Welch\'s Corporate Social Responsibility During

¶ … Welch's corporate social responsibility during his tenure at General Electric. Jack Welsh is a legendary manager who came in and "cleaned house" at General Electric in an attempt to make the company more profitable and effective. Welch attained his financial goals, but at a very strong social cost to the company and its people.

GE in Welch's era did not use means that did not harm their social assets. In fact, Welsh was ruthless in his reorganization of GE, and he cut jobs and companies without regard to the people and communities this affected. His only goal was to make GE profitable for the shareholders, and he certainly did this. However, his methods were brutal and heartless, and could in no way be defined as social corporate responsibility. The text notes that one in four GE employees lost their jobs during Welch's tenure, and there was no longer any corporate loyalty or responsibility to the employees, in fact, they were under constant threat of being fired, which is a terrible environment to work in and under. In addition, GE outsourced many jobs to foreign countries, where workers make much lower wages, and forced their suppliers to do the same to cut costs. They eliminated as many as 150,000 jobs in this way, leaving communities that relied on GE as their major source of employment bereft. In no way did Welch protect the company's social assets, he was ruthless in his manner, in the way managers and employees were evaluated, and in chopping people and businesses that he did not deem profitable. Welch could be the poster child for anti-social responsibility, an example of what not to do.

GE under Welch does illustrate the narrower view of corporate social responsibility that is closer to Friedman's view that the only social responsibility is to increase profits while obeying the law. Welch often broke the law or approved of illegal methods, so he disobeyed the law, but he certainly did vastly increase profits. Of course, he did this at a high social cost, and he did it without regard for employees or communities. This narrow view was common earlier in history, but today, more and more people expect corporate social responsibility, and so his actions seem more heinous now, in retrospect. His disregard for the environment and blatant attempts to mislead the public over the Hudson River PCBs dredging also indicates that Welch's intent was to make money at all costs, and to step over anyone who got in his way. The treatment of GE pensioners indicates this as well. Refusing to raise pensions set in 1965 was simply cruel and greedy, and his own lavish pension bears this out. Welch's actions go far further than simply corporate social responsibility. Some of them could be classed immoral and reprehensible, and yet he is still cited as one of the best managers in the world.

Some of the principles of corporate responsibility include following the laws that guide the corporation and its operations. They should be run to make a profit, they should correct social inequities their operations may cause, they should meet the needs of stakeholders, they should comply with social norms and the social contract, and they should take accountability for stakeholders and publicity. Well, GE under Welch certainly did make a profit, but at the expense of many of the stakeholders and certainly at the expense of the environment and many laws. They did not address the social inequities their operations caused, either in the Hudson River or in the case of the many displaced workers who were put out of work due to Welch's management principles and his ruthless cost-cutting measures. While GE does engage in philanthropy, it treated its own stakeholders with disregard and that is dismaying, and in complying with the general principles of corporate responsibility, GE really gets a failing grade in almost every area. They took a company that generated employee loyalty and respect, and turned it into a company that treated employees like second-class citizens who could be fired on a whim, and that was soundly Welch's doing, leading his company down a path that was far from corporate social responsibility on many levels.