1. You may have seen the terms “e-business” before. Do some research and briefly indicate why you think that this term better defines what GE did rather than “e-commerce”
GE’s CEO, Jack Welch, once described their e-business as, “an elixir, a tonic that has changed the DNA of GE forever.” (Bartlett, 2002) During Welch’s final years as CEO, he was faced with the strategic decision of introducing GE onto the internet. GE Plastics had already begun using the internet as a way to conduct business and Welch used this division as a building block for the conversion to a digital workplace. The difference between GE and so many other companies is their competitive culture and their drive to succeed. Therefore, when Welch introduced his fourth strategic initiative, embracing e-business, he expected the best from his employees, set far-reaching goals, and demanded that all of GE’s large divisions begin to develop their own website. Welch’s expectations and the scope of the fourth strategic push is what differentiate GE’s term of “e-business” from “e-commerce.”
As Welch began to realize the potential the internet could have on GE’s businesses, he encouraged all the business leaders to get a mentor to help them understand this potential. He also required regular meetings of all business division heads so they can learn from what other managers experienced as well as create ideas to overcome obstacles. Since GE sees failure as unacceptable, Welch wanted to give his full support to the company during this transition. To motivate employees, Welch used a strategic exercise called Destroy Your Business (DYB) where “Each unit of the organization visualized how it might be crushed by the dotcom juggernaut, on former CEO Jack Welch’s premise that if a company didn’t identify its own weaknesses somebody else would do it for them.” (Schwartz, 2011)
Through this exercise, the business units discovered the benefits of using the internet. Soon the DYB exercise turned into “Grow Your Business” and helped GE stay on top during the dot.com era. Welch and his management team realized that for GE to really benefit from this change he had to focus the strategy on three initiatives: e-buy, e-sell, and e-make. These three initiatives changed the make-up of the 124 year-old company. Not only did they offer customers a new way to buy and sell products, but it also changed the back-office routines. Creating an intranet for each department made processes more efficient and effective, “It took the costs out of our internal processes while continuing to grow our business on the outside. Judging by the company’s numbers (GE hit its second-quarter earnings on the nose), its investment in digitization was paying off in spite of the economy.” (Schwartz, 2011)
From the case study and the research our team has done, the main difference between “e-business” and “e-commerce” is the extent to which it changes a company. Welch took the idea of “e-commerce” and grew it into something that stretched across all of GE’s businesses internally and externally. Welch’s final strategic initiative helped the company with cost savings, increasing customer satisfaction, improving quality, and building a strong web-based sector that has helped GE continue to be successful in the future.

2. Think about the models of leadership presented in the first case study of HP and this GE case study. If leadership is defined as accomplishing goals with people (see Ambrose excerpt, Session 1 Resources), analyze the differences and/or similarities between Fiorina and Welch (and other leaders in the case studies if you wish) as they worked to change organizational culture and organizational processes in their respective companies. Do their leadership methods explain successes and failures? Give examples throughout your answer.

Both Welch and Fiorina recognized that their organizations needed a change. They were similar because they both took on the initiative to reorganize a global long standing company. The team concludes that their ability to face the challenge makes them both courageous.

They were different because Fiorina’s change was more radical; she tried to implement an organizational change that was totally different from the core values that the company was accustomed to better known as the HP Way. She promoted a top-down culture that did not stand a chance in a postindustrial world (Jacobson, 2012). A top-down culture can be viewed as “authoritarian oppression and control, which only enhances resistance and breeds short-term compliance rather than long-term commitment” (Long, 2009, para.11). This was a contradiction to the innovative and creative atmosphere that the company warranted. Instead of moving beyond the times she was taking the company back in time whereas Welch was directing GE toward the future with his E-business organizational change as described in the first answer of this analysis.

Unlike Fiorina’s process Welch actually got the employees behind his plan towards change. He utilized Kotter’s Eight Step approach by relaying a sense of urgency that the company was in need of a change to soar into the technology age. Instead of dismissing the employee’s value and old company policy he built on it by implementing a strategy that focuses on four key initiatives; WorkOut, Six Sigma, Services, and Digitization. The WorkOut strategy has been a part of GE’s initiative since the early 1980’s. Welch did not dismiss the initiative because apparently it works. Instead of taking all of the power of the company he delegated responsibility to managers and shared decision making with all levels of employees (even warehouse workers).

If leadership is defined as accomplishing goals with people Fiorina’s leadership explains the failures the company experienced. Instead of building from the company core values and keeping the cohesive relationship between employees and management she basically destroyed the culture. It has been said that she “asked employees to make sacrifices - including giving up their profit-sharing plan - she took more than $100 million in pay and perks” (Burnett & Gimon, 2010, para.6). It is also evident that her approach is considered as a failure by the reputation that she left behind.

Welch’s leadership method explains the success that GE has had with the E-Business approach. Goals were set and accomplished collaboratively. Gathering GE’s top 500 managers and generating the “Destroy Your Business” initiative got the managers involved and engaged. That type of engagement welcomes the organizational change and gets the employees on board. His success can be measured by the success of GE and his own reputation as being an “admired business leader” ("Jack Welch," 2012).

3. Finally, at the end of the case, Podesta, Reiner and Welch need to decide what to do with their e-initiative guiding teams (remember that these are people that have sort of left their normal functional jobs to participate as team members driving the change). Should they be disbanded? What would you advise them?

After the e-initiative guiding teams are done, Podesta, Reiner, and Welch have to decide what to do with the team. It is important to keep this team together. Although GE Plastics was extremely successful, the rest of GE was into e-business as much. The e-initiative team had put so much of their career into this initiative. With all of the knowledge that the team learned while on the project, this team would be able to lead on other e-initiatives.

Welch was known as an admired business leader. One reason that he was admired was because he had the employees have a say in decision making (Jack Welch, 2012). As a team we would suggest the culture of GE remain the same and bring other people into the e-initiative guiding teams. This will help keep thing innovative by adding more ideas by even more diverse teams. Throughout Welch’s years at GE, he was well-liked by the employees because of his leadership style, and it is important for employees to stay on board with all decisions being made. By keeping employees involved in the decisions, Welch is showing them that their thoughts matter while also providing a sense of accountability.

Welch helped build the culture of GE by giving employees the choice to voice their opinions (Jack Welch, 2012). Employees who are happy in their position are more likely to want to grow in the company. Also, by engaging employees, Welch was able to keep them happy (Gallo, 2008). Welch has made it a point of his career to keep employees engaged and happy, and that is what has made him such a successful leader. This is why it will be important for Welch to keep employees involved in this huge decision for their career.