Ge’s Two-Decade Transformation

1844 Words Apr 14th, 2012 8 Pages
Ge's Two Decades Transformation
GE’S Two-Decade Transformation
1.How difficult a challenge did Welch face in 1981? How effectively did he take charge?
When Jack Welch assumed as CEO of GE in April 1981, he had the challenge of revitalizing the competitiveness and productive competency of the company. In 1981 the economy was in a recession and high unemployment combined with high interest rates exacerbated GE’s problems. GE needed to be restructured and this entailed the modernization and streamlining of operations, downsizing the organization, reduction of payrolls and stringent efficiency measures.
Welch Early Priorities: GE’s Restructuring
1 or 2: Fix, Sell or Close
Each business needed to be 1 or 2 competitor in industry. It had
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Have Welch’s various initiatives added value? If so, how?
Into the 1990’s: The Third Wave
Foundation had been laid, now task rebuilding company at an even more urgent pace
Boundaryless Behavior
- Initiatives aimed at strengthening GE individual business, create “integrated diversity”
- Open, anti-parochial environment… sharing ideas… remove the barriers among engineering, manufacturing, marketing, sales etc
- Be as comfortable doing business in Budapest as Louisville, and erase group labels as “salaried”
- Wanted to quickly learn from each other, “integration model,” develop a model guided the actions of managers, realigning the organization and remove blockers
Stretch: Achieving the Impossible
- Reinforce his rising managerial expectations, new assault on GE cultural norms
- “Stretch” to set performance targets and described it as “using dreams to set b. targets, with no idea how to get there”
- Targets not replace traditional forecasting, managers still had to hit these basic targets, Stretch goals were set higher but not held accountable… wanted to keep a
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