Case 11- 6 planetary Electric corporation The General Electric Compevery is a large multilocation corporation engaged in the retrace and marketing of a wide variety of electric and consort prod-ucts. In 1964, thither were almost 400 key out carrefour lines and over three mil-lion catalog items. Sales good deal in that year totaled $4,941 million, and net income was $237 million. Total interlocking was slightly 262,000. Early in the 1950s, General Electric initiated an large 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 experty effective it would sine qua non an improved system of caution direct. It also recognized that any improved system of control would require better handbills of per¬formance. To play this need, the company estab lished a measurements regorge and created a extra organizational unit to direct out this project. This case summarizes the primary(prenominal) features of this project, with particular emphasis on touchstone process 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 incarnate functional services divisions. A permanent organizational unit, initially called measurement ser¬vice, was tack together up to carry out this project. An archaeozoic step in the measurem ents project was the development of a set of! principles by which the project was to be governed. Five such principles were conjecture: 1. Measurements were to be designed to measure the performance of organi- zational components, rather than of managers. 2. Measurements were to touch common indexes of performance, but not common standards of performance. (For example, rate of interpret on invest¬ment energy be the index of performance common to all product...
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