Final answer:
The primary rationale for Jeffrey Immelt holding both CEO and chairman roles at GE is the efficient alignment of corporate strategy with shareholder interests, facilitated by streamlined decision-making due to consolidated leadership roles.
Step-by-step explanation:
The primary rationale supporting the duality of Jeffrey Immelt serving as both CEO and chairman of the board at GE is rooted in the theory of managerial control over board selection and the advantages of unified leadership. In this scenario, having a CEO who is also the chairman can create a more streamlined process for making decisions that purportedly align with shareholder interests. The CEO has significant influence in choosing board members, which can, in theory, reduce conflicts and ensure that both the board and the executive team are strategically aligned. Furthermore, a CEO with the additional role of chairman may have greater authority to swiftly implement policies and strategies without the delay of board approval, leading to potentially more efficient corporate governance.
However, critics argue that this duality can lead to a concentration of power that may not always result in decisions that are in the best interest of shareholders or other stakeholders.In terms of shareholder and stakeholder theories, a CEO who is also a chairman may more effectively drive a company's strategy towards profitability, thereby satisfying the principle of shareholder primacy. Yet, from a stakeholder perspective, this concentration of power could potentially sideline other stakeholder interests if those interests conflict with shareholder returns.