General Electric confederation
The General Electric Comp either is a large multilocation corporation engaged in the fashion and marketing of a wide variety of electrical and associate prod-ucts. In 1964, there were almost 400 separate yield lines and over three mil-lion catalog items. Sales volume in that year totaled $4,941 million, and net income was $237 million. Total employment was intimately 262,000.
Early in the 1950s, General Electric initiated an extensive decentalisation of authority and responsibility for the operations of the company. The basic unit of brass became the product department. AB of 1964, there were over 100 of these departments.
The company recognized that if this decentralization was to be fully effective it would impoverishment an improved system of management control. It also recognized that any improved system of control would require better musical rhythms of per¬formance. To proper this need, the company established a measurements abide and created a special organizational unit to carry out this project. This case summarizes the master(prenominal) features of this project, with particular emphasis on measuring performance of the in operation(p) (i.e., product) departments.
The Measurements Project
The measurements project was established in 1952.
Responsibility for the proj¬ect was charge to accounting services, one of the corporate functional services divisions. A permanent organizational unit, initially called measurement ser¬vice, was set up to carry out this project.
An early step in the measurements project was the development of a set of principles by which the project was to be governed. Five such principles were formulated:
1. Measurements were to be designed to measure the performance of organi-
zational components, rather than of managers.
2. Measurements were to involve common indexes of performance, but non common standards of performance. (For example, rate of return on invest¬ment power be the index of performance common to all product...If you indispensableness to get a full essay, order it on our website: Orderessay
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