Ge Transformation
BUSINESS POLICY & STRATEGY
Case Study – 'GE’s Two-Decade Transformation: Jack Welch’s Leadership'
Prepared by
Group 12 – Div A
Team Members 1. Aanad Menon 2. Adit Paul 3. Anirban Majumdar 4. Girish Patel
Q.1) Jack Welch launched a number of initiatives on taking charge of GE in 1981. Was there a strategy driving the initiatives? Were the initiatives effective in accomplishing what Welch was aiming for?
When Jack Welch joined the GE, there were many challenges in front of in terms of US economy recession, high interest rate, high inflation rate and the highest unemployment rate including the high standards raised by his predecessor CEO. He made following strategic changes to deal with the challenges.
#1 or #2: Fi x, Sell , or Close * Welch set the standard for each business to become #1 or #2 competitor in its industry. GE freed up around over $11 billion of selling of more than 200 businesses. GE also made over 370 acquisitions, investing more than $21 billion. * He insisted upon making GE “Lean and Agile” resulting in highly disciplined destaffing process across all major headquarters groups. The strategic planning staff of 200 people was reduced by 50% and the remaining were replaced with “real time planning” and built around a five page strategy playbook. * He reduced the number of hierarchical levels from nine to four. He adopted strategy of downsizing, destaffing and delayering and eliminated 12450 jobs. Through divestiture he again eliminated an additional 122700.
The initiatives were remained very much effective as evident from the numbers. During this period, GE’s performance improved in terms of revenues – from $27.2 billion (1981) to $29.2 billion (1985) and operating profit - from $1.6 billion (1981) to $2.4 billion (1985)
Q.2) In the late 1980’s and early 1990’s, Welch launched a new set of initiatives. Again, what was Welch trying to accomplish? How strong was the fit between strategy and
Case Study – 'GE’s Two-Decade Transformation: Jack Welch’s Leadership'
Prepared by
Group 12 – Div A
Team Members 1. Aanad Menon 2. Adit Paul 3. Anirban Majumdar 4. Girish Patel
Q.1) Jack Welch launched a number of initiatives on taking charge of GE in 1981. Was there a strategy driving the initiatives? Were the initiatives effective in accomplishing what Welch was aiming for?
When Jack Welch joined the GE, there were many challenges in front of in terms of US economy recession, high interest rate, high inflation rate and the highest unemployment rate including the high standards raised by his predecessor CEO. He made following strategic changes to deal with the challenges.
#1 or #2: Fi x, Sell , or Close * Welch set the standard for each business to become #1 or #2 competitor in its industry. GE freed up around over $11 billion of selling of more than 200 businesses. GE also made over 370 acquisitions, investing more than $21 billion. * He insisted upon making GE “Lean and Agile” resulting in highly disciplined destaffing process across all major headquarters groups. The strategic planning staff of 200 people was reduced by 50% and the remaining were replaced with “real time planning” and built around a five page strategy playbook. * He reduced the number of hierarchical levels from nine to four. He adopted strategy of downsizing, destaffing and delayering and eliminated 12450 jobs. Through divestiture he again eliminated an additional 122700.
The initiatives were remained very much effective as evident from the numbers. During this period, GE’s performance improved in terms of revenues – from $27.2 billion (1981) to $29.2 billion (1985) and operating profit - from $1.6 billion (1981) to $2.4 billion (1985)
Q.2) In the late 1980’s and early 1990’s, Welch launched a new set of initiatives. Again, what was Welch trying to accomplish? How strong was the fit between strategy and