CEO Case Study Analysis
Business Process Analysis and Innovation BUSU 630
Prof. John Besaw
October 8th 2012
General Electric CEO Case Study
The General Electric (GE) that Jeffrey Immelt inherited in 2001 was widely regarded as one of the world’s most successful companies of all time. It was the only company that has remained a member of the Dow Jones industrial index since the index was first created (Rowe & Guerro, 2010). It can be assess that throughout its history, it has been associated with near-continuous growth and above average profitability. GE was founded in 1892 from the merger of Thomas Edison’s Electric Light Company with the Thomas Houston Company. Its business was based upon exploiting Edison’s patents relating to electricity generation and distribution, light bulbs, and electric motors. During the twentieth century it became not only the biggest and most diversified industrial corporation in America, but “a model of management and strong leadership. With two decades under Jack Welch’s leadership, the company had only enhanced GE’s reputation for effective management and leadership. In 2001, Fortune magazine named GE as America’s “most admired company” for the fifth year in succession, and the Financial Times identified GE as the “world’s most respected company” for the fourth consecutive year. Further, when Jeff Immelt took over as Chairman and CEO of General Electric on September 1, 2001, he had no doubts that his predecessor, Jack Welch, a “living legend,” “best leader of the past half-century,” would be a tough act to follow (Rowe & Guerro, 2010). Research shows that investors had little hope that Immelt could ever match the incredible 50-fold increase in GE’s market value that Welch had achieved; the management community was more concern with the changes to the corporate strategy, organization structure and leadership & management systems that Immelt would incorporate into the company. Welch had been a revolutionary and an innovator. In demonstrating profound leadership abilities, Welch, had swept away most of GE’s carefully constructed structure and its greatly admired corporate planning system. He had relentlessly challenged GE managers for improved operational and financial performance; he had created a GE management style based upon his own personality, values, and beliefs. His management innovations at GE had exerted a huge impact upon management thinking and management practices throughout the whole corporate sector. Welch, demonstrated profound qualities utilizing the Path–goal theory which have special focus on assisting subordinates to get around, over, under, or through obstacles that are keeping them from achieving their tasks. Obstacles may be responsible for subordinates having feelings of frustration, uncertainty, and being threatened. Path–goal theory implies that leaders should assist subordinates in getting around these obstacles or in removing the obstacles from the path to task completion (Northouse, 2010, p. 131). In analyzing this case in comparison of the two CEO’s , it can be stated best that this is a decision making directive case, In which Welch, the managers did not always agree on how Welch conducted business, but his directive leadership style emphasized giving direction to subordinates regarding their tasks. These directions as demonstrated in the above analyses showed that results were expected, and generated how tasks will be accomplished, and the schedule for task completion. In addition, the leader clarifies performance expectations and explicitly outlines the required standard operating procedures, rules, and regulations. In similar terms, following Welch’s success, Immelt knew his number one priority was to restore the confidence of the investment community in GE and pay particular importance to the financial structure and financial reporting matters. In looking further ahead, Immelt...
References: Jeff Immelt Bio | GE CEO | General Electric Chief Executive. (2012). In Jeff Immelt, CEO. Retrieved October 7, 2012, from http://www.ge.com/company/leadership/ceo
Northouse, P.G. (2010) Leadership: Theory and practice, (5th ed) Thousand Oak, CA: Sage.
Rowe, W. G., & Guerro, L. (2010). Cases in Leadership (2nd ed., p. 211, 221).
Thousand Oaks, CA: Sage.
Swink, M., Melnyk, S.A., Cooper, M.B., and Hartley, J.L. (2011). Managing Operations across the supply chain. New York, NY: McGraw-Hill/Irwin
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