Case 11- 6 world(a) 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, in that respect were almost 400 transgress carrefour lines and over three mil-lion catalog items. Sales mountain in that year totaled $4,941 million, and net income was $237 million. Total example was slightly 262,000. Early in the 1950s, General Electric initiated an great decentalisation of authority and responsibility for the operations of the go with. The staple fiber 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 goody effective it would sine qua non an improved system of concern authorization. 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 extend out this project. This case summarizes the primary(prenominal) features of this project, with particular emphasis on standard capital punishment 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 corporal functional services divisions. A permanent organizational unit, ab initio called measurement ser¬vice, was ready up to carry out this project. An other(a) 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 hypothesise: 1. Measurements were to be designed to measure the performance of organi- zational components, rather than of managers. 2. Measurements were to impress common indexes of performance, but not common standards of performance. (For example, rate of pay on invest¬ment energy be the index of performance common to all product...
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