Description: General Electric under Jack Welch
GE should have applied their corporate social responsibility duty as stated by General Robert E. Wood in the Sears Annual report for 1936; he said “the chief constituencies of the company—customers, the public, employees, sources of merchandise supply, and stockholders. Stockholders being last as they could not attain their “full measure of reward” unless the other groups were satisfied first.” Ironically, after Welch’s retirement, he stated in an interview with the Financial Times on the Global financial crisis of 2008-2009, “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy... your main constituencies are your employees, your customers and your products.” However, during the Welch era, this did not occur. Welch established a major reconstruction structure to eliminate bureaucracy and geared management towards a performance goal culture. He introduced a new doctrine of weeding out poor performance and discovering an “all-star” management. With this tactic it was clear that Welch did not care or underestimated the welfare of the society that impacted this decision. During his last 15 years with GE, at least 150,000 jobs were eliminated. He even stated in his memoir that “I never underestimated the human cost of those layoffs or the hardship they might cause people and communities”. When Welch ranked employees on the vitality curve, instead of dismissing the bottom 10%, and coached the middle 70%, he should have offered training initiatives to help improve the bottom’s work performance to suit its job description. A lot could have been offered to these individuals for improvement. Motivation is one key example to offer, it would have help to achieve the organization’s objectives while also working to achieve personal objectives. Instead scare tactics were used and Welch was cutthroat with managers to...
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