Case Study 2: GE Healthcare (B): A CSR Dilemma

Tosh |

March 15, 2018

 

Read the case study titled “GE Healthcare (B): A CSR Dilemma” located in the 

Reviewing  the case study titled “GE Healthcare (A): Innovating for Emerging  Markets” may be helpful in supporting your arguments.

Write a two to three (2-3) page paper in which you:

Determine two  (2) specific ethical issues that General Electric (GE) Healthcare faced  when implementing its strategy to introduce low cost diagnostic  equipment to developing countries. Recommend two (2) actions that GE can  take to resolve these ethical issues.
Analyze the  concepts of professional and applied ethics and determine whether GE  Healthcare breeched these concepts in the development of its low cost  alternatives for diagnostic medical equipment. Provide one (1) specific  example to support your rationale.
Determine  whether GE Healthcare has any responsibility in resolving the issue of a  preference for male children in cultures where its diagnostic  ultrasound products are sold. Recommend one (1) strategy that would  enable GE Healthcare to balance its responsibility of continued growth  and development with any ethical or moral concerns investors and human  rights groups might have regarding the use of its equipment in  controlling the birth rates of male children in some cultures.

 

Running head: GE HEALTHCARE (A): INNOVATING FOR EMERGING MARKETS 1

GE HEALTHCARE (A): INNOVATING FOR EMERGING MARKETS 5

GE Healthcare (A): Innovating for Emerging Markets

The trends that emerged that made GE Healthcare come up with a new strategy for establishing a market in India for the low-cost EEG machines is the ability to tap into the middle class in the country. India can be considered to be at the bottom of the pyramid of the market because it is considered undeveloped compared to a majority of the western countries. The middle class in India might be considered poor by western standards, but it can still afford the goods sold for less in the western countries. Another emerging trend is that the countries in the developing market have some governments that can purchase the medical equipment for their hospitals. GE Healthcare, therefore, decided to tap into the populations found in the BOP markets. The countries can adopt affordable products as long as performance is acceptable (Malodia & Jaiswal, 2015).

A few things that obstructed GE and its development in India, the main one is that the company was powerless when it comes to taking advantage of the business with millions of people. The particular needs of the market in India were not considered in particular. The Research and Development activities in India were floating towards meeting the needs of the top line fragments made up of business sector clients. A senior executive at the company said: “We were offering what we were making [rather than] making what the clients here required.” To overcome that said difficulties the company decided to come with a national method for India. The changes to be made were directed at the authoritative structure. The first change that was made was ensuring that India was being dealt with using an autonomous scale. India was to be treated the same way the company viewed the US and China. India was to get the lion’s share when it came to the viewing of the universal presentation of the company instead of being regarded as any other single country.

The second change in authority involved making GE India the first nation to enjoy some form of autonomy from the parent company. The business heads in India were now to report to the CEO in the nation with just a slight connection to the company’s global business heads. The country would now be regarded as a business with its own development method, planning methodology, and administration improvement. The setting of India under its unique management structure as well as the administration was to ensure that decision making was accelerated and the necessary adjustments were made. The CEO in charge of the Indian branch, T.P Chopra, was replaced with a senior VP from the top ranks in the company. The new CEO was part of the global business heads and was there to ensure that the decentralization process would not be a tradeoff for quality practices and they would not cross certain limits. GE also created different groups for commercializing arrangements for “worth for-cash” items which would focus on the low-pay markets. R&D was being supplemented locally in efforts involving sourcing, assembling, promoting and administration. There was also development targets set to improve the Indian business sector. The company was able to cut costs and achieve a faster decision making using the decentralized management structure.

The health awareness industry in India in 2010 was $30 billion, and this was expected to double in the next five years. The medical gadgets sector at this time was being placed at a figure of $3 to $6 billion with a growth of around 10% annually. The competition in the country, however, was very impressive because of enjoying a huge expense advantage. The clients, on the other hand, had a constrained budget and were touchy on value. The high value and price items were being made by multinationals like GE and Philips. GE was the lead in demonstrative gear like CT, MRI, ECG, and CT. because of GE focusing a lot on value, the huge portion of their budget was coming from sales to expensive hospitals.

The healthcare division at GE was the first to adopt the new policy of “In India, for India.” The division started working on various activities before the new activities were set up and they had started making ECG items that were tailored for the Indian market. Cardiovascular infections were among the biggest reasons for death taking more than 30% of the total deaths. The non-transmittable diseases had been previously connected with developed countries, but this was no longer the case. India had more than 2 million deaths related to diseases like diabetes, stroke, and coronary illnesses. The number of heart patients in India was more than 60 million spread throughout the country. 30% of the people with heart complications were under the age of 40. India, therefore, was soon going to be a host of a large proportion of patients suffering from heart diseases. ECG testing was therefore set to become a huge part of healthcare in the nation. Machines such as the MAC 5500 were now directed to meet these needs at the cost of around $10,000. The machines were targeting the spending plans and needs of the high-end facilities in the country taking the high-end market. India has a capita salary of around $1000, and few people could afford this costly testing using the high-end machines. However, it is essential to note that the cost was not the primary issue. The other issue was people without access to health facilities because they were in rustic regions and residential areas. The stripped down versions of the current goods, therefore, would not be the only solution. GE, therefore, had to deal with less qualified specialists and low salaried patients. The potential patients, other than the cost would also consider the quality of the times that would meet their needs.

References

Malodia, S., & Jaiswal, A. K. (2015). GE in India: Changing Healthcare. Doi: 10.4135/9781526428943

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