Scenario:

For years, General Electric has been the pillar of manufacturing standards and stood as an icon for the American economy. Despite its strong history, CEO woes and a power struggle from within during the past few years have started to unravel the company's control. Jeff Immelt, long-time CEO, was respected and revered for his discipline. However, this mentality took its toll and led to declines and complacency. The struggling company wanted change and desperately needed growth; it appointed John Flannery. Shortly after the appointment of Flannery, the new CEO pulled a change of his own as wellfiring half of the company's board. This type of move was almost unheard of, and the purge as presented was planning to cut dividends and slash less profitable business lines.

The pressure from investors was felt immediately by Flannery, and this move was a desperate attempt to regain some footing and remain atop the industry standard. Fast forward to 2018: after only one year on the job, the board decided it was done waiting for the turnaround and took drastic action, ousting Flannery and absorbing $23 billion in loss from the process. The tumultuous and fast-paced changing tech-dominated economy of the 21st century showcases the harsh realities in this GE change of power. "The market didn't even give the company the benefit of the doubt that things would work," said Ivan Feinseth, chief investment officer at Tigress Financial Partners. "Flannery's plan hasn't worked."

The market favours tech companies such as Google and Amazon rather than traditional manufacturers. And the new CEO, Lawrence Culp, will have an uphill battle to take over all of the woes of GE. As the first outsider to take over leadership, he has a lot to prove as well. His successes at Danaher preceded him and the company's stock has soared since the change occurred, already showing a positive impact.

Required:

Apply knowledge of Power and Politics in Organisations to explain why Flannery failed as the new CEO of GE?