GE could have performed in a different way that could have been better and more socially responsible, and the company would still maintain its competitive advantage in the market. Instead of coming into the company with a “firing quota,” Welch could have evaluated employees and restructured the management hierarchy to include talented employees from other areas of the business. Employees with many years of experience should have been used to try and remedy employee productivity issues…
In April 1981, when Jack Welch became the CEO of GE, US was in recession. There were high interest rates. Strong dollar resulted in country’s highest unemployment rates. In this rapid changing and uncertain environment it was extremely difficult task for him to handle a conglomerate as big as GE and ensure that general confidence among the investors is not lost. His predecessor, Reg Jones, had set the bar extremely high at the company leaving a legacy for Welch to compete with as the new CEO. Also, acquiring new businesses and ensuring that each business unit under the GE umbrella was one of the best in its field was another challenge.…
Adversity breeds creativity, and this pending financial crisis led to a series of events that eventually turned this company around. From the financial perspective, the new leadership established quantifiable and achievable goals for this company. The first of which was to increase revenue at a faster rate than the market increased. Next, was to turn 30% of their revenue into operational profit. Lastly, they committed to doubling their earnings per share. All of these goals were ambitiously to be accomplished within 3 years, all the while improving on their customer relationships in a way that influenced their bottom line.…
In 1981, Jack Welch became the eight chairman and Chief Executive Officer of General Electric, and served until his retirement in September 2001. Under his leadership, Welch “increased the value of the company from $13 billion to several hundred billion” (ge.com, n.d.) What strategies led to the success of GE under the management of Jack Welch, and what does the future hold for the company?…
In the case, “The Jack Welch Era at General Electric”, indicate that during the period of Jack Welch was a CEO at General Electric from 1981 to 2001, the company became remarkable profit. Earnings per share rose from $.46 in 1981 to $1.07 in 2001. GE is a company which has a very long history, and Jack Welch was the first working-class person that finally became the famous manager in GE history. He changed and built lots of rules to fulfill his ambition to make the company more wealthy such as eliminated workers, changed GE’s culture by promoting the notion of a “boundary less” organization, used identical 20-70-20 percent curve to manage managers, and reshaped GE stocks. The story of the Welch years has the elements of legend, however, within GE businesses his powerful manage strategy turned him into a very controversial person. The lead editorial branded Welch as a corporate titan opposed to rules of society and said that his actions were “disastrous” for workers and communities.…
Jack Welch led the way that was authentic to him and what economic conditions valued at the time. He was successful by giving the company of GE a clear vision and opening up opportunities for employees to efficiently carry out his objectives. He gave stability to shareholders at a time of economic worry and more than doubled GE’s market cap. Although his practices deemed profitable he did not build internal company infrastructure that would carry GE into the future. Instead he weakened internal relationships and did not empower employees to use their talents to embark on new and innovative projects.…
Considering how large the organization is, employees of General Electric make up a large part of society. Welch’s plan of “closing 73 plants, selling 232 businesses, and eliminating 132,000 workers from GE payrolls” made a huge impact on these employees that lost their jobs. Welch did not consider the consequences of his actions, and how they affected the lives of those who dedicated many years of loyalty to General Electric. He made it mandatory to list the lowest performing 10% of each General Electric business, regardless of how successful their business was. This was a horrible way to evaluate the productiveness of each business. Time after time, the lowest 10% of managers were rid…
Bartlett, C.A., Wozny, M. (2005). GE’s two-decade transformation: Jack Welch’s leadership. Harvard Business Review, case 399-150…
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.…
Under CEO, Jeffrey Immelt leadership and cultural integration GE is committed to achieving worldwide leadership in each of its businesses. To achieve that leadership, GE's ongoing business strategy centers on five key growth initiatives: Technical Leadership; Services; Customer Focus; Growth Platforms; and Globalization. GE is committed to leadership in the "next generation" of technology. It's well-positioned to drive growth for the future with technical excellence in each business by developing a global technical capability, increasing new product growth, and investing in global research. GE services have grown from the traditional activities of parts replacement, overhauling and reconditioning machines to a larger and broader vision. The new vision includes investing in business and technology to improve the performance on its installed base and the way it actually services it. Through higher technology, it has the ability to go beyond servicing to reengineering the installed base. By doing so, it dramatically improved its customers' competitive positions. GE is in the midst of an incredible transformation brought on by the Internet explosion. Its pursuit of digitization will rapidly change its dealings with vendors, partners, and most of all, its customers. GE is using the integrated systems between Six Siqma and the International Quality Management System which adopted by TQM to keep on enhancing GE’s customer. GE’s Customer Focus is ensuring that everything it does provides value to our customers. It means creating a partnership that - combined with expertise in financial, service and technology industries - maximizes customer profitability and ensures quality. A key GE strength is the ability to conceptualize the future, identify "unstoppable" trends and develop new ways to grow. Growth is the initiative, the core competency in building at GE. The challenge is to coordinate the activities of these units and leverage their skills for the benefit of the…
When Jack Welch assumed as CEO of GE in April 1981, he had the challenge of revitalizing the competitiveness and productive competency of the company. In 1981 the economy was in a recession and high unemployment combined with high interest rates exacerbated GE’s problems. GE needed to be restructured and this entailed the modernization and streamlining of operations, downsizing the organization, reduction of payrolls and stringent efficiency measures.…
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.…
GE strategic planning objective is to increase its economies and at the same time to apply its advantages concerning company’s clients. There are three basic steps of gaining strategic planning within GE:…
First Wave (1981) - Create a unified vision and strategy for the entire company. All GE business had to fit within three categories (three circle concept)-…
Prior to year 2010, GE’s previous CEO, Jack Welch, had built GE into a highly disciplined, extremely efficient machine that delivered consistent growth in sales and earnings. However, after Immelt took over GE from Welch, Immelt recognized the necessity for strategic change in the GE when he took considering the situation of economic downturn. 9/11issue and Enron Scandal triggered a downturn in the economy, which in turn affected GE’s stock market price. Immelt saw little need to challenge the basic business model no which GE had operated for decades.…