Jack Welch's Leadership

Analyzing GE’s corporate-level strategy from 2001 – present with Jeff Immelt as CEO, GE focuses on the growth and development platforms. Technology is the key driving force for GE’s future and growth. Advancements in industries such as energy, health and aviation fueled demand for cleaner and more efficient energy production. GE identified new markets with potential high-growth that offered attractive returns through strategic mergers and acquisitions. As CEO, Jeff Immelt established a process for identifying projects that offered attractive growth potential which were then nurtured and treated as special projects or initiatives that were not subject to strict budget constraints. Immelt introduced GE’s three strategic imperatives as: (1) sustaining its strong business model, (2) strengthening the business portfolio, and (3) driving its growth initiatives. www.ge.com

In the case, “The Jack Welch Era at General Electric”, indicate that during the period of Jack Welch was a CEO at General Electric from 1981 to 2001, the company became remarkable profit. Earnings per share rose from $.46 in 1981 to $1.07 in 2001. GE is a company which has a very long history, and Jack Welch was the first working-class person that finally became the famous manager in GE history. He changed and built lots of rules to fulfill his ambition to make the company more wealthy such as eliminated workers, changed GE’s culture by promoting the notion of a “boundary less” organization, used identical 20-70-20 percent curve to manage managers, and reshaped GE stocks. The story of the Welch years has the elements of legend, however,

This report’s objective is to provide analysis of the leadership challenge that General Electric (GE) is currently facing, and to recommend solutions. The primary problem is determining what kind of candidate is required to replace retiring CEO Jack Welch. This has left GE to question how much does the company want to change policy over the previous era, and where does the company want to be in future?

Another characteristic desirable by a leader as displayed by most CEOs of General Electric, according to Machiavelli, was being feared rather than loved. He reiterated that a feared leader gains more admiration and is at the end of the day less harsh than a leader who strives to acquire love. A feared leader like Jack Welch upheld respect by making illustrations of only a few instances that needed intervention in the organization. On the other hand, leaders who endeavor to receive the love and admiration constantly lose respect and tolerate communities to incline into chaos (“murder and rapine”). As soon as such circumstances come into play, the leaders resort to radical and universally ferocious solutions to reestablish order. Consequently, it is better to murder a few people than to be forced to abolish an entire city. Most essentially, a feared leader has less motive to concern himself about wrongs. Men are less expected to attack a feared leader compared to

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.

Hierarchical organizational levels were dramatically reduced, enabling the company to operate as a “lean and agile” business. From the moment he took over the business, Welch went full force into implementing a “real time planning” strategy. At the time of his appointment, the United States economy was in a recession. To combat this situation, Jack Welch had to develop a plan of action aimed at keeping the company thriving in the business world. In order to accomplish this, GE sold many of their businesses, which represented 25% of their sales. However, during that time, Welch simultaneously and strategically invested in other businesses, increasing their revenue and operating profits. How effectively did he take charge? Welch was extremely effective in taking over the GE reins. Although his predecessor was quite successful during his reign and the business thrived, there was still the need for change. The business world was evolving and competitors attempted nonstop to stay ahead of GE. Fortunately, Jones had left the company in a “good place” during

The company has blasted off from the beginning, and that can only happen with a strong staff to support the company from the inside out. Currently, GE has it’s headquarters in Fairfield, Connecticut. Jeff Immelt is the current CEO, and has held that position since 2001. Immelt has been involved in the company much longer than that, though. He’s held positions in GE’s Plastics, Appliances,and Healthcare divisions since 1982. However, his power has a negative side to go along with the positive. GE’s stock has gone down nearly 60% since 2001, when Immelt become the CEO. This dramatic change can be blamed on fluctuations in the economy, but that’s not where it stops. General Electric has lost 19,000 employees, and also closed 31 plants in America. Immelt has been criticized for all of this, and even especially so because he was the chairman on President Obama’s Council on Jobs and Competitiveness. The company has 18 other corporate executives, to head fields like Financial Planning, Investor Communications, and Global Research. Their 19 business executives head the different departments of GE: Lighting, Transportation, Asset Management, Power and Water, Oil and Gas, International Capital, Retail Finance, Aviation, Energy Management, GE:Africa, GE:Greater China, GE:America, Healthcare, Home & Business Solutions, and Real Estate and Capital

Analysis - GE has likely been so successful over the years because of its ability to foresee major trends and capitalize upon them. In the 1960s, for instance, GE was one of the eight major computer companies. Even recently, since 1986, GE has continued to acquire several organizations; portions of NBC, wind manufacturing, universe pictures, aerospace industries, international firms, software and hardware manufacturing, even oil companies abroad. The company culture describes itself as not one company, but many each unit a vast and complex enterprise in and of itself, with a corporate

Jeff Immelt, General Electric’s (GE) CEO as of September 7th 2001, has made tremendous improvements to the organizations strategy in terms of the firm-strategy interface and the environment-strategy interface. The foundation had been set by the “near legendary CEO” Jack Welch, his predecessor who had been the CEO for 20 years and built GE into a “highly disciplined, extremely efficient machine that delivered consistent growth in sales and earnings—not only through effective operations management that resulted in organic growth (much of it productivity-driven) of 5% annually, but also through a continuous stream of timely acquisitions and clever deal making”. Unfortunately, Immelt was faced with numerous difficulties as problem after

GE’s corporate strategy is one of moderate to high level of diversification. More specifically one that is related linked. Most people call them a conglomerate or a company made up of very different companies all operating in different industries. However GE’s CEO Jeff Immelt sees it differently. He doesn’t see a conglomerate he sees a company that is diversified over many industries, but one that works together towards a common goal. You can see that in the way that research and development in one of their industries is used to improve their product or service in a different part of the company. By having all of these differentiated industries working together under the name of GE they have been very successful company. Now the situation is changing. People are seeing GE struggle especially GE Capital. To make

Above all, Welch was a ruthless taskmaster at GE. Immelt works with long term perspective rather with a short term one. Immelt proved that he is a very effective leader by helping GE overcome the hardship in 2001 when terrorist attacks on September 11 were a harbinger of bad times to come for GE. (see Appendix B, Story 2)

While GE was building a name for itself with great new products it also became a leader with its innovations in management. In 1900 GE embarked on its first management initiative by creating the first corporate research and

The goal behind trying to “internationalize” the senior management ranks at GE is to have deep understanding of local language and culture which is often critical in maintain the survival of the company. For example, in China, the government is a large customer, and working closely with government bureaucrats requires a cultural sensitivity that is difficult for outsiders to gain. Therefore, GE needs somebody who can converse in Chinese language and understand Chinese culture to obtain government bureaucrats’ trust. To “internationalize” senior management ranks means that the company hire international managers from the country that they invest and locate them in the region they came from. This is because they found that local nationals are invaluable when trying to sell to local companies and governments. To achieve that, they send those managers travelling overseas for management training and company events.

In 1981, 45-year-old Jack Welch became the eighth and youngest CEO in General Electric’s history. During his 20 years at the helm, Welch transformed the company from an aging industrial manufacturer into one of the world’s most competitive organisations, by building more shareholder wealth than any corporate chief in history. Time and again he reinvented the company, and time and again, his employees went along with it (Krames, 2002).

Jack Welch’s vision of what GE was possible of gave the company a vision for twenty years while he was the CEO and chairman. He states, “leaders make sure people not only see the vision, they live and breathe it.” (Winning, pg 67) He not only allowed for employees to stretch, but demanded it. In teaching workers to stretch Welch knew that workers “may fail. In fact, they probably will fail. But stretching, and stretching the business, is going to improve performance results.” (Jack Welch on Leadership, pg 105) He also states that “only by setting the performance bar high did it become possible to discover people’s capabilities.” Jack Welch’s emphasis on candor and breaking the bureaucracy of modern business separated him from his contemporaries. He excited others of the possibility of being the biggest and best company in the world and rewarding his best employees that shared the values of GE. According to FORTUNE Editorial Director Geoffrey Colvin In "The Ultimate Manager, Welch leads the annals of management history not for anticipating the new world's changes ahead, but for acting on them: "His great achievement is that having seen it, he faced up to the huge, painful changes it demanded, and made them faster and more emphatically than anyone else in business. He led managers into this new world, which we still inhabit, and just as important, he showed business