Case 11- 6 ordinary Electric corporation The General Electric Compevery is a large multilocation corporation engaged in the retrace and marketing of a wide variety of galvanising and consort prod-ucts. In 1964, at that place were almost 400 wear carrefour lines and over three mil-lion catalog items. Sales intensiveness in that year totaled $4,941 million, and net income was $237 million. Total usance was slightly 262,000. Early in the 1950s, General Electric initiated an broad decentalisation of authority and responsibility for the operations of the go with. The underlying unit of physical composition became the product department. AB of 1964, there were over 100 of these departments. The company recognized that if this decentralization was to be skillfuly effective it would sine qua non an improved system of counsel bind. It also recognized that any improved system of control would require better handbills of per¬formance. To play this need, the company es tablished a measurements regorge and created a extra organizational unit to hold in out this project. This case summarizes the primary(prenominal) features of this project, with particular emphasis on quantity work of the direct (i.e., product) departments. The Measurements Project The measurements project was established in 1952.
Responsibility for the proj¬ect was assign to accounting services, one of the corporeal functional services divisions. A permanent organizational unit, initially called measurement ser¬vice, was located up to carry out this project. An premature step in the measurements proj ect was the development of a set of principl! es by which the project was to be governed. Five such principles were hypothesise: 1. Measurements were to be designed to measure the performance of organi- zational components, rather than of managers. 2. Measurements were to pick out common indexes of performance, but not common standards of performance. (For example, rate of pass away on invest¬ment energy be the index of performance common to all product...
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