Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
GE's Two Decade Transformation
• Examine Jack Welch and his transformation of General Electric
Welch's initial resolve to make the company more agile and lean led to a highly systematic downsizing, delayering and destaffing process focusing on every large headquarters group, which included a cutback by half in the company’s 200-strong strategic planning workforce and the elimination of its arduous strategic planning structure. In its place, he incorporated "real-time planning'', discussed with fourteen key business leaders via informal sessions. GE’s budgeting process was also drastically altered: results were assessed against external competitive conditions, instead of internal comparisons. In the year 1985, Welch did away with the sector level; to guarantee every business directly reported to him, he eliminated 5 hierarchical levels (Bartlett, 2000).
The company did away with 64,160 hourly and 59,290 salaried jobs from 1981 to 1988; divestiture led to the elimination of 122,700 more jobs. While a modest revenue growth from 27.2 to 29.2 billion dollars was achieved from 1981 to 1985, operating profits grew significantly from 1.6 to 2.4 billion dollars. Years after commencing extensive reform, Welch deemed GE’s hardware to finally be in place and believed the time had come to concentrate on its software. His priorities shifted to achieving cultural change...
To this end, he initiated the ‘Best Practices’ and ‘Work-Out’ initiatives. Additionally, he concentrated on globalization, investing 17.5 billion dollars in Europe from 1989 to 1995 and nearly doubling GE’s international revenue to $42.8 billion by 1998 (Bartlett, 2000).
Welch concentrated on creating integrated diversity and a boundaryless firm marked by an anti-parochial climate, open to sharing and seeking ideas from all. Lastly, he focused on the service sector by acquiring Peabody, Kidder, and other financial service firms (Bartlett, 2000)
• Identify the strategy Jack Welch used to create value for General Electric
As soon as he took charge, Welch established a business standard of either becoming the industry’s top or second-largest competitor, or disengaging (Bartlett, 2000).
• Why do you think this strategy was successful?
Welch’s aim was ensuring a unique, entrepreneurial, most diversified, and most successful firm through historical acquisitions and deals, and the selling off of less-profitable divisions. He employed top global talents strongly committed to his…
References
Adari, P. (n.d.). GE and Jack Welch Leadership - Case study approach. Retrieved March 19, 2018 from http://www.academia.edu/11670513/GE_and_Jack_Welch_Leadership_-_Case_study_approach
Bartlett, C. A. (2000). GE's Two Decade Transformation: Jack Welch's Leadership. Harvard Business School
GE's Two-Decade Transformation: Jack Welch's Leadership, Christopher A. Bartlett and Meg Wozny describe the sometimes unorthodox leadership style of General Electric CEO Jack Welch. It is hard to argue with the success of Jack Welch's tenure as CEO at GE. He led the company from a floundering, outdated, bureaucratic monolith when he took the reins in 1981 to a diverse, successful, and globalized corporation as he faces retirement. However,
GE & Strategy "Indeed, diversification and decentralization had been the major strategic thrusts of GEs two prior CEOs…" (Walker, General Electric Strategic Position-1981, 1993). Under decentralization, GE's departments were building blocks with their own product market, market strategies, finance, engineering, manufacturing, and employee relation functions. With expansion came problems of permissiveness and lack of proportion. Employees lacked experience. GE had profitless growth, massive investments with long payback periods, poor planning, and
GE Jack Welch GE has been able to pursue unrelated diversification for a few reasons. Most important is that the corporate level contribution has been limited to management practice. GE contributed systems to its subsidiaries, but allowed managers to run their own businesses, and not be tied to trying to work with other subsidiaries. GE contributes best practices that help managers of all businesses to operate more effectively, but corporate head
Business Transformation Strategy GE Capital Woodchester is a leading provider of motor car, equipment, and personal finance in the country of Ireland. They offer the most flexible packages for diverse financial needs and as such, have earned the position of leading the personal and capitol acquisition financial services. GE Capital Woodchester also provides specialized financing and services and they focus on niches including equipment and car leasing, hire purchase and loans
Difficulty of Challenges That Welch Faced In How difficult a challenge did Welch face in 1981? How effectively did he take charge? There is no doubt that Welch is one of the greatest mangers and successful diplomats in the field of business entrepreneurship management. There are several features of management and close observation of the observable avenues of production in the field or organizations. As done with Welch manufacturing and years of
Jack Welch became the CEO of General Electric and was tasked with bringing the company's profits up in a recession. In this case, he realized that it was an issue of the internal affairs of the business and not so much customer service issues. In response, Welch transformed the company through creating fresh action plans for each department, eliminating departments that were not making the market's best products, and