Case 11- 6 oecumenical 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 founder carrefour lines and over three mil-lion catalog items. Sales record book in that year totaled $4,941 million, and net income was $237 million. Total exercising was slightly 262,000. Early in the 1950s, General Electric initiated an all-inclusive decentalisation of authority and responsibility for the operations of the go with. The prefatorial 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 blanket(a)y effective it would sine qua non an improved system of centering run. It also recognized that any improved system of control would require better handbills of per¬formance. To play this need, the company established a measurements regorge and created a extra organizational unit to hire out this project. This case summarizes the primary(prenominal) features of this project, with particular emphasis on touchstone effect 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 embodied functional services divisions. A permanent organizational unit, ab initio called measurement ser¬vice, was stack up to carry out this project. An advance(prenominal) s tep in the measurements project was the deve! lopment of a set of principles by which the project was to be governed. Five such principles were hypothesize: 1. Measurements were to be designed to measure the performance of organi- zational components, rather than of managers. 2. Measurements were to assume common indexes of performance, but not common standards of performance. (For example, rate of restoration on invest¬ment energy be the index of performance common to all product...
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