GEs Two Decade Transformation: Jack Welchs Leadership Harvard Case Solution & Analysis

GEs Two- Decade Transformation: Jack Welch’s Leadership

Question 1

Jack Welch faced some difficult challenges when he became the CEO of the General Electric. The main difficulty that Jack Welch as a CEO faced was the uncertainty of the external environment. As, when he joined the company as a CEO, the economy of U.S was in recession and he had to deal this recessionary environment in order to enhance the performance of the company. During the year 1981, the economy of the United States was facing  higher interest rate and a strong dollar intensified the problem as well as also resulted in the highest unemployment rates in the country.

Furthermore, another area of concern for Jack Welch was that he replaced the successful predecessor Reg Jones for the position of CEO, who had been greatly successful during his time at the General Electric. Popularity of Reg Jones among the public was quite high as he was voted as the “CEO of the Year” three times and also “CEO of the decade” by one of the leading business journals.

Another difficulty that Jack Welch faced was the increased amount global competition often from the Japanese rivals in the industry. This increase in the rivalry had made the General Eclectic to struggle more in the environment of recession toprogress the growth and productivity of the company. The restructuring of the strategic planning was another factor of concern that New CEO faced in 1981 as the focus of the strategic planning system that was implemented byReg Jones was very tough.

Moreover, there were few other challenges that Jack Welch faced related to the complexity of the organizational structure. These few challenges included downsizing and restructuring of the organization, reduction in workforce salaries and reduction of employees, Evaluation of the budgeting process against the external competitiveness based criteria, laborious strategic planning system, and corporate planning process.

Jack Welch  suffered concerns  in order to reduce the number of hierarchy levelswhich were nine at the time of Reg Jones due to his increased focus on the strategic planning system. The high level of bureaucracy in the company was the difficultly that new CEO also encountered.

Jack Welch had quite effectively taken the charge of the CEOs position as he managed all the challenges that he faced greatly. He made continuous changes in the organization by pushing it towards morechange. He started with organizational restructuring in order to achieve the higher performance of the General Electric.     He removed the bureaucracy, downsizing of levels and made changes in the culture of the organization to overcome the difficulties of 1981.

Furthermore, he also implemented the fix, sell or close strategy with the objective to enhance the growth of the company by selling or closingof the businesses that showed declinesin term of sales.

Question 2

The main objective of the company is to add more benefits for the customers and build a strong ground for the future growth of the General Electric. in Addition to this, Jack Welch wants the company to be perceived as unique and highly spirited enterprise as well as the most profitable and highly diversified enterprise in the world.

Additionally, in order to achieve his objectives for General Electric, he introduced a series of initiatives in the late 1980s and early1990s. He changed the management style with the goal to make General Electric norm that based on openness, candor and facing reality. Healso changed the major elements of the culture and wanted to createa culture that promote speed, simplicity and self-confidence. The implementation of the new organizational culture focused outward on a competitive world.He also wanted to translate the cultural changes from down to the individual level.

Jack Welch introduced two initiatives that were Work-Out and Best Practices;intended to create the desired culture and management style in the organization. The objective of the Work-Out was to design the process where all the employees and their bosses could workout new methods of dealing with each other .Whereas,the objective of the Best Practices was to learn from the other companies in the industry that are achieving highproductivity and growth than the General Electric. He wanted to increase the productivity and efficiency of the company as well as createthe environment where employees could do their best. He also focused upon the realigning the skills of the workforce of the organization and their mindsets in order to bring out the best from everyone. He also focused on the training and development of the employees in order to enhancetheir skills that may result in the growth of the organization. Furthermore, he also reduced the hierarchical level from nine to four in order make sure that all the businesses of the company reported directly to him.....................

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