Wednesday, August 28, 2019
The Evolution of a Firm Essay Example | Topics and Well Written Essays - 1500 words
The Evolution of a Firm - Essay Example The evolution of GE starts with the greatest inventor every produced by America, i.e., Thomas Edison who is widely known for having created the light bulb that can be credited for America becoming a country which operates round the clock. In 1876, Edison started work in his lab in New Jersey and after his patents and inventions had given him enough capital, he was able to start a company called the Edison General Electric Company. While Edison had some competition from rival firms, a merger which was arbitrated by none other than J.P. Morgan led to the creation of the General Electric Company which was then headquartered in Schenectady in New York (Welch, 2005). This phase in the evolution of a firm can be understood as a phase of growth since the time of family-owned companies was on its way out due to the tremendous need for capital to obtain the real economies of scale required for big business (Griffiths & Wall, 2004). By 1986, GE became one of the 12 companies that were used by the DJIA (Dow Jones Industrial Average) to measure the stock index and after more than 112 years, it is the only company which remains on that index while all others have been replaced, acquired by other companies or simply been driven out of business. The historic value of the company can also be marked by the fact that its original headquarters has been noted as a historic place by the American government. GE did not stop at making light bulbs and continued to diversify its business interests through investments in Radio and modern electronics which were considered upcoming technologies at the time. After the world wars, GE found that it was heavily invested in defense since it had been used to help in producing aircraft and other equipment required by America (Welch, 2005). However, this also placed the company amongst the leaders of American business.