A. Problem Statement
GE’s financial health and growth rates are no longer climbing at exponential rates due to the stark differences and change of leadership, goals and strategies between Welch and Immelt, specifically as their leadership translates to their subordinates.
B. Identification of Problem Causes
According to the Path-Goal Theory of Leadership, Welch displays the characteristics of participative and directive leadership. His strengths are in his clear vision and strategy, ability to motivate employees, open communication and aggressive leadership style. On the other hand, Immelt’s style is more in like with the supportive leadership style. According to the case, “In contrast with Welch’s need to control and cajole his management, Immelt was less a commander than a commanding presence. If you, say, missed your numbers, you wouldn’t leave a meeting with him feeling beat up but more like you let your dad down,” said Peter Foss, a long time friend and colleague of Immelt’s.” This difference in leadership style did not easily translate into the corporate culture inculcated by Welch creating dissonance, thereby leading to a decrease in relative growth rates.
Moreover, Immelt and Welch both have different strategies, visions, objectives, and ultimately disparate goals. This change of direction can cause confusion amongst subordinates and spread company wide.
C. Listing of Possible Alternatives to Solve Problem Alternative 1: Do nothing
Pros: Immelt's disappointing growth rates and financials may be isolated events due to externalities beyond his control, such as, 9/11 and the economic recession. His leadership style, if given ample time, may be the kind of change that is needed to take GE into its next growth phase. His goals and focus on long term strategy and development of "specialists" which would eventually lead to the competitive edge.
Cons: Immelt's goals include international development into the...
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