Question: Multiple Goals and Profitability The following multiple goals were identified by General Electric :
Profitability Market position Productivity Product leadership Personnel development Employee attitudes Public responsibility Balance between short-range and long-range goals General Electric is a huge, highly decentralized corporation. At the time it developed these goals, GE had approximately 170 responsibility centers called departments, but that is a deceptive term. In most other companies, these departments would be called divisions. For example, some GE departments had sales of more than $500 million. Each department manager's performance was evaluated annually in relation to the specified multiple goals. A special measurements group was set up to devise ways of quantifying accomplishments in each of the areas. In this way, the evaluation of performance would become more objective as the various measures were developed and improved.
1. How would you measure performance in each of these areas? Be specific.
2. Can the other goals be encompassed as ingredients of a formal measure of profitability? In other words, can profitability per se be defined to include the other goals?