General Electric Under Jack Welch
John Francis Welch, Jr., also known as “Jack”, became the CEO of General Electric in 1981 and maintained this title for the next 20 years until his retirement in 2001. He was widely known as a “national business hero” because he had a different approach on management that provided increasing results. For this very reason, many also despised his tactics. He was very aggressive in cutting out the weak, because he believed that it was holding back the company. One of the main principles that General Electric emphasized was loyalty. After Welch took over, loyalty meant next to nothing. He led General Electric to become a highly profitable and successful firm, but a major question is how successful he was as a manager. Another concern would be about the way he treated his workers.
Chapter 5 of the textbook states that corporate social responsibility is “the corporate duty to create wealth by using means that avoid harm to, protect, or enhance societal assets.” According to this definition, General Electric may not have fulfilled this duty. 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 of.
Instead of using this “differentiation” technique, which discouraged workers and made the work environment extremely competitive, Welch should have approached this situation differently. There are many...
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