GE Two Decade Transformation

1737 WordsFeb 22, 20157 Pages
Case 1: GE’s Two Decade Transformation: Jack Welch’s Leadership-HBS # 9-399-150 1. How difficult a challenge did Welch face in 1981? How effectively did he take charge? Jack Welch became the CEO of GE back in April of 1981 when the economy was in a recession. He faced the highest unemployment rate during that time due to the high interest rates during the depression. Several other challenges came along with this position from the increase in competition and also being overshadowed by a longtime predecessor that completely changed the face of the company. Jack also had to immediately face the increase in competition from foreign companies looking to grab hold of the market share in the industry. After taking over, Jack felt that in…show more content…
Jack did not hesitate to replace anyone that either did not fit the core values of the company no matter how successful they were. As long as you believe in the company’s values, and understood the direction of the company you were given a fair chance. Also, plenty of training was offered to those that needed it. This program eventually changed into what Jack expressed as “A-Players with 4Es”. An “A-Player” was someone that had energy, an edge, and was capable of executing. Jack believed in taking care of his employees. He would urge his staff to reward and give raises to the employees that deserved it. Time was never a waste when it came to developing employees to be better to improve. 3. How does such a large, complex diversified conglomerate defy the critics and continue to grow so profitably? Have Welch’s various initiative added value? If so, how? Jack addressed critics by reiterating the company’s plans and commitment to continue to grow. One of the main factors to GE’s continued success was the investment in grooming and training of their employees, especially in management. He also expanded the globalization strategy to the employees and asked them to “globalize the intellect of the company.” This strategy reinforced his prior initiative of “boundaryless” behavior. GE’s top line growth over Jack’s two decades of leadership was $102.6 billion. He was able to grow the business effectively by increasing operating profits to $171.8 billion. The growth of the
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