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General Electric Co plans to test a new management model in India that the largest U.S. conglomerate believes will help it flourish through a long period of sluggish post-recession growth in developed markets.

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Rather than taking its high-end, high-cost equipment and finding ways to make it less expensive for developing-world customers, GE needs to focus on designing lower-cost technologies that will appeal to customers in emerging markets, Chief Executive Jeff Immelt argued in an article published on Tuesday in the Harvard Business review.

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Doing so might mean breaking away from the management approach the world's largest maker of jet engines and electricity-producing turbines has relied upon for years -- having enormous, product-focused divisions that span the globe -- in favor of smaller, country-focused teams, Immelt wrote in an article titled "How GE is Disrupting Itself."

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The shake-up is intended to boost GE's chances of success in emerging markets. The Fairfield, Connecticut-based company expects those areas to expand two to three times as fast as the United States and Europe, where it sees 1 to 3 percent growth for the next few years.

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"Success in developing countries is a prerequisite for continued vitality in developed ones," Immelt wrote in an article co-authored with Dartmouth University professors Vijay Govindarajan and Chris Trimble. "If GE doesn't come up with innovations in poor countries and take them global, new competitors from the developing world -- like Mindray, Suzlon, Goldwind and Haier -- will."

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He noted that GE's revenue in China is on track to grow by 25 percent this year -- a sharp contrast to the 15 percent drop in companywide revenue for which Wall Street is braced.

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The company plans to appoint a CEO of its Indian operations, though it has not yet named that person, according to spokeswoman Lisa Lanspery.

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HEALTH CARE MODEL

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The Indian model will be a broader test of an approach the company's health care arm used in China, where it developed a $15,000 laptop-based ultrasound machine that sells for a fraction of the $100,000-plus of the appliance-sized units it sells to U.S. hospitals.

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"With far smaller per-capita incomes, developing countries are more than happy with high-tech solutions that deliver decent performance at an ultra-low cost -- a 50 percent solution at a 15 percent price," Immelt wrote.

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The reasoning is that local executives will have a better chance of finding niches in local markets and filling them than would engineers sitting at the company's main research center in Niskayuna, New York.

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Govindarajan, who also serves as GE's chief innovation consultant, said the shift from a global management model to a national one is not without risk.

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"It is a risky move, but this is the way I would put it: If you don't do it, it is a lot more risky," Govindarajan said in an interview. "Then what happens is a local competitor in India will create those products, those radical solutions ... Then they will come after GE in their home market."

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GE, for instance, found an unexpected market for its portable ultrasound machines in U.S. ambulance crews.

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Govindarajan also noted that the company would likely need to set up country-specific autonomous management chains only in a handful of fast-growing economies, not in every nation where it does business.

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"Right now this approach is needed only selectively in strategic markets," Govindarajan said. "It is really half a dozen or less countries. Those are where, for the next 25 years, the big opportunities are."

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