of a new facility in Shanghai, China. And as the year wore on, he began talking about adding a fourth global facility, probably in Europe. a Despite the slowing economy, he upped the R&D budget from $286 million in 2000 to $327 million in 2002.When asked about this increase in spending during such a difficult time for the company, he said, â€Å"Organic growth is the driver. Acquisitions are secondary to that—I can’t see us go out and pay a start-up $100 million for technology that, if we had just spent $2 million a year for 10 years, we could’ve done a better job at. I hate that, I just hate that. †10 Reflecting on his extensive investments in 2002, a year in which the stock dropped a further 39% from its 2001 close, Immelt said: Financial strength gives us the ability to invest in growth and we have viewed this economic cycle as a time to invest.We’ve increased the number of engineers, salespeople, and service resources. We will invest more than $3 billion in technology, including major investments in our global resource centers. We’ve strengthened our commitment to China, increasing resources there 25% in 2002, and we’ve increased our presence in Europe. Acquisitions are a key form of investment for us and we have invested nearly $35 billion in acquisitions over the past two years. They are a key way for us to redeploy cash flow for our future growth. 11Ongoing Operations: Rigor and Responsiveness To fund his strategy, Immelt drew his first source of capital from the sale of underperforming businesses, and the company’s struggling insurance business was his prime target for divesture. But in the depths of an economic downturn, getting good prices for any business was not easy. So the investments needed to drive the company’s growth still relied primarily on funds generated by ongoing operations, and Immelt drove the organization to deliver on the market’s expectations for current-year performance.Picking up on initiatives launched years earlier, he harnessed wellembedded capabilities such as Six Sigma and digitization to drive out costs, increase process efficiency, and manage resources more effectively. Do a I n 2003, GE opened its Shanghai research center and broke ground for another center in Siemens’s backyard in Munich, Germany. In 2004, its 2,500 researchers worldwide filed for more than 450 patents. 4 This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. du or 617. 783. 7860. No tC op yo Although Immelt was willing to increase his commitment to R&D, he pushed to change the balance of work being done. In addition to developing technologically sophisticated new products, he wanted to commit more resources to longer-term research that might not pay off for a decade or more. In the past, limited commitment to such long-term research had frustrated many of the center’s science and engineering Ph. Ds. (â€Å"Science was a dirty word for a while,† said Anil Duggal, a project leader on the advanced lighting project. â€Å"Now it’s not. )9 In selecting the long-term projects for funding, Donnelly whittled down more than 2,000 proposals and then worked with researchers to come up with the technologies that could transform a business. From the 20 big ideas his staff proposed, Donnelly had them focus on a group of five, representing fields as diverse as nanotechnology, advanced propulsion, and biotechnology. rP os t GE’s Growth Strategy: The Immelt Initiative 306-087 In this tough environment, Immelt’s primary operating focus was on cash flow, and he realigned all the powerful tools in GE’s toolbox to meet that objective.For example, Six Sigma discipline was applied to reducing the cash tied up in inventory and receivables, while process digitization was focused on sourcing economies and infrastructure efficiencies. By 2002, digitization alone was generating savings of almost $2 billion of savings a year. As always at GE, initiatives were tied to metrics, with 60% of incentive compensation dependent on cash flow gen eration. So, despite a tough 2002 economy that held GE’s revenue growth to 5%, its cash flow from operations was $15. 2 billion, up 10% on the previous year. Do NoThe new CEO also wanted to create a more open and less hard-edged environment within the company. He asked the 2002 class of GE’s Executive Development Course (EDC) to study where GE stood in its approach to corporate responsibility. b Historically, this was not an issue that had received much attention at GE. Although Welch had always emphasized the importance of integrity and compliance, he had shown little interest in reaching beyond that legal requirement. The several dozen participants in the 2002 EDC visited investors, regulators, activists, and 65 companies in the U. S. nd Europe to understand how GE was performing in terms of corporate responsibility. They reported to top management that although the company was ranked in the top five for its financial performance, investment value, and management tal ent, it was number 72 for social responsibility. One outcome of the EDC group’s report was that Immelt appointed GE’s first vice president for corporate citizenship. He tapped Bob Corcoran, a trusted colleague from his days running GE Medical Systems, to lead an effort to ensure that the company was more sensitive and responsive to its broader societal responsibilities.Ever the pragmatist, Immelt saw this as more than just an altruistic response. He believed it was important for the company to remain effective: To be a great company today, you also have to be a good company. The reason people come to work for GE is that they want to be involved in something bigger than themselves. They bEDC was the top-level course at GE’s renowned Crotonville training center and was reserved for those destined for the most senior echelons of management at GE. As part of their studies, each EDC class was assigned a major corporate issue to study in teams and then report back to GE’s Corporate Executive Council. C Immelt understood that in such a skeptical environment, there was a need for a CEO to establish much more openness and trust. Since his natural style tended to be open and communicative, he was perfectly comfortable with the idea of increasing the transparency of GE’s often complex operations. In July 2002, to make the performance of GE’s financial businesses easier to understand, he broke GE Capital into four separate businesses, each with its own balance sheet and explicit growth strategy. He also committed to communicating more frequently and in more detail with investors. We have the goal of talking about GE externally the way we run it internally,† he said. After his first analysts meeting, where everyone got an advance bound copy of the data and forecasts, BusinessWeek commented, â€Å"That’s already a break with the Welch regime where, some say, you were scared to blink in case you missed a chart. †1 4 op yo Although this disciplined approach was reminiscent of GE in decades past, Immelt’s management style contrasted with Welch’s in many ways. First, he recognized that in a post-Enron world, corporate executives faced a more skeptical and often cynical group of critics.For example, an article in BusinessWeek suggested, â€Å"Increasingly, the Welch record of steady double digit growth is looking less like a miracle of brilliant management and more like clever accounting that kept investors fat and happy in boom times. †12 And The Economist opined, â€Å"Immelt has had a torrid time since taking over from Jack Welch, GE’s former boss, in 2001. Waking from the dreamy 1990s, investors discovered that GE was not, after all, a smooth earnings machine that pumped out profit growth of 16 to 18% a year. †13 This document is authorized for use only by DINDIN SYARIFUDIN until August 2009.Copying or posting is an infringement of copyright. [email  prote cted] harvard. edu or 617. 783. 7860. rP os t 5 306-087 GE’s Growth Strategy: The Immelt Initiative want to work hard, they want to get promoted, they want stock options. But they also want to work for a company that makes a difference, a company that’s doing great things in the world. . . . It’s up to us to use our platform to be a good citizen. Because not only is it a nice thing to do, it’s a business imperative. 15 Rebuilding the Foundation: Beginning a Marathon In the midst of the turmoil, however, he reminded himself of advice he received from his predecessor. One of the things Jack said early on that I think is totally right is: It’s a marathon, it’s not a sprint,† Immelt recalled. â€Å"You have to have a plan, and you have to stick with it. You have to modify it at times, but every day you’ve got to get out there and play it hard. †17 Entering 2003 with that thought in mind, Immelt continued to drive his growth-s trategy agenda. Rebalancing the Portfolio Do Two days after announcing final terms in its purchase of Vivendi-Universal Entertainment (VUE), GE announced an agreement to purchase Amersham, a British life sciences and medical diagnostic company that Immelt had been pursuing for many months.He believed that health care was moving into an era of biotechnology, advanced diagnostics, and targeted therapies and combining GE’s imaging technology with Amersham’s pharmaceutical biomarkers, for example, could create whole new ways of diagnosing and treating diseases. At $10 billion, this was a more expensive acquisition but one that he believed could boost GE’s $9 billion medical products business to a $15 billion business by 2005. More important, he saw it as an engine of growth that would continue for years and even decades into the future. In his mind, it was a classic â€Å"growth platform. † This document is authorized for use only by DINDIN SYARIFUDIN until A ugust 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. No Immelt’s vision was to create a media business that was better positioned for a digital future. The NBC franchise, although strong, was being buffeted by changes in media distribution that saw the share of broadcast television’s market shrinking. Universal added content, production facilities, cable distribution, and a strong management team—all assets that Immelt felt could greatly strengthen GE’s core business.On top of that, the $5. 5 billion up-front purchase price for assets valued at $14 billion was seen as an excellent buy. tC The year turned out to be an important one in the new CEO’s efforts to rebuild the business portfolio on which he would drive GE’s growth. Even after completing $35 billion worth of acquisitions in the previous two years, 2003 became the biggest acquisition year in GE’s history with tota l commitments exceeding $30 billion. The first megadeal came when the company decided to bid for the Universal entertainment business of French conglomerate Vivendi.Defying those who suggested that GE should exit the volatile media business, Immelt pushed ahead with the acquisition, which included Universal’s film library, film studio, cable services, and theme park. â€Å"This is about stuff we know how to do,† he said. â€Å"We understand the nuances of this industry and where it’s going. †18 op yo As 2003 began, Immelt was not sorry to see the end of his first full year as CEO. Despite all his efforts, 2002 had been a terrible year for the company. Revenues were up only 5% after a 3% decline the prior year.And rather than the double-digit growth he had promised, 2002 earnings increased by only 7%. By year’s end the stock was at $24, down 39% from the year before and 60% from its all-time high of $60 in August 2000. Having lived through a struggl ing economy, the post-9/11 chaos, new regulatory demands following the corporate scandals, and an unstable global political situation, Immelt commented, â€Å"This was a not a great year to be a rookie CEO. †16 rP os t GE’s Growth Strategy: The Immelt Initiative 306-087The real issue that many saw in the deal, however, was less about strategic fit than organizational compatibility. The concern was that the highly innovative, science-oriented talent that Amersham had developed in the U. K. would not thrive when swallowed up by GE. It was the same criticism that Immelt had heard when critics wondered whether the creative talent in Universal’s film studios would tolerate the management discipline for which GE was so well-known. But the idea of bringing creative and innovative outsiders into GE was part of the appeal to Immelt.He saw people like Sir William Castell, Amersham’s CEO, as major assets who could help develop in GE the culture of innovation that he longed to build. To emphasize the point, he put U. K. -based Castell in charge of the combined $14 billion business renamed GE Health Care and made him a vice chairman of GE. For the first time, one of the company’s major businesses would be headquartered outside of the United States, a move that Immelt felt fit well with his thrust of globalization. Focusing on Customers, Emphasizing Services Do NoIn addition to his portfolio changes, the new CEO kept working on his internal growth initiatives. As an ex-salesman, Immelt had always directed attention toward the customer, and one of his priorities was to redirect GE’s somewhat internal focus—an unintended by-product of Welch’s obsession with operating efficiency and cost-cutting—toward the external environment. â€Å"In a deflationary world, you could get margin by working productivity,† he said. â€Å"Now you need marketing to get a price. †19 In 2001, among his first appointments ha d been Beth Comstock, named as GE’s first chief marketing officer.Next, to drive the change deeper, he redeployed most of GE’s extensive business development staff into marketing roles, then asked each of GE’s businesses to appoint a VP-level marketing head, many of whom had to be recruited from the outside. â€Å"We hired literally thousands of marketers,† he said. â€Å"For the best, we created the Experienced Commercial Leadership Program, the kind of intensive course we’ve long offered in finance. That’s 200 people a year, every year. †20 cAfter taking a $1. 4 billion write-off in 2004 due to claims relating to asbestos and September 11, the company finally sold ERC for $8. billion in 2005, but only after booking another $2. 9 billion insurance loss. tC To communicate the major portfolio transformation he had undertaken to date, in 2003 Immelt began describing GE’s businesses as â€Å"growth engines† and â€Å"cash generators† (see Exhibit 4). He characterized the former, which accounted for 85% of earnings, as market leaders that could grow at 15% annually through the business cycles with high returns. The latter were acknowledged as being more cyclical in nature but with consistently strong cash flows. p yo The other great challenge in the ongoing task of portfolio rebalancing was that GE was finding it difficult to dispose of some of the assets it no longer regarded as vital. While the recession provided lots of buying opportunities if one was willing to step up and invest, it was hardly an ideal environment in which to be selling businesses. For GE, the biggest challenge was to find buyers for the struggling insurance businesses. Although its 2003 sale of three of its major insurance entities had freed up $4. billion in cash, the company was still trying to find a buyer for Employers Reinsurance Company (ERC), a business generating huge ongoing losses due to its poor underwriting in the late 1990s. c And several other GE businesses from motors to super adhesives remained on the blocks with no bidder offering a price the company was willing to accept. Part of the problem was that bidders felt that if GE had run the business for years, most of the potential savings had already been extracted, making the units being offered less attractive for a company that wanted to squeeze out costs.This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. rP os t 7 306-087 GE’s Growth Strategy: The Immelt Initiative In 2003, with strong marketing capabilities now embedded in the businesses, he formed a Commercial Council to bring GE’s best sales and marketing leaders together in a forum that could transfer best practice, drive initiatives rapidly through the organization, and develop a world-class commercial culture.Chaired by Immelt per sonally, the council’s agenda included developing worldclass marketing capabilities, taking Six Sigma to customers, and driving sales force effectiveness. As always, metrics were attached. Using a tool called Net Promoter Score (NPS), the company began to track changes in customer attitudes and loyalty, tying compensation to improvements in NPS scores. â€Å"If we can create a sales and marketing function that’s as good as finance at GE, I’ll change this company,† he said. â€Å"But it will take ten years to drive these changes. †21 Yet despite all these efforts, the reality was that just as many of GE’s roducts were becoming commodities, its service contracts were increasingly going to the lowest bidder and not providing the barriers to entry they once did. GE’s solution was to make itself indispensable by building enduring relationships based not only on offering its products and services but also its expertise. One initiative, dubb ed â€Å"At the Customer, For the Customer† (ACFC, as it soon became known), was designed to bring GE’s most effective internal tools and practices to bear on its customers’ challenges. Immelt used health care as an example of what GE could offer.With cost control being a major concern as health-care expenditures headed toward 20% of GDP, Immelt felt that GE could help its customers, only 50% of which were profitable. â€Å"Through our health care services agreements, we are the hospitals’ productivity partner,† he said. â€Å"We completed more than 6,000 Six Sigma projects with health care providers in 2002 and these projects are improving the quality of patient care and lowering costs. †22 In addition, the company began bundling its services and linking its products to clinical information technology.It also added a health-care financial services business to the GE Health Care organization to provide it with specialized financing support. â€Å"The phrase ‘solutions provider’ is so overused it makes us all snore,† said Immelt. â€Å"I want GE to be essential to those whom we serve, a critical part of the profit equation, a long-term partner, a friend. †23 Driving for Growth: New Platforms, New Processes Beginning in 2002, Immelt had challenged his business leaders to identify growth business platforms with the potential to generate $1 billion in operating profit within the next few years.In response, six opportunities had emerged: health-care information systems, security and sensors, water technology and services, oil and gas technology, Hispanic broadcasting, and consumer finance. By the end of 2002, these businesses represented $9 billion in revenue and $2 billion in operating profit. But, as Immelt pointed out, at a 15% annual organic growth rate, they were on track to become a much larger portion of GE’s future business portfolio. With 2003’s major acquisitions such as Am ersham and VUE, the company added new growth platforms such as biosciences and film/DVD to its list.Through other acquisitions, renewable energy Do 8 This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. No tC op yo Immelt also believed GE could significantly strengthen its customer relationships by becoming more of a services provider. In 2002, $23 billion of the company’s $132 billion revenue came from services, but with its massive installed base of more than 100,000 long-lived jet engines, locomotives, power generators, and medical devices in the field, the CEO saw the potential service annuity stream.As someone who had increased GE Medical Systems’ share of service business from 25% to 42% in the three and a half years he headed that operation, Immelt was convinced that services could grow much faster than hardware and at much higher profit levels. To underscore his belief, whenever businesses developed important service contracts—GE Transportation’s sale of its IT-based dispatch system to railroad customers to increase locomotive utilization, for example—he celebrated them very publicly. rP os t GE’s Growth Strategy: The Immelt Initiative 06-087 (wind, solar, biomass), coal gasification, and supply chain financing became elements of GE’s new growth platform. And the emphasis on services built a series of businesses in environmental services, nondestructive testing, and asset optimization that were also seen as having high growth potential. In defining and then building these growth platforms, GE followed its normal disciplined approach. First, management segmented the broad markets and identified the high-growth segments where they believed they could add value.Then, they typically launched their initiative with a small acquisition in that growth platform. After integrating it into GE, the objective was to transform the acquisition’s business model by applying GE growth initiatives (services and globalization, for example) that could leverage its existing resources and capabilities. As a final step, the company applied its financial muscle to the new business, allowing it to invest in organic growth or further acquisitions. The objective was to grow it rapidly while simultaneously generating solid returns.As Immelt summarized, â€Å"A key GE strength is our ability to conceptualize the future, to identify unstoppable trends, and to develop new ways to grow. The growth platforms we have identified are markets that have above average growth rates and can uniquely benefit from GE’s capabilities. . . . Growth is the initiative, the core competency that we are building in GE. †24 Aligning Management: New People Profiles The biggest challenge Immelt saw in implementing his agenda was to make growth the personal mission of every one of the company’s 310,000 employees worldwide. If I want people to take more risks, solve bigger problems, and grow the business in a way that’s never been done before, I have to make it personal,† he said. â€Å"So I tell people, ‘Start your career tomorrow. If you had a bad year, learn from it and do better. If you had a good year, I’ve already forgotten about it. ’†25 As the company began to implement its new growth strategy, the CEO worried that some of his current management team might not have the skills or abilities to succeed in the more entrepreneurial risk-taking environment he was trying to create.Realizing that this implied a massive challenge to develop a new generation of what he termed â€Å"growth leaders,† he said: Historically, we have been known as a company that developed professional managers . . . broad problem solvers with experience in multiple businesses and functions. However, I wanted to raise a generation of g rowth leaders—people with market depth, customer touch, and technical understanding. This change emphasizes depth. We are expecting people to spend more time in a business or a job.We think this will help leaders develop â€Å"market instincts† so important for growth, and the confidence to grow global businesses. 26 Do No Beyond changes in career path development that emphasized more in-depth experience and fewer job rotations, GE’s HR professionals wanted to identify the new personal competencies that growth leaders would need to exhibit. Benchmarking GE against best practice, they researched the leadership tC op yo GE’s expansion into Hispanic broadcasting provides an example of the process.After identifying this as a fast-growth segment in its broadcast business, the company acquired Telemundo, the number two player in the Hispanic entertainment segment. Believing that the Hispanic demographic would drive growth, management felt that it would be able to apply GE’s capabilities to fix Telemundo’s struggling business model. Through 2002 and 2003, NBC offered its management and programming expertise, helping Telemundo to evolve from purchasing 80% of its content to producing two-thirds of its own broadcast material.In the second half of 2003, Telemundo grew its ratings by 50% over the first half and captured 25% of the Hispanic advertising market. The company expected revenues to grow more than 20% in 2004. This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. rP os t 9 306-087 GE’s Growth Strategy: The Immelt Initiative profiles at 15 large global companies —Toyota and Dell among them—that had grown for more than a decade at three times GDP rates or better.In late 2004, they arrived at a list of five action-oriented leadership traits they would require: an external f ocus that defines success in market terms; an ability to think clearly to simplify strategy into specific actions, make decisions, and communicate priorities; the imagination and courage to take risks on people and ideas; an ability to energize teams through inclusiveness and connection with people, building both loyalty and commitment; and an expertise in a function or domain, using depth as a source of confidence to drive change.To help develop these characteristics, each business created 20 to 30 â€Å"pillar jobs†: customer-facing, change-oriented assignments in which growth leaders could be developed in assignments of at least four to five years. The new leadership competencies also became the criteria for all internal training programs and were integrated into the evaluation processes used in all management feedback. Funding the Growth: Operating Excellence Do Yet another operating initiative called â€Å"simplification† aimed at reducing overhead from 11% of rev enue to 8%.Targeting reductions in the number of legal entities, headquarters, â€Å"rooftops,† computer systems, and other overhead-type costs not directly linked to growth, the company set a goal of removing $3 billion of such costs over three years. In the first year, the commercial finance business consolidated into three customer service/operations centers and expected to save $300 million over three years. In another simplification move, the consumer and industrial business brought its three existing headquarters into one, saving more than $100 million in structural costs.And the transportation and energy businesses began sharing some IT and operational assets that also reduced structural costs by some $300 million annually. 10 This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. No By 2004, while the drives for cash generation and cost re duction were still in place, Immelt added a new initiative called Lean Six Sigma, which borrowed the classic tools of lean manufacturing and set them to new applications.In its industrial businesses, the focus was on reducing working capital and improving return on equity, while in its commercial finance business it was on margin expansion, risk management, and cost reduction. Through these efforts, in 2003–2004, the company achieved $2. 7 billion in improvement in working capital and expected that kind of progress to continue. tC While driving growth, Immelt never forgot that he inherited a great operating company. He did not want long-term growth to distract managers from current performance. I’ve always worried about a jailbreak,† he said. â€Å"How do we make sure people don’t say ‘Jeff doesn’t care about productivity’? †29 So he insisted that innovation be â€Å"funded with an intent to lead, but paid for by increasing prod uctivity. †30 During 2003, for example, about one-third of the Six Sigma specialists were focused on a new initiative called â€Å"cash entitlement. † The target was for GE to be twice as good as competitors on a number of benchmarks such as accounts receivable or inventory turnover. At ull potential, Immelt told his team, it would free up an additional $7 billion in cash. op yo Immelt was also quite involved personally in developing growth leaders on his team. In response to a question about his time utilization, he said, â€Å"I’m probably spending 20% of my time with customers, 30% of my time on people, teaching and coaching . . . [and] 10% of my time on governance, working with the board, and meeting with investors. The rest would be time spent on the plumbing of the company, working on operating reviews and strategy sessions. 27 But, as he regularly pointed out, the time he spent on the â€Å"plumbing† in operating reviews and strategy sessionsâ€⠀Ã¢â‚¬Å"touch points,† he called them—was primarily about people development. He was committed to make â€Å"every moment a learning opportunity, every activity a source of evaluation. †28 rP os t GE’s Growth Strategy: The Immelt Initiative 306-087 Preparing for Liftoff: Innovation and Internationalization As 2004 progressed, the worldwide economy gradually started to turn around, and GE began showing signs of more robust growth. By year’s end, nine of its 11 businesses had grown their earnings by double digits.For the first time, Immelt sounded confident that the company was finally moving beyond the disappointing results of the previous three years and onto the growth trajectory for which he had been preparing it. In his annual letter to stakeholders in February 2005, he recalled his time as a college football player to draw a sports analogy to GE’s recent performance: GE has â€Å"played hurt† for the last few years. . . . So we we nt to the â€Å"training room. † These difficult years triggered a critical review of our capabilities, and as a result, we initiated an exciting transformation.We invested more than $60 billion to create a faster-growing company. We committed to divest $15 billion of slow-growth assets. We built new capabilities, launched new products, expanded globally and invested in the GE brand. Now the company has begun an era of strong performance. . . . We’re back at full strength. This is our time. 31 To underscore the point, he predicted that GE’s â€Å"growth engines†Ã¢â‚¬â€businesses whose earnings growth since 1999 had averaged 15% annually—would generate 90% of the company’s earnings in 2005, compared with only 67% in 2000. See Exhibit 5 for a representation of the shift. ) Due to this transformation of the business portfolio and also the addition of more than a dozen new capabilities from biosciences to renewable energy, Immelt claimed that f or the first time in 20 years, GE was positioned to grow its industrial earnings faster than its financial services earnings. Imagination Breakthroughs Do No To drive his earlier growth platform challenge deep into the organization, the CEO launched a process he called â€Å"imagination breakthroughs,† quickly abbreviated to IBs.These were projects— technological innovations, market expansion opportunities, product commercialization proposals, or ideas to create value for customers—that had the potential to generate, over a three-year horizon, at least $100 million in incremental earnings. The process required each business leader to submit at least three breakthrough proposals a year for review by the Commercial Council. â€Å"Imagination Breakthroughs are a protected class of ideas—safe from budget slashers because I’ve blessed each one,† said Immelt. â€Å"What we’re trying to do is take risks, using my point of view.I have the bi ggest risk profile and broadest time horizon in the company . . . so I can bring to bear the right risk-taking and time horizon tradeoffs. †32 A year into the program, 80 IB initiatives had been identified and qualified—half technically based programs and half commercial innovations. Immelt had assigned the company’s best people to drive them and had committed $5 billion over the next three years to fully fund them. In that time, they were expected to deliver $25 billion of additional revenue growth. By 2005, 25 IBs were generating revenue. The big difference is that the business leaders have no choices here,† Immelt explained. â€Å"Nobody is allowed not to play. Nobody can say, ‘I’m going to sit this one out. ’ That’s the way you drive change. †33 Believing that the businesses could initiate 200 such projects over the next year or two, Immelt said, â€Å"Our employees want to live their dreams. It is up to me to give the m that platform. I can help them take smart risks that will win over time. . . . We aim to be the best in the world at turning small ideas into huge businesses. †34 tC op yoThis document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. rP os t 11 306-087 GE’s Growth Strategy: The Immelt Initiative Of Town Halls and Dreaming To stimulate ideas that would drive the imagination breakthroughs, Immelt continued to push his leaders to get out in the field and in touch with the market. Setting the example himself by spending at least five days a month with customers, he began creating forums he called â€Å"town hall meetings. Here, several hundred customers would gather together to hear where GE’s CEO wanted to take his company, to provide input on that direction, and to suggest how GE could be more helpful to them. For example, in one meeting wit h the CEOs and key operating managers of companies in the railroad industry, Immelt spent an afternoon listening to their view of their industry situation, the key trends, and its five- to 10-year outlook. GE’s CEO then asked them to think through a number of scenarios including higher fuel prices, a growth in east-west rail shipments due to increasing Chinese imports, and so on.He then challenged them to think through how they would spend $200 million to $400 million on R&D at GE. The ensuing debate highlighted, for example, the relative importance of spending on fuel efficiency versus information technology to optimize rail movement planning. But Immelt was careful to note that while the company listened carefully to the input, GE always made its own choices on these investments. â€Å"I love customers. I get great insight from them, but I would never let them set our strategy for us,† he said. â€Å"But by talking to them, I can put it in my own language.Customers always pay our bills, but they will never pick our people or set our strategies. †36 Infrastructure for Developing Countries: A New Growth Market In 2004, Immelt’s push for globalization also began bearing fruit with revenues from outside the U. S. growing 18% to $72 billion. Of this, the developing world accounted for $21 billion, an even more impressive 37% increase on the previous year, leading Immelt to predict that over the next decade, 60% of GE’s international growth would come from developing countries.China represented the most visible growth opportunity, but he also planned to expand aggressively into India, Russia, Eastern Europe, Southeast Asia, the Middle East, and South America. Through the imagination breakthrough program, proposals for improving GE’s ways of doing business in the developing world began bubbling up. For example, one plan that would quickly generate $100 million in sales involved shipping unassembled locomotives to Russia, In dia, and China, where they would be assembled in local factories and workshops. Furthermore, through an initiative known as â€Å"one GE,† the ompany began creating vertical teams to deliver what it called enterprise selling. For example, companywide enterprise teams had targeted the Olympics in Beijing, Vancouver, and London and were aiming to deliver additional sales of $1 billion in energy, security, lighting, and health-care products to those venues. And increasingly GE was adopting â€Å"company-to-country relationships† in selling infrastructure projects. It was an approach that had helped it book $8 billion in Middle East orders in 2005, twice the level of 2003. Do 12This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. No tC op yo As an outgrowth of these meetings, Immelt decided to create another forum that he described as â€Å" dreaming sessions. † In these sessions, he engaged in intensive conversations with a group of senior executives drawn from key customers in a particular industry to try to identify major industry trends, their likely implications for them, and how GE might be able to help them.Immelt understood the importance of his own role in these meetings. â€Å"If I show up, we’ll get six CEOs to show up,† he said. â€Å"So you don’t have to cut through anything else if we all do it together. We can make some high-level tradeoffs that way. †35 rP os t GE’s Growth Strategy: The Immelt Initiative 306-087 Reorganizing for Efficiency—and Growth Driven by such developments, in July 2005, Immelt announced a major reorganization that consolidated GE’s 11 businesses into six large units, one of which was GE Infrastructure.Integrating aircraft engines, rail products, water energy, oil and gas, and some financial services, the unit was headed by GE v eteran David Calhoun, who aimed to offer one-stop shopping for all infrastructure products and services. Immelt’s expectation was that by focusing on the needs of an underserved customer group—the governments of developing countries—GE could tap into investments in developing country infrastructure predicted to be $3 trillion over the next 10 years. Going Forward: Immelt’s Challenges His main challenge now as he saw it was to maintain the growth in this $150 billion global giant.But to those who felt GE was too big to grow so fast, he had a clear response: Do No The corporate landscape is littered with companies that allowed themselves to be trapped by size. But GE thrives because we use our size to help us grow. Our depth allows us to lead in big markets by providing unmatched solutions for our customers; our breadth allows us to spread concepts across the company, leveraging one small idea to create big financial gains; and our strength allows us to tak e the risks required to grow. . . Our goal is not just to be big, but to use our size to be great. 38 All he had to do now was convince the financial markets that the changes he had initiated would enable this global giant to deliver on his promise of continued double-digit growth. tC In 2006, Immelt felt that GE was well placed on the growth path he had laid out over four years earlier. Between 2002 and 2005, he had put $30 billion of divestitures on the block, completed $65 billion in acquisitions, and made major investments in new capabilities in technology, marketing, and innovation.He now represented GE’s growth engine as a linked six-part process (see Exhibit 6). While the components varied little from his original 2001 list of growth elements, he explained the difference: â€Å"You’ve got to have a process. Investors have to see it is repeatable. . . . It took time, though, to understand growth as a process. If I had worked out that wheel-shaped diagram in 2001 , I would have started with it. But in reality, you get these things by wallowing in them awhile. †37 op yoWhile one objective of the reorganization was to create savings (expected to be $400 million in administrative costs alone), Immelt emphasized that a more important goal was to better align the businesses with customer and market needs. But he also made clear that he wanted to create an organization that gave more opportunity for younger growth leaders to drive their businesses. The six new macrobusiness groups—GE Industrial, GE Commercial Financial Services, NBC Universal, GE Health Care, GE Consumer Finance, and GE Infrastructure—would each be led by one of GE’s most experienced top executives.But these individuals would be forced to step back more from operations and spend most of their time coaching, developing, and supporting the younger managers who were to be pulled up into the 50-odd profit-responsible units directly under them. It was all par t of the company’s commitment to developing its growth leaders and the businesses they ran. This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. rP os t 13 306-087 -14-Exhibit 1 GE’s Performance, 2001–2005: Selected Financial Data General Electric Company and Consolidated Affiliates (in millions, per share amounts in dollars) Do 2003 $112,886 13,766 2,057 15,823 -587 15,236 7,759 19. 60% 2002 $113,856 15,798 -616 15,182 -1,015 14,167 7,266 27. 20% 2001 $107,558 12,948 1,130 14,078 -287 13,791 6,555 24. 70% $ 1. 37 0. 2 1. 57 -0. 06 1. 51 1. 37 0. 21 1. 58 -0. 06 1. 52 0. 77 32. 42–21. 30 30. 98 503,610 647,828 170,309 10,018,587 670,000 $ 1. 58 -0. 06 1. 51 -0. 1 1. 41 1. 59 -0. 06 1. 52 -0. 1 1. 42 0. 73 41. 84–21. 40 24. 5 441,768 575,236 138,570 9,947,113 655,000 $ 1. 29 0. 11 1. 4 -0. 03 1. 37 1. 3 0. 11 1. 42 -0. 03 1. 39 0. 66 52. 90–28. 25 40. 08 373,550 495,012 77,818 9,932,245 625,000 No 2005 $149,702 18,275 -1,922 16,353 — 16,353 9,647 17. 60% 2004 $134,481 16,285 534 16,819 — 16,819 8,594 17. 60% tC 1. 73 -0. 18 1. 55 — 1. 55 0. 91 37. 34–32. 67 35. 05 626,586 673,342 212,281 10,569,805 634,000 161,000 155,000 316,000 This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860.Selected Financial Data Revenues Earnings from continuing operations before accounting changes Earnings (loss) from discontinued operations, net of taxes Earnings before accounting changes Cumulative effect of accounting changes Net earnings Dividends declared Return on average shareowners' equity (a) Per share Earnings from continuing operations before accounting changes— diluted Earnings (loss) from discontinued operations—diluted Earnings before accounting changes—diluted Cumulative effect of accounting changes—diluted Net earnings—diluted Earnings from continuing operations before accounting changes— basic Earnings (loss) from discontinued operations—basic Earnings before accounting changes—basic Cumulative effect of accounting changes—basic Net earnings—basic Dividends declared Stock price range Year-end closing stock price Total assets of continuing operations Total assets Long-term borrowings Shares outstanding—average (in thousands) Shareowner accounts—average Employees at year-end United States Other Countries Total Employees op yo 1. 72 -0. 18 1. 54 — 1. 54 $ 1. 56 0. 05 1. 61 — 1. 61 1. 57 0. 05 1. 62 — 1. 62 0. 82 37. 75–28. 88 36. 5 618,241 750,507 207,871 10,399,629 658,000 165,000 142,000 307,000 155,000 150,000 305,000 $ 161,000 154,000 315,000 158,000 152,000 310,000 Source: GE 2005 Annual Report. rP os t GE’s Growth Strategy: The Immelt Initiative 306-087 Exhibit 2GE Stock Price and P/E Multiple vs. S 500 Performance, 1995–2005 GE Price & P/E vs. S 500 1995-2006 (indexed 1/1995=100) 700 GE Price & S 500 (indexed 1/95=100) 600 500 400 300 200 100 0 97 96 95 Ja nJa nJa n- GE P/E S 500 GE Price op yo 99 00 01 02 Ja nJa n03 Ja nJa nJa n- 30 20 10 0 04 05 Ja nJa n06 Ja n- 98 Source: Thomson Datastream International. Do No tC Ja n- GE P/E (%) This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. rP os t 60 50 40 15 306-087 -16- Exhibit 3 GE Financial Performance, 1981–2000 ($ millions) Do 000 1999 1998 1997 1996 1991 1986 1981 $129,853 10,717 -9,296 4,081 25. 7% 25. 0% 24. 0% 3,535 3,138 1,808 12. 2% 8,203 7,280 2,636 –492 9,296 8,203 7,280 3,943 $111,630 $100,469 $90,840 $79,179 $51,283 $36,725 3,689 N/A 2,492 1,081 17. 3% $27,240 N/A N/A 1,652 715 19. 1% 12,735 –10,717 General Electric Company & Consolidated Affiliates Revenues Earnings from continuing operations Loss from discontinued operations 12,735 4,786 Net earnings 5,647 26. 8% Dividends declared 27. 5% No 3. 87 3. 81 1. 71 1. 47 159. 5-94. 3 405,200 71,427 3,277,826 3,268,998 3,274,692 59,663 46,603 355,935 304,012 103. 9-69. 0 76. 6-47. 9 1. 25 1. 08 0. 95 3. 21 2. 80 2. 46 2. 16 3. 27 2. 84 2. 50 2. 20 2. 55 1. 51 1. 04 78. 1-53. 272,402 49,246 3,307,394 166,508 22,602 1,737,863 2. 73 N/A 1. 18 44. 4-33. 2 84,818 100,001 912,594 Earned on average shareowners’ equity Per share: Net earnings N/A N/A N/A 69. 9-51. 1 20,942 1,059 227,528 Net earnings—diluted tC 53. 1-34. 7 167,000 143,000 -310,000 293,000 -130,000 163,000 165,000 155,000 111,000 173,000 84,000 -62,000 -276,000 49,000 Dividends declared 181. 5-125. 0 437,006 82,132 3,299,037 Stock price rangea Total assets of continuing operations Long-term borrowings Shares outsta nding—average (in thousands) Employees at year-end: 168,000 145,000 -313,000 United States 302,000 N/A 71,000 N/A N/A N/A 239,000 284,000 373,000 404,000Other countries Discontinued operations (primarily U. S. ) Total employees op yo Source: GE annual reports, various years. This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. aPrice unadjusted for four 2-for-1 stock splits during the period. rP os t 306-087 -17- Exhibit 4 Do No tC op yo GE Portfolio: Growth Engines and Cash Generators This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860.As of January 1, 2004, GE has reorganized its 13 businesses into 11 focused on markets and customers—seven Growth Engines, which generate about 85% of earnings and are market leaders with strengths in technology, cost, services, global distribution and capital efficiency; and four Cash Generators, which consistently generate strong cash flow and grow earnings in an expanding economy. This chart reflects the most significant changes: the combination of Aircraft Engines and Rail into GE Transportation; the combination of Industrial Systems and Consumer Products into Consumer & Industrial, with portions of Industrial Systems moving to other businesses; and the formation of Infrastructure from portions of Industrial Systems and Specialty Materials. Results for 2003 in this annual report are reported on the 13-business basis in effect in 2003. P os t Source: GE 2003 Annual Report, p. 6. 306-087 GE’s Growth Strategy: The Immelt Initiative Exhibit 5 GE’s Representation of its Portfolio Transformation, 2000–2006 Portfolio Transformation GE has added more than a dozen new capabilities to its seven Growth Engines, which should generate approx imately 90% of GE’s earnings in 2005, substantially more than five years ago. The Growth Engines—Transportation, Energy, Healthcare, NBC Universal, Infrastructure, Commercial Finance and Consumer Finance—are robust, capital-effective businesses with leadership positions for sustained doubledigit earnings and cash flow growth. New Growth CapabilitiesBiosciences Film + DVD Healthcare Information Technology Renewable Energy (Wind, Solar, Biomass) Coal Gasification Water Security Hispanic Television Oil & Gas Exploration Technology Services (Asset Optimization, Environmental Services, Non-Destructive Testing) â€Å"Vertical† Financing Full Supply-Chain Financing Real Estate Operations Global Mortgage Source: GE 2004 Annual Report, p. 4. Do 18 This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. No tC op yo rP os t GE’s Gr owth Strategy: The Immelt Initiative 306-087 Exhibit 6 GE Growth Strategy: Core Elements, 2005 Version Customer ValueUse our process excellence to create customer value and drive growth Growth Leaders Inspire and develop people who know how to help customers and GE grow Globalization tC Create opportunities everywhere and expand in developing markets Do No Source: ———————————————————————————————————————————————-GROWTH IS THE GE INITIATIVE After growing historically at an average of 5% revenue growth, in 2004, we launched this initiative to achieve 8% organic growth per year. This is about twice the rate of our industrial and financial peers. We want to make or ganic growth a process that is predictable and reliable. ———————————————————————————————————————————————- GE 2005 Annual Report. op yo Execute for Growth Commercial Excellence Create a world-class marketing and sales capability to drive â€Å"one GE† in the marketplace This document is authorized for use only by DINDIN SYARIFUDIN until August 2009. Copying or posting is an infringement of copyright. [email  protected] harvard. edu or 617. 783. 7860. rP os t Innovation Generate new ideas and develop capabilities to make them a reality Leadership in Technology Have the best products, content and s

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Paper & annotated bibliography - Research Proposal Example I will carry out extensive literary analysis in order to discover the ideas that various authors front in their own discourses. Numerous authors and researchers have investigated the cultural manifestation and impacts of the war in the American society. I will therefore investigate and use three of the most cited works thereby drawing conclusion based on their ideologies of the authors. The three books include In discussing the history of the Vietnam War, Anderson explains the influence that such effects had on the American culture. The author explains the extensive use of radio among other media in enhancing the spread of the culture both in the United States and throughout the world. According to the book, the war led to systematic change of culture as captured by various media. The author draws his references from poetry, films, memoirs and journalism among others at the time. He explains that the works often conveyed three unique thematic features including home, wound and the voice. The three were significant in constructing the post war culture. American became increasingly patriotic with a heightening desire to protect their rights while developing comfortable, safe and secure homes for themselves. This validates the flamboyant experienced at the time as the society became conscious of the effects of war. The book provides an in-depth analysis of the cultural effects of the war and is therefore a vital resource in my research. Just as the title suggests, the encyclopedia provides an in-depth analysis of the cultural effects of the Vietnam War in the United States. As such, the encyclopedia is a phenomenal piece that discusses the importance of the war not only to the American culture but to the global culture as well. The authors assert that the United States is a major economy, one that influences the cultural developments globally. As such, the country enhanced the

Strong Response Essay Example | Topics and Well Written Essays - 750 words

Strong Response - Essay Example e is pointing out a recent victim, The New York University of Art, which lost its rights for uploading any images of their artwork, the reason being the violation of rules and regulations of Facebook. The works included nude images, which is against Facebook policy. The Universitys authority classed this, an unfair action against art; nevertheless, they raised their voice through a blog, complaining about Facebooks rules and regulations. This article was published in The New York Times. The issue being addressed is the problem faced by an institution of art as their work is being deleted and accounts blocked by Facebook as it contains nudity. However, later, the site officials claimed that it was a mistake on their part and they had no intention, whatsoever, of hurting anyones feelings. Moreover, they encouraged people who had lost their work to post it again. Drawing nude live models is considered the most effective way to develop the basic draftsmanship skill of an artist. Hence, it is considered to be the most important part of an artist’s work. Using Facebook as a medium, artists share their work with art lovers all around the globe. Nevertheless, Facebook blocking their work became a deterrent for these artists. Artists have been concerned with the fact that the Facebook officials must have seen that the nude pictures were actual works of art, yet, they decided to block it. The author of this passage seems to blame Facebook for these actions but, in my opinion, if Facebook has some certain terms and conditions then they are free to apply it on all forms of work. Facebook does not allow photos which attack a person or group or images which depict drug use or contain violence or nudity. If Facebook requires its users to follow certain rules and regulations, then we are all required to follow them as responsible individuals. If they say that a photo should not ‘contain’ nudity, then nudity in any form should be banned. Some people are of the view that

Firm Creation Assignment Example | Topics and Well Written Essays - 750 words

Firm Creation - Assignment Example I was also responsible in finding and assembling the present team who like me are averse to working under others. I will be an active partner who will be responsible for marketing and sales of our skills. Brian: Brian will be the core person in the team since he is the only one at present with the technical qualification needed in our business. He is certified by the Professional Aviation Maintenance Association (PAMA) in non-destructive testing of airframes. He is also a qualified Six Sigma specialist in addition to taking a four year course at a business school and two year course in mechanical engineering. He is a willing team player, is very organized and willing to innovate and improve processes. He is also familiar with CAD and other basic computer applications. Shelley: In terms of qualification, Shelley is the odd person out in our team. She is a qualified medical assistant but is willing to take the administrative responsibilities of our firm. She is also a team player and is motivated enough to take on responsibilities. She has basic computer skill and working knowledge certain MS Office applications. Nikki: Nikki is a born leader and will act as the managing partner of our firm. ... Each of these needs to comply with safety regulations formulated by the Federal Aviation Administration and it includes airframe safety also. Accidents and subsequent rescue efforts are also a concern. New digital distress beacons called Emergency Locator Transmitters (ELT) are now available that can locate the name, owner, location and type of aircraft with the help of satellites in case of a crash. But the equipment is costly and owners are reluctant to fit their planes with one. "More than 85% of private planes do not carry the improved beacons even as the government prepares to stop listening Feb. 1 for distress calls from the older, outdated beacons installed on most aircraft." (Levin, 2009). Services provided by SafeAir Consultants: SafeAir Consultancy can provide airworthiness certification with regard to airframes using non-destructive testing methods. Individual owners can be contacted for the purpose of building a client base. SafeAir can act also as a consultant and dealer in motivating owners to use the new ELTs. Their pilots and maintenance staff can also be educated about the usefulness of the ELTs. Skill profiles and suitability for the job: Building a client base can be quite tough for a new business venture. The leadership skills of Nikki and his organizational ability will be very useful in motivating other team members and other marketing staff. His high spiritedness shows an ambitious mind which is essential for any businessman who wants to achieve high growth. Shelley is also a team player and will fit in well as an administrator. She also appears to be an ethical and honest person which is very essential since handling finance is one of her responsibilities. As a family

Preventing Residential Burglaries Essay Example | Topics and Well Written Essays - 500 words

Preventing Residential Burglaries - Essay Example In this regard, the locks should be firmly fixed into the wood and not in the light doorjamb. The home will be more save when the lock bolts and screws are long (Bennett & Durie 1999, p. 124). In addition, a wide-angle peephole should be installed in front of the door. This will allow the owner to peep outside easily without opening the door. The peepholes are less expensive and easy to install. They are also better than the chain latches, which can be easily forced to make it loose. It is imperative that the best locks are worthless if not locked. The doors should be locked even if one is away for minutes. Burglars use the shortest time possible to enter into the house. This is when the residents have gone to the neighbors or mowing the lawn on a quick errand (Gillham, 2011, p. 39). The residents should be aware of their residential areas and even call the police if there is anything suspicious. Police should be alerted where there are people loitering around, strange cars in the compound, and movement inside an empty house. The neighbors are valuable more than police in detecting the strangers who are not residents of the plot, or a certain home. Residents should be witnesses they can be and try to get safe descriptions. Residents should not open doors to people who do not have any business inside. This is because burglars knock the doors to find if there is anyone inside the house. It is important that families discuss their safety especially with their children. In this regard, children should be advised not give any information of whoever is in the house, or even open the doors to strangers. They should ask them to introduce themselves so that they cannot keep away genuine visitors (Gillham, 2011, p. 33). Mark and operation identification should be used to mark items, this will help much as the burglars do not like sticking on marked properties. In addition, inventory on the property should be used to help on

Assignment Essay Example | Topics and Well Written Essays - 2000 words - 14

Assignment - Essay Example This legitimate designation of ownership of property to an individual or firm is essential in that it aids in clearly defining the way that the said property is to be utilized. As such, this makes it easier to utilize a property such that its maximum potential can be realized. Additionally, the convenience that is gained from this legitimate designation is that the possibility for wrangles and constant disagreements over the said property are reduced, and this eventually improves societal cohesion and better mutual existence. Historically, property was basically a term used to define land ownership. This is due to the fact that land was, and still is, one of the most important human resources. However, with the dynamism of the contemporary society, the definition for property has continually evolved. There are numerous changes that cannot be ignored, and this calls for the adoption of various ways to define property in line with the need to adapt to the changes that define the contemporary society. Consequently, this is the perspective from which private property comes in, as it tries to consider the issue of property ownership in light of the dynamics that define the current society. As such, there are various definitions and perspectives from which the issue of property ownership can be viewed, with each perspective offering a completely different insight in light of the numerous facets of the society. In most cases, private property is all about property that is owned by individuals specifically for their own personal use. Under this consideration, the assumption is that private property is distinguishable from public property in that public property is owned by governmental agencies, and used for the broad benefit of the general society. This means that while public property is specifically for public use as allocated by the governmental authority in charge, private property is specifically for private use, with the legal

Paper 1 Essay Example | Topics and Well Written Essays - 750 words - 1

Paper 1 - Essay Example How many people take the snake for granted? Indeed, how many people respond to snakes the way we did in this story? A few years ago, I paid a visit to a High School friend in Pottsville, New South Wales over my winter break. My friends name was Nimrod and he had another English friend living with him at the time named Gareth. My friend’s home was a somewhat dilapidated weatherboard house that had ample air conditioning in the form of holes. Gareth, on one sunny day, decided to take a bath in the old school and â€Å"holey† bathroom where we could make out his joyous renditions of raucous rugby songs. The shriek was totally out of the blue and surprising. â€Å"ARRRGGHHH†, he shouted, followed by the slamming of the bathroom door. We saw him run off, naked as a newborn, for the woodheap. He rummaged in the woodheap and retrieved one rather tribal-looking axe before heading back into the bathroom. â€Å"I got you, you slimy b****. There is nowhere to slither to,â €  he cried, accompanied by thumping sounds. Nimrod and I decided to go and see what Gareth was so worked up about. Imagine how horrified we were to see Gareth, axe clasped in hand, standing naked, triumphantly, astride a very large snake that he had chopped into pieces. I looked at Nimrod, and he was as horrified as I was since we knew the snake. He was Oprah, his neighbor’s pet ratter, who was a rather friendly and lugubrious house python, at least two meters in length, and who had a liking for resting beneath Nimrod’s bed. Gareth, seeing our faces, tried incoherently to explain that the snake had come at him from the roof. â€Å"Would you have cuddled him?† he queried. Indeed, what would have been your reaction in a situation such as this? It is my reckoning that the snake would have been victim to the same fate in 70% of situations, and many would empathize wholly with Gareth. If this is true, then maybe there is a need to better look at the snake. Earth does not simply have life but a web of life on it. This web stretches and wobbles as the existence of tens of millions of species teeter in a precarious balance with one nurturing resource in the form of earth. Flora, mammals, fishes, birds, reptiles, insects, and all life are interconnected. It is for this reason that science has raised the concern of extinction for many species in the world. Wiping out other species, for example, the less likeable species like snakes, will lead to a significant imbalance in the environment, creating a void in the life web that, eventually, may destroy the web and decimate life, as we know it on earth. Snakes and creatures that humans think are ugly to look at have become a major concern worldwide, especially in habitats that are congested with human habitats overlapping with snake populations. In New South Wales, where Nimrod lives, he told me that the snake habitats had been exploited, and this forced the two species; snakes and humans, to co-exi st. In fact, some of them had taken the snakes in and domesticated them. Nimrod was adamant that snakes and humans can co-exist. He told me that early societies in North America had manipulated their environment in a way that allowed human and snake habitats to co-exist and overlap. He showed me a book written by European explorers, soldiers, trappers, and missionaries that affirmed native Indians even ate some of the species before they settled there.

The Life and Times of William Shakespeare Essay Example for Free

The Life and Times of William Shakespeare Essay Shakespeare is widely regarded as the world’s greatest playwright, and there’s no real reason to dispute that. People are still seeing his plays 400 years after he wrote them, not because it’s â€Å"trendy† or â€Å"hip,† but because they’re so good. His insight into the human spirit has never been equaled. This paper is a brief biography of Shakespeare and a discussion of the times in which he lived. Discussion His life: It’s somewhat difficult to find factual information about Shakespeare, because the â€Å"first attempts at biographical research were not begun until over half a century after Shakespeare’s death† (Best, 2005). In addition, there were few biographies written of important persons at this time, especially dramatists, since plays were not considered â€Å"serious literature† (Best, 2005). In addition, the Puritans closed the theaters in 1642, and many manuscripts and other records were lost (Best, 2005). It also doesn’t help that there are numerous spellings of his name. Nevertheless, scholars have pieced together a fairly complete picture of his life, and where facts are not known, they have drawn reasonable inferences (Best, 2005). However, the fact remains that much of what we know is based on indirect information. William Shakespeare was born in Stratford-upon-Avon some time in April, 1564, the son of John Shakespeare and Mary Arden (Hanna Life). Although there is no record of the exact date of his birth, there is a baptismal record at the church, so most scholars put his birthday as the 23rd of April, 1564 (Hanna Life). John Shakespeare was a â€Å"prominent and prosperous alderman† in Stratford, and was â€Å"granted a coat of arms by the College of Heralds† (Hanna Life). Little is known of Shakespeare’s boyhood but it is believed that he probably attended the â€Å"Stratford Grammar School† (Hanna Life). There is no record of him having gone on to either Oxford or Cambridge, both of which were well established by his time (Hanna Life). Shakespeare’s name turns up next in 1582 when he marries Anne Hathaway, some eight years his senior (Hanna Life). Their daughter Susanna was born in 1583 and twins, Judith and Hamnet, were born in 1585 (Hanna Life). Once again Shakespeare disappears from the records and doesn’t turn up again for seven years, by which time he is â€Å"recognized as an actor, poet and playwright† (Hanna Life). His recognition comes in the form of an insult from a rival, Robert Greene, who calls Shakespeare â€Å"an upstart crow† in his (Greene’s) play, A Groatsworth of Wit (Hanna Life). It’s thought that at about this time (1592) Shakespeare joined an acting troupe known as The Lord Chamberlain’s Men, one of the best in London (Hanna Life). The troupe leased the theater (named, unoriginally, â€Å"The Theatre†) where they performed; they lost the lease in 1599 (Hanna Life). By this time, though, the troupe had enough money to build their own theater, across the Thames on the less fashionable South Bank; this new theater was, of course, The Globe (Hanna Life). The Globe opened in July, 1599, with some of the old timbers salvaged from The Theatre used in its construction (Hanna Life). The Globe featured â€Å"Totus mundus agit histrionem (A whole world of players)† as its motto (Hanna Life). When James I ascended the throne in 1603, the company changed its name to the â€Å"King’s Men† or â€Å"King’s Company† (Hanna Life). The company’s instructions, conveyed to them in Letters Patent, told Shakespeare and eight other company members specifically to â€Å"use and exercise the art and faculty of playing Comedies, Tragedies, Histories, Interludes, Morals, Pastorals, stage plays as well for recreation of our loving subjects as for our solace and pleasure (Hanna Life). Things went well for the newly-christened King’s Men for another ten years, until 1613 (Hanna Life). Then, on June 19, a cannon fired from the theater’s roof during a â€Å"gala performance of Henry VIII† set the Globe’s thatched roof on fire and the theater burned to the ground (Hanna Life). The audience was so absorbed in the play that at first they ignored the fire, but when the walls and curtains went up, they surely must have run (Hanna Life). By some miracle â€Å"there were no casualties, and the next spring the company had the theatre ‘new builded in a far fairer manner than before’ (Hanna Life). Shakespeare â€Å"invested in the rebuilding† effort, but by that time he had retired to Stratford, to the â€Å"Great House of New Place† that he’d bought in 1597 (Hanna Life). There were considerable land holdings associated with the house, and Shakespeare remained there, where he continued to write, until his death in 1616 (Hanna Life). Ironically, he died on his alleged birthday, April 23 (Hanna). He was 52. Although he died at what we would consider a young age, he left behind a body of work that has made him immortal, and continues to light up theaters around the world. His Times: The world 400 years ago is often seen as romantic and noble, but it was brutal, unsanitary and often terrifying. We’re familiar with a lot of the history of the time through films and TV shows; a movie about Elizabeth I was released recently. Shakespeare lived at a time of political upheaval and court intrigue, as well as a time of exploration. For example, a man named John Hawkins sailed to the New World a second time in 1561 (Hanna Times). Trips like this were dangerous and daring, but also yielded treasure and more importantly, lands for the Crown. From 1577-1580 â€Å"Francis Proke sailed around the world† (Hanna Times). In 1586 when he was 22, Mary Queen of Scots was tried for treason and executed the following year (Hanna Times). And in 1588 one of the greatest events in English history took place: the English under the command of Queen Elizabeth I defeated the Spanish invasion fleet known as the Armada (Hanna Times). Unfortunately, this was also the time of the great plagues; plague swept through London in 1592-93, necessitating the closure of the theaters; plague struck again in 1603 (Hanna). This was also the year that Elizabeth I died and James IV, King of Scotland became James I of England (Hanna Times). It was at this point that the â€Å"Lord Chamberlain’s Men† became the â€Å"King’s Men†; James I liked the theater and was a writer himself, publishing works on such subjects and witchcraft and â€Å"the divine right of kings† (Best-James I, 2005). In 1605, the â€Å"Gunpowder Plot† was hatched and Guy Fawkes lead a group of Catholics in an attempt to assassinate James and blow up Parliament (Hanna – Times). The English still celebrate â€Å"Guy Fawkes Day. † As we saw, the Globe burned down in 1613 by which time Shakespeare had returned to Stratford. He lived only another three years.

Total quality management Literature review

Total quality management Literature review Literature review The world experienced the quality revolution in the early 1990s. From that instance organisations were improving in overall quality of the organisation. The companies around the world competed with their quality of products and services, price and delivery. Organisations believed that by improving the quality, they can achieve lower cost, fewer failures and better marketability. In this period total quality management became popular. TQM is applied in organisations to improve its effectiveness, flexibility and competitiveness, by improving the overall quality of the organisation. It is focused mainly on continuous improvement. TQM is nothing but a philosophy and guide to organisations, which helps them in ways towards continuous improvement. TQM is a combination of system of systems. All the companies have not achieved competitive advantage or benefits using TQM is because of implementation and usage in the organisation. To be successful with TQM the indicators which are to be achieved by an organisation are the leadership, continuous improvements, internal or external co- operation, customer focus, learning, employee fulfilment and process management. http://www.emeraldinsight.com/Insight/ViewContentServlet?contentType=ArticleFilename=Published/EmeraldFullTextArticle/Articles/0291030201.html http://www.emeraldinsight.com/Insight/ViewContentServlet?contentType=ArticleFilename=Published/EmeraldFullTextArticle/Articles/1060120604.html http://www.emeraldinsight.com/Insight/ViewContentServlet?contentType=ArticleFilename=Published/EmeraldFullTextArticle/Articles/0400140507.html http://www.emeraldinsight.com/Insight/ViewContentServlet?contentType=ArticleFilename=/published/emeraldfulltextarticle/pdf/1760030104.pdf According to Hansson and Klefsjà ¶ (2003) TQM can be defined as a management system, which consists of three interdependent units, namely core values, techniques and tools. But the definitions for total quality management are vague. The aim of TQM is Zero defect and it mainly emphasis on quality. The core values of TQM which will lead to better quality in the organisation is summarised from the authors (Boulter and Bendell, 2002, Ehresman, 1995, Ghobadian and Gallear 1995, Hansson and Klefsjà ¶ 2003, 2006 ) it is divided into three parts, first the whole organisation has to committed and work towards common goal i.e. continuous improvement. Secondly the customers are to be focused, through better satisfaction in the products and services. The decisions made with regard to customers are to be given the highest priority by top level management. Thirdly the decisions must be taken with trusted facts and figures. http://demo1.emeraldinsight.com/Insight/ViewContentServlet;jsessionid=5FBEA684473F22B9FAE30638F23D3534?contentType=ArticleFilename=Published/EmeraldFullTextArticle/Articles/1060150201.html Boulter, L., Bendell, T. (2002), How can ISO 9000:2000 help companies achieve excellence? What the company think, Measuring Business Excellence, Vol. 6 No.2, pp.37-41. Ehresman, T. (1995), Small Business Success through TQM, ASQC Quality Press, Milwaukee, WI. http://www.sciencedirect.com/science?_ob=MImg_imagekey=B6VC4-3VW1BRW-8-2_cdi=5944_user=138221_orig=search_coverDate=02%2F29%2F1996_sk=999759998view=cwchp=dGLbVlz-zSkzkmd5=a2afeab00d66a4e64f8e3a30e84385dfie=/sdarticle.pdf http://www.sciencedirect.com/science?_ob=MImg_imagekey=B6VCT-4MHPHMF-C-5_cdi=5963_user=138221_orig=search_coverDate=12%2F01%2F2007_sk=998169997view=cwchp=dGLbVzb-zSkWzmd5=e471fdc0aece7732196abd9705804b37ie=/sdarticle.pdf http://www.emeraldinsight.com/Insight/ViewContentServlet?contentType=ArticleFilename=Published/EmeraldFullTextArticle/Articles/0291080901.html From the definition and study it is stated that the environmental management is a part of quality management. When the organisation is moving towards total improvement in performance, the environmental performance has its presence. Governments and agencies around the world created quality systems to help the organisations to achieve their quality objectives through quality management systems and environmental performance in environmental management systems. The QM and EMS share a common aim and values. QM and EMS are integrated now. According to Wilkinson and Dale, 1998 and Karapetrovic and Willborn, 1998 integration can be carried out in many different ways but, the results differ in terms of applying it and it is also called as system of systems. Wilkinson, G., Dale, B.G. (1998), System integration: the views and activities of certification bodies, The TQM Magazine, Vol. 10 No.4, pp.288-92 Karapetrovic, S., Willborn, W. (1998), Integration of quality and environmental management systems, The TQM Magazine, Vol. 10 No.3, pp.204-13. For example the ISO has developed management systems separately for quality management and environmental management i.e. ISO9000 for quality and ISO14000 for environmental management. Integration was done by the technical committee in 2004 between quality and environment systems. They had explored the common factors between two systems and modified ISO 14000-2004 to enable organisations to use both systems at once. This resulted in superior performance in many organisations. They introduced the PDCA which is common for both systems. Bernardo et al, 2008 http://demo1.emeraldinsight.com/Insight/ViewContentServlet?contentType=ArticleFilename=Published/EmeraldFullTextArticle/Articles/0510200405.html#idb31 Environmental management and quality management are parallel to each other. They have common factors like zero defects and no wastage and the process of implementation with corrective and preventive actions. But some basic value does not integrate, exactly with each other. QMS mainly concentrates on consumer requirements and on the other had EMS focuses on the environment. According to Chinn a new concept was formed in late 90s which was named as QEMS which means quality and environment management system. It has stated the common elements they worked upon. They are planning, objectives, management responsibility, communication, training, control of records and many others. So when an organisation need to equipped with total quality system, the EMS will also must be in place to monitor the environmental sustainability measures from the organisation. What is Benchmarking? In the present business scenario, quality has become a major criterion in all aspects of the organisation, so the managers have taken up quality improvement tools such as total quality management, quality function development and continuous improvement. The exertion of these tools is to discover the flaws in the organisational process. The next step is to convert these flaws and improving the component. Here the question rises of how to fix these inadequacies? Benchmarking is the way to fix them. As benchmarking is a quality improvement process. It is a systematic process of searching and monitoring the best practices in the sector. Benchmarking has been the concept of imitating the best practices in the industry. Organizations have to achieve cost benefits, better operations and better environment by which it induces the company to learn quickly and cheaply from adopting the best practices and performance standards from other companies in order to get better competitive advantage over its competitors. This can be extended anywhere because the ultimate goal is to be best in class. Benchmarking is commonly used tool in the organisations. This technique can be implemented in all sectors and it is due to increasing competitiveness. Benchmark means to a unit on a scale for measurement. It was a fashionable concept for the large manufacturing companies which predominantly uses quantitative economic parameters, such as inventory turnover, set-up times, lead time, direct labour time or working time, return on sales, return on equity are measured.(Miller et al.,1992). Nowadays benchmarking is used everywhere and it is used to measure any process, activity, procedure in an organisation which may be of products or services. Many authors and literatures have given many different forms of definitions for benchmarking. Definitions from Sarkis, Andersen and pettersen and Marosszeky and Karim are benchmarking means comparing the practices, operations, results of an organisation with the best organisation in the sector and adopt and practice the techniques used in there to improve ones own organisation. And it focuses on continuous improvement, in quality and helps to learn from the competitors. Through which the faults and breakthroughs in the organisation can be easily identified and systematically dealt with. It also helps in improving the overall quality and business environment carried out through learning from each other. It forms a continuous and systematic improvement in an organisations processes, products and services which are being monitored and adopted from the best practices globally or nation wide or in a particular sector. Benchmarking is used to achieve and maintain high level of competitiveness. It monitors the continuous improvement by the process of measuring the products, services and business practices against the best practices in the industry. The organisations strengths and weakness can be easily identified and measured with the best and toughest competitors in the industry. Best practices is finding and using the best ways to achieve the desired objectives in the organisation. It is done by imitating the practices and processes of the organisation who are leaders in the sector and measuring the ways it worked with. Benchmarking can be done in five steps for an organisation. Firstly the required data are collected in a planned manner from the organisation and the data is converted into a report format, which make it easy for analyzing the situation. After creating a report the gaps are to be detected and corrective action has to be implemented to fill the gaps. When the gaps in the organisation are corrected, review has to be done in regular intervals and reported. It is compared with best practice in the industry. http://www.scotland.gov.uk/Publications/2007/04/02091848/1 Many organisations are not aware of what needed to be benchmarked. because of the lack of management knowledge. A key issue is that what to benchmark in business or an organisation. It is mainly used to compare and measure of business and product performance and how it is extended to the business processes. Determining the issues to be benchmarked is a critical issue. The following questions can aid to the question of what to benchmark with environment (Cassell et. al.., 2001) To find the critical factors which are of organisations success To find the process causing the trouble in the system To find the process which contribute to maximum customer satisfaction and in which the performance is not to the expectation Examine and define the competitive pressures impacting the organisation What the processes which have the greatest potential for differentiating in the business competitiveness? Environmental benchmarking The environmental benchmarking is derived from benchmarking and it mainly focuses on the natural environment. It helps the organisation to become green and eco efficient by adopting the practices from the leaders in industry. It is also a quality improvement tool and has become very essential to an organisation. They are used to achieve environmental performance in the organisation i.e. it helps the organisation to manipulate on the natural environment. It is adapted in many organisations due to the pressure from stake holders, public and authorises. According to Greeno and Robinson 1992, Demands on companies to measure, document and disclose information about environmental performance will become invasive.and environmental performance will become a critical factor to scrutinize. It is been predicted a decade ago, and the governments has now made it mandatory and bought it to the legislations that organisations must be environmental conscious and friendly. According to Szekely, et. al.., 1996, Makrinou et al 2008 and Mandaraka, et. al 2003 Environmental benchmarking is used by various organisation in their practices, process and in business operation to achieve environmental efficiency and environmental performance. The tool framed to rigorously concentrate on every activity of the organisation and examines and compares the process to achieve its objectives. The process is the elimination and rectification of weak activities and processes in the organisation and the objective is to identify and access the abilities and attributes in business to achieve maximum environmental performance. Most of the weak activities cause heavy pollution and burden to the environment. The weak process and activities are very dangerous to the environment and life. The world in has seen many industrial disasters in last two decades due to unhealthy practices and operations by the environment. The best examples are the Efficient and maximum usage of virgin materials in the organisation, recycling of waste, waste, treatment plant to neutralise end pipe discharge, maximum utilization of assets and machinery and power saving equipments and minimum usage of non renewable resource. Minor modifications in the process of operations in the organisations, will lead to lesser impact on the environment and can avoid these kinds of disasters in future. The improved process, practices and operations can be identified from the best practices. Benchmarking tools helps in finding the best practices in national and international level. Environmental benchmarking is an integral part of environmental management systems. This helps in setting up of goals and targets for an organization towards environmental efficiency. It also helps in monitoring the performance of the targets which are to be achieved towards better environment. It is one of the tools used in management systems like EMS (Bolli and Emtairah 2001). Environmental management system EMS is a management type system which aims in managing the environmental aspects of the organisation in a pro active way, and it directly relates to the organisations overall performance. It relates to the process, practices, products and services and day to day operations. The main objective of Ems is to continually improve the environmental performance of the organisation with overall performance. Ems is a collection of policies, statements, assessments, plan and actions which directly or indirectly affects the organisation and its performance. Organisations achieve environmental performance with Ems in a systematic manner. It is a continuous cycle which plans, implements, reviews and improves the practices and processes of the organisation for continuous improvement towards environmental sustainability. Ems mainly focuses on minimizing the environmental impacts of the organisation on the natural environment. The main objectives of Ems for the SMEs are It induces the organisation to have an environmental management system. It assists the SMEs in understanding the concepts of Ems in their operations, in order to help the management to adopt precisely. This reduces the impacts on natural environment and it is easy to comply with the regulation. This helps in cost savings and increased productivity. The third objective is developing a awareness with the SMEs entrepreneurs, regarding the importance of environment and the organisations impact on them. It helps the SMEs in creating a strong foundation to implement the international standards like ISO and EMAS in organisations. According to British standards institute, Ems is defined as the organisational structure, responsibilities, practices, procedures, processes and resources for determining and implementing environmental policy. According to BSI is nothing but an environmental policy which outlines the organisations commitment to the environmental performance. Many organisation in different countries follow and adopt the environmental management system such as BS8555, ISO 14000 series, EMAS, Green dragon. But in common it works on the Deming Cycle. Plan, what you are going to do, do what you planned to do, check to ensure that you did what you planned to do and act to make improvements. SMEs adopt EMS EMS is an unobserved quality. It can be examined only by the drivers, practices. The organisations are motivated to use EMS and its environmental strategies to increase their efficiency and legitimacy. It is very controversial because from the study of states those SMEs are not only motivated by the rewards and befits such as environmental performance, organisational/business performance and export orientation but they are pressurized to adopt EMS by their stake holders and institutional pressures. According to Khanna and Anton 2002 EMS becomes complete when they are more environmental practices is undertaken in the organisation. The environmental practices are the environmental policy, evaluation, training for employees, regular audits of internal and external in nature, environmental performance and benchmarking with the best practices, goals and targets and public report. Motivation and EMS Motivation is the driving force behind for an organisation to implement a management techniques or tool or system in their operations and business process. The factors and statistics which can be used to motivate the organisations to implement EMS in their organisation and in the same time become environmentally sustainable and reduce the impact on natural environment. The factors are the organisation can achieve compliance with the regulations of the government, it creates an eco friendly image to the stake holders and better marketability options and it also reduces cost with greater organisational performance. Export orientation In the globalised world export and import has taken the centre stage. Export orientation becomes imperative when organisation operates within or depends on the foreign markets. When the goods are carried out of national borders EMS becomes essential to meet the demands of the importing country and the needs of diverse customers. Buyers gain trust of exporters by looking into the operations and eco friendly procedures and facilities implemented in the organisation. EMS and organisational Performance A management system is framed and practiced in the business is to gain from the management practices. The gain or benefit can be in the form of monetary benefit or non monetary benefit. EMS and environmental performance EMS and pressure on SMEs SMEs are exposed to stakeholders pressure to adopt environmental management system. The stakeholders are person, group, organisation or the government which has a direct or indirect stake in the organisation and can or would be affected by the organisations policy, decision and operations. The stake holders for an SME are Regulatory pressure The regulatory pressure is created from the regulators, governments, insurers on the organisation to curb their pollution levels and employ eco friendly operations and which doesnt impact the natural environment. If the organisations fail, it is imposed with fines, penalties, strategic actions or even closure of firms. The regulatory pressure creates an opportunity for the organisation to become more competitive and capitalize of the situation. But when the regulation becomes stricter, the SMEs are compelled to implement costly pollution control technologies. Better pollution control leads to lesser insurance premiums and better credit options from the bank and financial agencies. Market pressure In this competitive world the organisations are concerned about the market share. Customers have become concerned about the natural environment and they have started to use the products and services of the organisations which are eco efficient and sustainable towards the environment. When organisation adopts EMS it increases organisations reputation. The market pressures drive the managers to adopt EMS to survive in the business and to stay competitive. Social pressure An organisation must have a better public image to survive and competitive in the market. To gain the image the organisation need to become environmental friendly and work towards continual improvement. The word social include the environmental organisation, community groups, labour unions and association which regards to trade. There is been a increase in awareness towards the natural environment in recent times because of industrial accident like Bhopal disaster and Exxon oil spill which shock the world. When an organisation does not implement EMS in their organisation the worst scenario of boycott of goods and it may damage the image in the business environment. Ownership pressure This pressure is imposed on the organisation by their share holders. In SMEs the share holders are in the form of partnership within the company. The pressure is on the organisation to adopt EMS with wide-range of tools and techniques to create an environmental friendly organisation. Organisation is prone to financial liabilities when it has a poor reputation in terms of environment and performance. Internal and external barriers to SMEs in adopting EMS Internal barriers are of resources, understanding and perception, implementation and attitudes and company culture. SMEs are lack of time from the management and staff, to concentrate on EMS implementation and maintenance. Staffs in SMEs lack managerial skill and it is not possible for SMEs to give training due to the constraint of limited resources. When there is an inexperienced or unskilled staff force it becomes difficult to implement EMS, because lack of understanding of the procedures, policies and legal compliances. Implementation of EMS is very cumbersome. Minor breaches in the implementation would cause a heavy loss of resources to the organisation and possible deregistration from the standards. SMEs have to concentrate on continual improvement and it is very difficult to adopt in every stage on the process. The external barriers are the obstacles and hindrances which arise from the external environment of the organisation. High costs of recruiting a consultant and verification/ certification is a major barrier to the SMEs. They are limited number of verifiers in each country and it becomes more expensive to hire. SMEs are not beneficial with EMS because of change in economic climate and Uncertainty which prevails within the market for the value of EMS standard. Benefits and disbenefits of SMEs adopting EMS Small and medium scale enterprises around the world share common characteristics. According to - SMEs around the world contribute 70 percent of pollution ie the SMEs cause great impact to the natural environment. So the EMS model was adapted to SMEs from large scales enterprises. SMEs adapting EMS face disbenefits or non materialization benefits from EMS in their organisation. They are being classified into three (i) resources (ii) surprises (iii) lack of rewards. SMEs characteristics are it lacks professionalism, lack of knowledge, is has started with a minimum capital, lack of skills and time. They also have the barrier of specialized staff and skills to co ordinate the EMS activities in the organisation. The SME has to rely completely on consultants for the certification and adaption on EMS. It is evident that, some may misguide and it results in negative results and wastage of resources for the organisation. SMEs have to incur cost of certification and implementation which is of high capital expenditure to the organisation. which is beyond reach for many organisations. The EMS surprises the SMEs with resources and time spent to implement system which are complex in nature. The other surprises are it is difficult to meet the expectations of all stake holders, it difficult to synchronise with other management