The GE Paradox: Competitive Advantage Through Fungible Non-Firm-Specific Investment

This study addresses two questions: (a) Does General Electric have an exceptional ability to develop non-firm-specific general management talent, and (b) how can GE’s investment into non-firm-specific, nonproprietary managerial capabilities be explained theoretically? The authors’ analysis provides evidence that GE has an extraordinary managerial development capability. Their theory suggests that GE’s managerial development process is valuable, rare, inimitable, and organized to be exploited, and therefore, a source of sustained competitive advantage. This process produces a flow of managers with the potential to be sources of temporary competitive advantage for GE. Outward flow of executive talent is a required byproduct of the process.