Effective Strategic Leadership.
Assessment of Jack Welch as a strategic leader (max 10)
| Establish firm economically
| Determine and communicate strategic direction
| Competitive advantage
| Acquire, develop and manage resources
| Oversee formulation and implementation of strategies
| Greater value creation
| Establish and manage stakeholders
| Establish balanced control
| Higher firm performance
| Responsibilities of leader based on perspectives
I/O Economics: Position firm economically
It is difficult to apply industrial organization model to GE because at the time Jack Welch stepped in as a CEO the Company was so complex and diversified that it is difficult to assign it to particular industry and therefore base managerial decisions based on this perspective but Jack developed his famous three-circle vision where he divided a company into 3 sectors Services, Technology, Core (+ Outside, support and ventures) that helped to frame the objective of the Company’s growth. Positioning the firm means clearly define a firm’s strategy. From the first year as a GE’s CEO Welch was stating clear objectives for the Company’s performance (Ex: #1, #2 or disengage; Fix, sell or close) after establishing strong base in US Jack went Global. Jack did a great job looking at the future up to his retirement leaving a company with a new successful trend for doing business in internet. The downside of it could be that GE was too diversified. There is an opinion that GE parts worth more than the whole company and it will be more effective to split it up. Resource-based perspective: Acquire, develop and manage resources. Welch was successfully managing the firm resources by reallocating firm’s capital by selling poor performing businesses and acquiring more successful ones. Through downsizing, destaffing and delayering GE Welch releases resources that set the...
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