Case study of General Electric
- Assuming leadership.
- Restructuring of General Electric in the early 80' s.
- Launching new initiatives.
- Running for the best continuing improvements.
- Facing the last challenge.
Jack Welch was the CEO of General Electric (GE) from 1981 until 2001. He is regarded as one of the most successful CEOs of the 20th century. This essay intends to analyze Jack Welch's two-decade leadership by answering the question of what made him the "Manager of the Century" and GE the "Most Respected Company in the World". Jack Welch took on leadership in April 1981, taking over from "management legend" Reginald Jones who had managed GE very successfully. However, at the beginning of the 1980s the U.S. economy found itself in a recession. The growth rate of the GDP even dropped to -6.4% in the first quarter of 1982. Coupled with this was the highest unemployment rate since the Great Depression in 1929, as well as high interest rates. Moreover, Japanese high-tech companies had emerged, swiftly becoming main competitors for GE in the global market. Internally, Welch had to face a highly bureaucratic company, a disadvantage that was soon about to change.
[...] Globalisation counts as one of the five key areas that drive GE business growth.[ix] The globalisation process started in 1987 with an exchange of businesses with the large French electronic company Thomson A.S. This strategy was pursued during the following years by entering into deals like joint ventures (e.g. Robert Bosch), partnerships (e.g. Toshiba) and a number of acquisitions (e.g. Sovac). GE invested worldwide across Europe, Asia, and countries like Mexico. Besides increasing revenues by selling goods and services in global markets, globalisation meant globalising every activity of the company, including the sourcing of raw materials, components or products and finding and attracting the intellectual capital world-wide. [...]
[...] His motivation for that was his vision of GE; he wanted the company to be ?perceived as a unique, high-spirited, entrepreneurial enterprise . the most profitable, highly diversified company on earth, with world quality leadership in every one of its product lines.? Following his vision and the sell or close? concept, GE sold more than 200 businesses, invested over $21 bn in acquisition, and took over more than 370 businesses. Another change in GE structure was the destaffing process. Welch reduced the strategic planning and the corporate planning staff and replaced it with the ?real time planning?. [...]