Ge Case - Jack Welch

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Question #1
How difficult a challenge did Welch face in 1981? How effectively did he take charge?

When Jack Welch took over as CEO of GE in April 1981, the world was in a recession. GE needed to be restructured, and this involved restructuring, reduction of its payroll and modernization.

Jack Welch adopted a strategy of “Fix, Sell or Close”. This strategy enabled GE to exit unprofitable businesses and restructure loss-making businesses into profitable businesses.

Jack Welch’s management technique adopted the following philosophy • Empowering employees at all levels of the organization • Goal setting to ensure every employee was accountable for his/her actions • Communicating his new goals and visions through the entire organization

Empowering Employees: GE was ridden with bureaucracy, as a result employees found great difficulty in communicating with one another. Welch addressed this issue by eliminating whole layers of management, consolidating overlapping jobs and business units, and forcing employees at every level to take more responsibility for their own work.

Goal Setting: Welch had a philosophy called based on opportunism, whereby GE employees were given far fetched goals, and permitted to do whatever it took to reach the target. This imbibed a more aggressive culture in the entire organization

Communication: Jack Welch removed unnecessary communication filters to ensure his vision was communicated effectively throughout the organization. He ensured that his vision was communicated by a series of training programmes. He encouraged input from every employee. This made the organization more effective and gave Jack Welch charge of the situation at GE

Question #3
How does such a large, complex diversified conglomerate defy the critics and continue to grow so profitably? Have Welch’s various initiatives added value? If so, how?

Strong leadership is the essence of driving any business conglomerate. Through his leadership,...
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