...Jack Welch is undoubtedly one of America’s most controversial and influential business leaders of the 20th century. During Welch’s 20-year reign as CEO of General Electric, from 1981 to 2001, the company underwent great change and saw immense growth and profitability, becoming one the most valuable companies in the world. Fortune magazine even hailed that under Welch, GE was “the best-managed, best-regarded company in America.” However, despite Welch’s strong leadership, the frequently debated question is, did GE fulfill its corporate social responsibility during his tenure. According to chapter 5 in the text, corporate social responsibility (CSR) is defined as, “the corporate duty to create wealth by using means that avoid harm to, protect, or enhance societal assets,” and by this definition GE under Welch failed to fulfill its duty of corporate social responsibility. While during the Welch era GE was successful in achieving a corporation’s primary economic responsibilities, generating immense profits, sharing the wealth with shareholders, and paying taxes, it did so in a way that did not protect societal assets, or avoid harm to the environment. GE failed to fulfill its duty of CSR by causing environmental damage in areas where the company manufactured its products. The prime example of this is GE’s 35-year pollution of the Hudson River in New York. Between 1945 and 1977, GE is accused of releasing approximately 1.5 million pounds of a toxic substance known as polychlorinated...
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...GE’s Two-Decade Transformation Case Analysis March 17, 2005 For: Anne Becker From: Scott Ashby 999004953 Phil Parkinson _ Judy Lee 04003094 Gianni Liburdi 049003649 Executive Summary This report’s objective is to provide analysis of the leadership challenge that General Electric (GE) is currently facing, and to recommend solutions. The primary problem is determining what kind of candidate is required to replace retiring CEO Jack Welch. This has left GE to question how much does the company want to change policy over the previous era, and where does the company want to be in future? Detailed examination of the impact Jack Welch has had as CEO over the past twenty years reveals a leadership style that is the driving force behind a successful transition from a corporate model that was highly centralized and bureaucratic to one that is dynamic, flexible, and many times more profitable. If GE wishes to sustain and build upon the progress of the Welch era, it would do well to nominate a new CEO from within the organization who is familiar with his brand of leadership, and who can continue to provide it for many years to come. 2 Table of Contents Executive Summary................................................................................................................... 2 Table of Contents ....................................................................................................................... 3 Statement of Problem ...........
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...GE’s Two-Decade Transformation Case Analysis March 17, 2005 For: Anne Becker From: Scott Ashby 999004953 _ Phil Parkinson Judy Lee 04003094 Gianni Liburdi 049003649 Executive Summary This report’s objective is to provide analysis of the leadership challenge that General Electric (GE) is currently facing, and to recommend solutions. The primary problem is determining what kind of candidate is required to replace retiring CEO Jack Welch. This has left GE to question how much does the company want to change policy over the previous era, and where does the company want to be in future? Detailed examination of the impact Jack Welch has had as CEO over the past twenty years reveals a leadership style that is the driving force behind a successful transition from a corporate model that was highly centralized and bureaucratic to one that is dynamic, flexible, and many times more profitable. If GE wishes to sustain and build upon the progress of the Welch era, it would do well to nominate a new CEO from within the organization who is familiar with his brand of leadership, and who can continue to provide it for many years to come. 2 Table of Contents Executive Summary................................................................................................................... 2 Table of Contents ....................................................................................................................... 3 Statement of Problem ...............................
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...GE’s Two-Decade Transformation Case Analysis March 17, 2005 For: Anne Becker From: Scott Ashby 999004953 _ Phil Parkinson Judy Lee 04003094 Gianni Liburdi 049003649 Executive Summary This report’s objective is to provide analysis of the leadership challenge that General Electric (GE) is currently facing, and to recommend solutions. The primary problem is determining what kind of candidate is required to replace retiring CEO Jack Welch. This has left GE to question how much does the company want to change policy over the previous era, and where does the company want to be in future? Detailed examination of the impact Jack Welch has had as CEO over the past twenty years reveals a leadership style that is the driving force behind a successful transition from a corporate model that was highly centralized and bureaucratic to one that is dynamic, flexible, and many times more profitable. If GE wishes to sustain and build upon the progress of the Welch era, it would do well to nominate a new CEO from within the organization who is familiar with his brand of leadership, and who can continue to provide it for many years to come. 2 Table of Contents Executive Summary................................................................................................................... 2 Table of Contents ....................................................................................................................... 3 Statement of Problem ...............................
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...Entrepreneurial School of Thought This school sees strategy formation as a visionary process and is fell under the descriptive school of strategic management. The chief architect of the strategy is the CEO of a company. This school took formal leadership seriously and CEO is responsible for strategy formulation. It stressed on mental state and processes such as instinctive knowledge, belief, wisdom, experience and insight of a single leader. The leader should be visionary in formulating strategy. The entrepreneurial school promotes strategy as a process which has a clear image and sense of direction which can be termed as a vision. Entrepreneurial strategy often occurs in startup companies and organizations in trouble and needing a turnaround. For any organization to sustain success it must engage in some form of entrepreneurial activity in order to effectively compete in the marketplace and continue to increase stakeholder value. In this school the organization becomes responsive to only one person, the CEO and vision is the central concept of this school. Vision is the mental representation of a leader and it outlines what the organization wants to be or how it wants the world in which it operates to be. It is a long term view and concentrates on the future. It can be emotive and source of inspiration. It serves as a guiding idea and often tends to be a kind of image than a fully clear plan. Visions are often flexible so that the leaders can change them as they like. Visionary...
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...Kanwei Pang UG8723 MGMT 4500 Case Report: The Jack Welch Era at General Electric During Jack Welch’s two decade tenure as CEO of General Electric that started in 1981, he had many notable accomplishments in GE's history; he fulfilled the company's primary economic responsibilities to society by serving customers worldwide and stimulating the economy. But as such big company, there were opposing views to his social responsibility tactics, many supported him and many did not agree with him. According to the article, I believe GE’s CSR can be analyzed from following aspects. First of all, GE in the Welch era sustained exceptionally high rate of profitability to its shareholders that boosted economic growth- market actions. “Earnings per share rose from $0.46 in 1981 to $1.07 in 2000, his last full year as CEO, the total return in GE share averaged 21.5 percent”. These high figures turned GE in to a glorious era, and definitely enriched its investors by high rate of dividends. Secondly, GE in the Welch years also fulfilled its economic responsibility to society by paying huge amount of taxes. As a result of GE’s remarkable success and profitability at the time, they paid out a significant sum of money in the form of taxes which contributed to improving the basic needs of society. The company also pressured government to lower taxes and lower budgets for schools. Moreover, GE engaged a lot of social activities – voluntary actions that clearly fulfilled its duty. The GE foundation...
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...Judd MGMT 320 10/17/2013 General Electric under Jack Welch A top 10 Fortune 500 company in 2013, General Electric is expected by many to display significant responsibility towards its surrounding environment and society. Taken over by John Francis Welch in 1981, GE developed from a profitable manufacturing company to an immensely profitable company that revolved its activities mostly around the provision of services, during his 20-year tenure. Even though a corporation has a number of duties it should carry out in order for it to be considered responsible—and GE had many--the fact remains that its first and most important duty is to be as profitable as possible; thus, the Welch era GE did fulfill its duty, although certainly not entirely or up to the best of its capabilities. This is exemplified by the fact that, by the end of his tenure, earnings per share raised from $0.46 to $1.07; in the 10 year period following his retirement, the same earnings decreased by 54%. One of the main issues Welch’s critics have with his leadership methods refer to the losses of jobs that occurred while he was the CEO of the company, around 120,000. However, these were the result of his emphasis on efficiency and performance as well as a global approach to business that would reduce production costs. Given a highly competitive marketplace, his actions should certainly be understandable. Undoubtedly, the demeanor GE displayed under Welch can be perceived as an expansion of Milton Friedman’s...
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...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)...
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...Electronics, GE Medicals, International Marketing • Elected as CEO to begin tenure in September 2001 • Different personality from J. Welch - Easygoing, friendly, natural charisma (lead by example) cf. Jack Welch :Brash, Impetuous, abrasive, feisty (dictatorship) Jeff, breakthrough in the CEO Factory? CEO Process Implementation Long Term Planning CEO Candidacy Programme for an emergency, 1994 CEO Candidates 24 survived Management Development and Compensation Committee Appraisal on Personality and ability(1-2 yrs) 8 Board members collective interviews Management Ability Test (3-4 yrs) Job rotation in divisions - One of final three candidates - designate backup Decision Merit (TO/Profits) check and CEO interview - young, expansive thinking Time consumed 6 years 5 months 1. Tracing Young Turks - Scanning high - potential cases 2. Global Mgt Capability - Leadership, Strategy - Human Resource 3. Crisis Capability - Adversity - Venture, New Area 4. CEO Candidate - CEO School - Competency 5. CEO Cultivation Team - Professional Support - Mentor by J. Welch Immelt’s Narratives • Repositioning the portfolio and diversification – From a process oriented company to creativity and fundamentals – Emphasizes organic growth rather than deals, divesture (Necessity after Welch’s era) • Innovation Management – “Imagination Breakthroughs” for sustainable growth • New Ethical policy (Core Value) and its connection...
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...Energy, Finance for both Business and Consumers, Rail, Software Services and Water. They are now one of the most diversified companies in the world. Findings In 1960 Jack Welch joined General Electrics in the plastics division in Pittsfield, Massachusetts, USA, where he developed his leadership skills and ideas. In 1968 Jack Welch was made the company’s General Manager; for GE in 1981 he was elected Chief Executive Officer. His vision was to become one of the most competitive business enterprises in the world. Shortly after Jack was elected he identified the organisation was bureaucratic - the environment was controlling, upper management made the rules and the juniors followed. The lower level in the hierarchy is controlled by the upper ones, and the planning and decision making is done in one place. The higher levels in the hierarchy have more freedom in doing their work as compared to the lower levels. In this case GE was represented by 9 layers of management from the shop floor to the CEO. Unfortunately in a bureaucratic environment people are afraid to speak out; employees find it difficult communicating with each other, and as a result the work is not productive. Analysts projected that GE would become unprofitable by the end of 1982 if the company was not dramatically reconstructed. Jack Welch needed to change the culture of the organisation; he wanted to create a culture of openness, confidence, leadership and creative thinking. His goal was to lead and not manage...
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...Jack Welch is one of the most successful business leaders in the world. He spent 40 years at General Electric. He retired in 2001 after spending 21 years as chairman and chief executive officer. His nickname at GE was Neutron Jack, because of the fact that 118,000 people left the company in his first 5 years at chief executive officer. Since he retired from General Electric in 2001, he has traveled the world giving speeches and lectures to business audiences. In his book, Winning, Jack Welch tells his story on how to win in business. Jack Welch wrote Winning after speaking to audiences all over the world. He summarizes the most frequently asked questions he has received over the years. The book is broken out into 5 main sections; Underneath It All, Your Company, Your Competition, Your Career, and Tying Up Loose Ends. In the first section, Underneath It All, Jack Welch talks about mission and values, candor, differentiation, and voice and dignity. Throughout his book, he talks about how other companies operate. One of them is Bank One. One of their values is “We treat customers the way we would want to be treated.” They identified some behaviors that made the value come to life. Some of them are: • Never let profit center conflicts get in the way of doing what is right for the customer. • Give customers a good, fair deal. Great customer relationships take time. Do not try to maximize short-term profits at the expense of building those enduring relationships...
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...that taught me some of the most important qualities of business… solving Customer problems with a smile, turning a manufacturing (cost) problem into a new innovative solution and embracing the fact that you’ll learn much more working with folks on the front line than you’ll ever learn in a classroom. Later on it became more about people and teams… everyone comes to work wanting to do a good job, and my job is to knock down those barriers that get in the way. I’ve also learned that conflict is a good thing, when openly addressed and carried to resolution. In almost every case, both (or all) parties benefit and grow stronger, as individuals and as Teams. In these later years I’ve learned to agree with what retired General Electric CEO Jack Welch said, “Before you become a leader, success was all about growing yourself. When you become a leader, success is all about growing others.” As TEAMLINDEN recently celebrated our five year anniversary, it’s very rewarding to consider how much we have all grown at Fisher & Company… and looking back it’s clear that we grow the most during the times of our greatest challenges; challenges which meant change, taking advantage of the agility within our Teams and beating our competition to that “next level” of performance. I’m looking forward to the next 5 years. As I...
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...Final Exam MGMT365 July 2, 2015 Abstract The new economy has ushered in both great business opportunities and great turmoil. Not since the Industrial Revolution have the stakes of dealing with change been so high. Most traditional organizations have accepted, in theory at least, that they must either change or die. And even Internet companies such as eBay, Amazon.com, and America Online recognize that they need to manage the changes associated with rapid entrepreneurial growth. Despite some individual successes, however, change remains difficult to pull off, and few companies manage the process as well as they would like. Most of their initiatives (installing new technology, downsizing, restructuring, or trying to change corporate culture) have had low success rates. The brutal fact is that about 70% of all change initiatives fail (Beer, 2000). This paper will discuss the two change theories E and O. Final Exam Research shows that the reason for most change initiative failures is that in their rush to change their organizations, managers end up immersing themselves in an alphabet soup of initiatives. They lose focus and become mesmerized by all the advice available in print and on-line about why companies should change, what they should try to accomplish, and how they should do it (Brown, 2005). This proliferation of recommendations often leads to muddle when change is attempted. The result is that most change efforts exert a heavy toll, both human and economic. To improve the...
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...account. He remained confident that he could keep the constant growth going even in the face of disaster. Soon after the tragedy of the World Trade Center, the Enron scandal became public. As the public was exposed to the corruption that could occur within large, trusted corporations, investors began to shy away from the larger, more complex corporations like GE in fear of the same thing happening and they lose their investments again. This caused Immelt to look into the operations of the company and what was driving the current growth. He had to consider whether the same strategy would still work, which led to the third reason for a need for change. Immelt knew that he was going to have to keep up the growth that former CEO Jack Welch enjoyed, but Immelt could see that the same strategy of depending on growth from productivity was not going to work. To keep shareholders happy, he had to find another way to keep the reliable growth they were used to ongoing. He decided that innovation and investing in GE’s companies that could create their own growth was the way to go. 2. Immelt’s acquisition program became quite successful in creating growth for the company. To make the new company portfolio easier to understand, he split...
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...Winning Book Review Welch, J., & Welch, S. (2005). Winning. New York: Harper Business. In the book Winning by Jack Welch with Suzy Welch, Jack Welch talks about how winning is everything in business. If you are not in it to win it, then do not be in it at all. When companies are winning, there are far more opportunities than when a company is losing. A winning company can give back to society by providing more jobs and resources. A losing company is worried about finances; and because there isn’t a lot of profit going around, people can become scared of things like their jobs and families. The book breaks down on how to win into four sections. The first section is the philosophy on management such as mission and values and how everyone should have a voice in any kind of business. The next section is about the inside of a company. It talks about the mechanics of a company which are “people, processes, and culture” (pg.8). The next section talks about the outside of a company such as competitors, growth, and strategic advantages. The next section is the professional life. This section talks about how to find the right job, working with a bad boss, and getting promoted. The final section is about how Jack Welch “answer[s] nine questions that did not fall into any of the above categories” (pg. 8) such as the “China threat” diversity. The purpose of this book is to show that winning isn’t impossible. From these four sections of the book, Jack Welch shows us that in every aspect...
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