Page 195 - Introduction to Business

CHAPTER 5 Managing and Organizing Business 169

Immelt, the head of GE’s medical systems business; Bob Nardelli, the head of the
company’s power system business; and Jim McNerney, the head of the company’s
aircraft engine business. These three finalists spent considerable time during the
last year or two of the process interacting with members of the GE board of direc-
tors and with Welch himself, as the board and Welch tried to make a decision. As
Welch put it, “We had three Gold Medal winners, and only one Gold Medal to
13
give.” In the end, the nod went to Jeff Immelt, who holds the CEO position at Gen-
eral Electric today. Within ten days, both Nardelli and McNerney, who were now
told to leave GE, had new jobs—Bob Nardelli as CEO of the Home Depot Corpora-
tion, and Jim McNerney as CEO of the 3M Company.
INNOVATION PLANNING. Increasingly, given the competitiveness of today’s market-
place, companies are under considerable pressure to innovate—to come up with
new business ideas. While this may come fairly naturally to fledgling small busi-
nesses, it does not come naturally to large, well-established corporations. More and
more, however, large corporations are engaging in innovation planning, where innovation planning Planning to instill
they explicitly plan ways to instill more of an entrepreneurial spirit into their cor- more of an entrepreneurial spirit into
an organization
poration. Innovation planning can have a wide variety of focuses. Some such plan-
ning involves formulating ways to instill more of an entrepreneurial spirit in indi-
viduals working at the company, while other such planning primarily focuses on
developing a more entrepreneurial spirit in the culture and organizational systems
of the firm. The idea is to plan ways for companies to be more innovative and cre-
ative and to successfully commercialize new products and other innovations that
they discover. 14
One company that has been very successful in this regard is the large pharma-
ceutical company Pfizer. For example, Pfizer tested the drug sildenafil citrate at a
research center in England as a treatment for angina (heart muscle pain). Innova-
tively-oriented researchers saw that the drug might also be useful in successfully
treating erectile dysfunction. Moreover, innovation planning at Pfizer had made

Fairly shortly after his appointment
as the head of the General Electric
Company (GE), Jeff Immelt (left)
flew to China to meet with
Chinese president Jiang Zemin
(right). GE, like Whirlpool and
many other American companies,
is actively pursuing business
in China.

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