GE's two decade transformation Case Study Help
Welch knew that he will be retired in 2001 and his health issues was also increasing but, he remained focused on developing and adding value in the company through taking some potential strategic moves. Welch addressed this question from critics head-on in GE’s 1995 Annual Report by emphasizing the company strategy to continue getting bigger with the only spin off being “Cash – and lots of it.” Despite of the critics being faced, Welch came up with many strategic initiations. The work out approach has been identified to introduce best practices to improve the organizations productivity by empowering the employees. From this approach top managers realized that primarily, they were wrongly manging the things. Fresco, the head of the international operation, had made several deals such as Toshiba partnership, Sovac acquisition and the Robert Bosch joint venture, in order to increase the global revenue of the company (pg. 5). From internationalism, GE’s revenues were rose by 50% within just five years, representing $42.8 billion of international revenues (pg. 6). For embracing the leadership style which Welch want, he developed GE’s Crotonville management development institute where the management train managers and employees about the GE’s new cultural norms and vision. These efforts did not bring the desired results as Welch wanted- the ideal leadership profile (pg. 7).GE’s top line growth over Welch’s two decades of leadership was $102.6 billion or 377% (Exhibit 5).GE developed an “Integration model” for creating a boundary less environment where everyone is struggling to generate new ideas and should be able to live in an anti-parochial and friendly environment. This model helps to align the accounts of acquired companies within the GE’s model. GE reduce his traditional product concept by acquiring some services business such as Peabody and Kidder in 1994 (pg. 10). This positively affected the company’s profitability, making up almost 60% of profits in 1995. Despite of all these taken initiatives, GEemployees realized the low of the product and its process. To avert this situation, Welch applied six sigma strategyfor lowering down the cost and increases the product’s quality (pg. 12).While there was an initial investment of $500 million to train all employees, GE predicted incremental returns of $1.5 billion in 1999 (Exhibit 11).Additionally, Welch developed Four players strategy to train his employees to perform at higher levels.This program eventually evolved into what Welch expressed as “A-Players with 4 Es”. An “A-Player” was characterized as having Energy, Edge, and Execution (pg. 13).
Question: 4
Jack Welch, the CEO of General Electric, has took many initiatives and changes throughout his career in the GE to take the organization to the next level in term of productivity and cultural values. Under the Welch’s leadership, the company was named as the “Most Admired Company in the world” and the “Most admired company in the United State”, and Welch was named as the “Manager of the Century” (pg. 1). Welch believes that he could bring “better than the best” and thus, restructure the whole organization. His relentless passion, adaptability and unquestioned commitment toward making GE better than the best was the center of his drive toward leading positive change. As in the case exhibit 9, it could be seen that when Welch took charge and applied several initiatives, the product’s cost shows decreasing trend along with an increasing trend of its revenues throughout his period. The leading change brings an annualincrease of 6% in domestic growth rate and 15% in global growth rate because of internationalism policy. Mr. Welch passionately challenged every person at GE to add value each day. he was a steward leader, he continually made efforts to improve and wholeheartedly believed that his work, as well as the evolution of GE was continually changing and could never be entirely fulfilled. Throughout his tenure, he linked himself with his employees by applying some strategies such as direct reporting system and by evaluation of different managerial levels.He is considered as one of the great GE’s CEO because of his reluctant efforts and approaches.
Conclusion
Thomas Edison in 1878 founded General Electric to generate electric power, its distribution and increases its uses with the view point to diversify the organization’s business in future. Jack Welch became the CEO of General Electric in April 1981.To cope up with the potential challenges, Welch developed a new vision of its SBU’s-the “Three circle concept” which was envisioned for setting the standard strategy for individual unit. Additionally, he took three potential initiatives which includes best practices, boundaryless organization and the six-sigma approach. Furthermore, Welch had developed Four players strategy to train his employees to perform at higher levels. He is considered as one of the great GE’s CEO because of his reluctant efforts and approaches..............................
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