1.  By: Shada Zaroug, Ehab Etani
 7/29/2014
General
Electric

2. • Is an American multinational conglomerate
corporation.
• Headquartered in Fairfield, Connecticut in the
United States
• Company operates in many segments such as:
- Energy, Technology Infrastructure, Capital Finance
and Consumer and Industrial

3. •Organization started with 12 layers and an
average span of control between three and four.
•Span of control is the direct number of reports,
which was too narrow.
•With such a large number of layers, came a large
number of pay levels.

4. •Our Strategy within the few years:
- To have six layers at GE, and an average span of
control, more than ten.
- Activities will be monitored by higher ranks in
order to check their value, if those activities
with the employees working within are not
creating any value then they will be eliminated.

5. •This strategy focuses on the organization and the
human resources.
•There is a need to change the hierarchy of
reporting relationships.
•The implementation of this change is in order
- To Increase the organisations reaction time
(responsiveness) which works towards improving
the overall productivity.

6. •By focusing on changing at management level,
this speeds up both information flows and
decision making.
•Value based cost reduction focuses on process
activities rather than the interaction of people
•Leaner managerial ranks tend to focus on work
rather than coordination

7. 1.Find the problem
-GE looked outside the company for perspectives, and set about
gathering opinions on layers of leadership requirements in particular.
- Meet with leaders from more than 100 organisations, including large
multinationals, small start-ups in emerging markets, universities,
military institutions.
2. Offer a presentation
Showing detailed analysis of the layers, levels and spans of control
Charts, numbers, change in reporting and facts

8. 3. Personal Leadership
-Outcomes: That will help the employees have an image of the
new organization. (Including new levels, layers)
- Interest: Using the influence of reason by showing different
facts and ideas that will be presented
- Sources of power.
Expert: Knowledge (Change Agent) / Legitimate: A change must
occur by seniors
- Emotions: Influencing people to adapt by creating goodwill
and updating the values (Employee treatment and benefits)

11. • 18 officers were separated from the CEO by 4
reporting layers
• 40% of the company`s managers were 8 or more
layers.
• More than 800 people were in reporting chains of 11
or 12 layers.
• Middle Management had narrow spans of control
• Cost cutting is traditional at bottom layers because
its lean.

12. •Management decreased the layers from 12 to 8.
•Achieved savings of roughly 30%.
•The idea was if savings were 10% or less, managers
would only reduce costs part of budget execution.
•But if its more than 10% which is the case here then
will use delayering that will help maintain morale.

13. • The main issue here is the reporting relationships,
basically the communication between middle
managers and their subordinates.
• The theory suggests we need to change the way
they think (About the layers of transferring the
reports) so by delayering this will allow the
individuals to change the way they respond to
situations.

14. • Infusing growth throughout the organization
• Instating the ability to work with the values of a leader.
• GE
- Will implement a “Success Factors Project”, where senior
leaders from every business and functional area of the
company will ask about their leadership approach.
- They will be asked what worked, what didn’t, and what
had helped make them successful.

15. • Changing the hierarchy meant some subordinates will be
cut or others had to report to other higher managers.
(Internal Changes)
• By presenting facts acceptance of the situation will
settle. Its less personal to eliminate frontline employees.
• Circle of change:
- Problem-Planning (Analysis of different layers/levels)-
Taking action

16. •Increases the discipline within the organization
•Gives a sense of confrontation
•A clear sense of where do you want the company to move
towards.
Being an outsider (Change Agent Advice):
- We’re hesitant to offer help because flattening a steep
organizational pyramid is a very traumatic process for
everyone involved.
- Delayering process can damage relationships across an
organization.

18. •There should be values embedded in the performance-
management system, that determines rewards and incentives
across the company that must be adjusted with the trends.
•GE was already a performance-driven culture, but this new
aspect of including the Growth Values in performance reviews
ensured that compensation would be based not just on what an
employee did, but how they did it.
•Be clear about what, why and how the delayering process or
any process within the organization.
•Getting the support of from different levels to increase
satisfaction.

19.  Cosmato, D. (2011, July 31). Organizational Restructuring: Strategies and
Examples.Bright Hub. Retrieved July 29, 2014, from
http://www.brighthub.com/office/human-resources/articles/122397.aspx
 Shaping up: The Delayered Look. (n.d.). . Retrieved July 29, 2014, from
http://www.bcg.com.cn/export/sites/default/en/files/publications/articles_pdf/Sha
ping_Up_The_Delayered_Look_Oct04.pdf
 About Us. (n.d.). GE.com. Retrieved July 29, 2014, from http://www.ge.com/about-
us/building
 The Growth of values:How GE aligned its culture with its growth strategy. (2012,
January 1). . Retrieved July 29, 2014, from
http://www.cbi.org.uk/media/1925640/GE%20Capital%20growth%20values.pdf