General Electric Performance over a Half Century Essay examples

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ISSN: 1083−4346

General Electric Performance over a Half Century:
Evaluation of Effects of Leadership and Other
Strategic Factors by Quantitative Case Analysis
Richard H. Frankea, Anthony J. Mentob, Steve M. Prumoc, and
Timothy W. Edlundd abc Department of Management and International Business, The Sellinger School,
Loyola College; 4501 North Charles St., Baltimore, MD 21210,, d Morgan State University; 720 West 34th St., Baltimore, MD 21211-2604 ABSTRACT
We conducted quantitative case analysis of inflation-adjusted profitability and relative market value at General Electric over a …show more content…

In reality, of course, it's just the reverse. Clear, tough-minded people are the most simple."
According to Tichy and Sherman (1993), Jack Welch saw reality objectively and consistently applied this orientation. He was willing to face reality, even if it was different from that in the past: "Facing reality as it is, not as it was or as you wish ... facing reality is crucial in life, not just in business. You have to see the world in the purest, cleanest way possible or you can't make decisions on a rational basis."
As noted by Locke (2000), Welch was a problem finder, not just a problem solver. When he became CEO in 1981, General Electric already was quite profitable, without obvious problems. He grasped the reality that if the status quo continued GE eventually would decline, so he proceeded to transform the company. Even during his final years at GE, Welch was not content to rest on his triumphs. Thrusts in the 1990s included a massive quality program ("6 sigma"), a push further into financial services, and a string of acquisitions meant to give GE technological leadership in key industries.
A related aspect of Jack Welch's leadership was to set goals that seemed difficult or even impossible (Locke, 2000). He required that every business in GE's portfolio be number one or two in its industry--in the United States, and later in the world as a whole. Steve Kerr of General Electric described the GE "stretch target" as "basically an

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