Case | HBS Case Collection | January 1989 (Revised June 1993)

General Electric: Compliance Systems

by Robert L. Simons

Abstract

After General Electric (GE) is indicted in 1985 for defrauding the Department of Defense, Chairman John F. Welch takes dramatic steps to prevent a recurrence. This case documents the new systems and procedures that are put in place to ensure that all GE employees are aware of the boundaries of acceptable behavior. Closes with a discussion of the benefits and costs of Welch's approach. A follow-up to General Electric: Valley Forge (A--H). Facts and Figures on Defense Procurement is intended to be used as supplementary reading in teaching this case.

Keywords: Policy; Contracts; Business or Company Management; Communication; Business History; Behavior; Boundaries; Management Style; Cost Management; Electronics Industry;

Citation:

Simons, Robert L. "General Electric: Compliance Systems." Harvard Business School Case 189-081, January 1989. (Revised June 1993.)