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

GE's Two-Decade Transformation under Jack Welch’s Leadership Case Solution

Introduction

            GE was founded in 1878 by Thomas Edison with an objective of promoting generation, distribution and electric power to gain competitive advantage over the competitors. It was turn out to be one of the world’s leading industrial companies for a decade. Apart from focusing on its core competencies in power generation, lighting and house hold appliances; GE was also continuously diversifying in markets and entered in the area of aircraft engines, medical systems and diesel locomotives. GE was considered and nominated as the most attractive companies not only in the U.S but at a global level as well. Jack Welch’s strategy was perfect for the GE as he was able to diversify the products according to different markets in the best interest of the organization and actively participated in the development of the organization.

            There were various strategies that Jack Welch implemented for the company in order to gain competitiveness and bring change in the organization; a lot of them succeeded and were criticized as well by some of the people. The paper elaborates the aims and objectives of Jack Welch, which were aimed to achieve restructuring, changing in the corporate culture, bring innovation and technology, research and development facilities, employee motivation and so on. Jack Welch’s leadership style is analyzed and discussed in the paper on a greater scale in terms of what objectives and goals he wanted to achieve? Was his approach successful or not? Did it achieve the desired goals and objectives? These are some of the solutions that were discussed in detail in the paper.

Solution # 1

When economy is in recession, it is very difficult for any business to sustain and grow especially on the long term basis because various macro-economic factors affect the organization in a negative manner; one of the main drawbacks of the recession is the less spending due to lower purchasing power. When Jack Welch was appointed as GE’s CEO, the U.S economy was in a same situation and it was one of the biggest challenges that Jack Welch had faced during his tenure. Another concern of Jack Welch was the image and high profile reputation of the previous CEO, Reg Jones. Reg Jones has set high quality standards and procedures for GE in order to make it the best. So Jack Welch had to maintain Reg Jones’ standards efficiently and effectively and he also needed to bring change and creativity that positively reflected in the organization’s performance.

The way of Jack Welch overcome that problem and delivered was quite brilliant achievement in those circumstances for GE. Jack Welch started to plan and implement strategies accordingly for the GE. He was involved in restructuring the organization and measured the performance of every business unit in the favor of the organization. The units that come under “Dogs” category of SBU’s were closed and those who had the potential to become cash cows were effectively organized in a new shape. He implemented new “Strategic Planning” approach in the organization; he also revised GE’s laborious strategic planning system as well as budgeting process. With Jack Welch new implantation of strategy, consequences were now estimated on the basis of external competitive decision based criteria and ask for some of the solutions like: do sales have any impact on market share?

These are strategies that Jack Welch adopted and implemented in order to keep providing positive results for the GE succeeded a lot with his style of decision making in the era of immense competition and macroeconomic threats in the industry, which was really threatening for the industry but he did the job in very an efficient and effective manner.

Solution # 2

            The overall objective of Jack Welch was to bring rapid change in the organization culture, strategy, product and market based decision making. He was concerned more about the organization’s performance along with the division and units that were in losses were shut down in his tenure; however, the division that needed some efforts converted into the profitable ones. Jack Welch was taking the software initiative as well for ‘Work-Out’ and ‘Best Practices’. He believed that an organization can achieve growth and productivity by implementing restructuring, removing bureaucracy and downsizing but it cannot maintain high productivity with the practice of cultural change in the long run. In the software initiative, his target was to reorganize the company’s culture following the speed, simplicity and self confidence principles.Ge’s Two-Decade Transformation Jack Welch’s Leadership Case Solution

Work-Out was basically a practice designed in order to get avoidable bureaucratic work out of the system with a basic platform for employees in whom there was an ability to work along with the bosses in order to find new ways, ideas and innovative thinking for the organization. This actually consist of a group of 40 to 100 employees who were selected and invited to share ideas and opinions about the company’s success and how it may be further organized and improved...........................

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GE is faced with the impending retirement of Jack Welch and whether anyone can withstand blistering pace of change and growth characteristic of the era Welch. After a brief description of the heritage and transformation Welch GE business portfolio of the 1980s, the case chronicles Welch's revitalization initiatives through the late 1980s and 1990s. It focuses on six key programs Welch changes:. "Software" Initiatives, Globalization, Rethinking Leadership, Stretch Objectives, Service Business Development, and Six Sigma Quality "Hide
by Christopher A. Bartlett Source: HBS Premier Case Collection 24 pages. Publication Date: April 28, 1999. Prod. #: 399150-PDF-ENG

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