Ge's Two-Decade Transformation: Jack Welch's Leadership

1107 Words May 27th, 2013 5 Pages
Case Analysis # 7
GE’s Two-Decade Transformation: Jack Welch’s Leadership
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Background:
General Electric is the core of a holding company holding exhaustive list of divisions and business units which are designed to support the centralized strategic planning. Jack Welch as a CEO restructured GE and took off to the world’s most successful corporation with high stock prices derived from top caliber operating margins and seemingly unending revenue streams.

Vision and Mission:
GE’s core values are based on
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Parenting strategy that GE followed was mainly Development and Linkage. This is because the Welch era constantly went through restructuring and the purchase and sale of new SBUs.

At the same time, the parent company created synergies in the SBU which were operational in nature and had a high degree of corporate intervention. Most of the time it is quite difficult to align new SBUs with the culture of the acquiring company but Welsh was able to do that thus creating synergies.

Corporate Parenting:

General Electric Company
Linkages | Development | Central service | Stand-alone |

High
Degree of corporate intervention

Low

Operating Financial Nature of corporate intervention

Synergies: i. Business unit synergy:
GE handled its SBU’s quite successfully & tried to create business unit synergy by increasing compatibility & complementarities. For example it has increased its compatibility when they tried to learn job shop techniques from Canadian appliances which increased efficiency by applying similar strategy. However, it also tried to increase its complementarities as GE was not stuck into only on the product, they also focused on the service business later which also increased their revenue, and here synergy arises from the differences. In addition GE’s boundary less behavior also helped them to increase their compatibility as they learnt from other SBU’s like asset management from appliances, transaction
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