Situation General Electric is a highly successful U.S. conglomerate that was founded when Thompson-Houston Electric and Edison General Electric merged in 1892. One of its most ambitious leaders, Jack Welch, became CEO in April of 1981. He immediately restructured the company and invested $75 million in an upgrade at the management development center. He became known as the “toughest boss in America” who was known to systematically fire the ten percent of his work force who were deemed least useful by their managers. Creating the Best Practice movement and Work Out (meetings that aided in brainstorming solutions to company problems) were innovative programs that helped him catapult GE toward success. He retired after two decades as GE’s CEO and nominated Jeffrey Immelt as his successor. Jeffrey Immelt became the ninth man to lead General Electric in 2001. He abandoned Welsh’s leadership approach and was said to be “less a commander than a commanding presence” (Rowe and Guerrero, 2013, p. 190). He focused on long term strategies rather than setting pinpoint earning targets, as his predecessor had. By aiding service growth in some of the company’s divisions and investing strategically, Immelt achieved unprecedented revenue growth in key foreign markets. This situation is best described as an evaluation case, rather than a decision or problem.
Questions
Some of the key questions in this case are:
1. What parts of Jack Welch’s leadership strategy were effective? 2. What mistakes did Jack Welch make that Jeffrey Immelt should avoid?
Hypothesis
By learning from Jack Welch’s leadership style and improving on his mistakes, Jeffrey Immelt can ensure the growth and success of General Electric.
Proof and action
Welch was a highly competent and successful leader whose business strategy helped grow GE’s market capitalization by 27 times (Rowe and Guerrero,