GE'S Two-Decade Transformation: Jack Welch's Leadership
Jack Welch finally seemed happy at General Electric's Annual Meeting in March 1999. Their operating margins were at an all-time high at 16.7% and their revenue exceeded $100 billion. The Financial Times named General Electric two years in a row the "Most Respected Company in the World." For any company this is a huge accomplishment and a great recognition. The Fortune poll voted them the country's "Most Admired Company." The shareholders were somewhat concerned about Welch's rumored retirement at the end of the year 2000. No one was sure if anyone would take Welch's place and keep the financial growth that occurred during Welch's era as leader for General Electric.
Thomas Edison founded General Electric in 1878. The company's early focus was on the generation, distribution, and use of electrical power to become one of the world's biggest industrial companies. It would take them one hundred years to accomplish this but they would. General Electric was always going through change all the way through the early 1900s and into the mid 1900s. To strengthen their corporate staffs they began to use "profitless growth." By 1973 General Electric had ten groups, forty six divisions, and one hundred and ninety departments. And they had forty three strategic business units that were designed to support strategic planning. Reg Jones, who was Welch's predecessor, had been voted three times by his peers as CEO of the Year.
Welch was forty five when he became CEO of General Electric in 1981. He took the company over at somewhat of a rough time. The U.S. economy was in a recession. The recession resulted in the country's highest unemployment rates since the Depression. Welch's early priorities would be extensive restructuring of General Electric. Welch's encouraged all of this employees to be "better than the best." Over the next five years General Electric under the command of Jack Welch...
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