51-605-60 MBA Organizational Leadership and Behavior
Fall 2011, Term 1
Modern Business Leader Analysis Project
Instructor: Dr. Constant Beugre
Jack Welch’s accomplishments
Jack Welch joined General Electric (GE) in 1960 and became vice president (1972) and then vice chairman (1979). In 1981 he became chairman and CEO of GE; at 45, he was the youngest person ever to have held that position. Having taken GE with a market capitalization of about $12 billion, Jack Welch turned it into one of the largest and most admired companies in the world, with a market value of about $500 billion, when he stepped down as its CEO 20 years later, in 2000. (Reference for Columbia Encyclopedia) Welch took bold actions to improve GE's ability to compete globally before it ran into serious difficulty. Welch leads two different "revolutions" in his tenure as CEO. The first revolution had to do with hardware: what businesses GE should be in and what businesses it should divest. Welch quickly changed GE's approach to strategic planning. The matrix approach developed under Reginald Jones was replaced with Welch's Number One Number Two strategy. If a GE business wasn't first or second in its markets worldwide, or couldn't be made' so, it would be sold. At the start of Welch's tenure GE administration was built around three hundred separate businesses, a recipe for inefficiency. Welch tore into the ossified corporate structure with a vengeance and by the mid-1980s had overseen nearly 120,000 layoffs and earned the nickname "Neutron Jack." The name was derived from the neutron bomb, a weapon designed to minimize heat and blast effect but maximize dispersal of lethal neutron radiation—in effect, eliminating people but leaving buildings and equipment intact. (Reference for The New GE) By 1985, billions of dollars had been made or saved through sales and layoffs. Welch sought...
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