case analysis

teacher comments are posted on each section in case analysis final please re do the right way from the teacher comments also book is attached and the students example

The paper must be supported by the Organizational behavior: Managing people and organizations text (Griffin, Phillips, and Gully), as well as five other outside sources.

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The intent of the paper is to provide students the opportunity to further explore topics from the course, demonstrate an informed understanding of the topics, and apply relevant knowledge to analyzing and evaluating the case.

The final case analysis (critical assignment) must include the following components which will be graded according to the standards that are established in the Final Case Analysis Grading Rubric attached to the assignment in Blackboard. The schedule for submitting each section and the final case analysis is as follows:

Week 1: Summary of Background and Facts
Week 2: Statement of Core Problem
Week 3: Secondary Problem
Week 4: Solutions
Week 5: Constraints and Limiting Factors
Week 6: Implementation of Best Solution
Week 7: Evaluate Leadership Decisions
Week 8: Final Case Analysis (Critical Assignment)

Each of the above components must have a section heading and address the requirements as specified in the grading rubric. In addition, writing quality and adherence to APA standards will be graded.

Social WorkerHuman services business

Running head: BUS463 CASE STUDY 1

BUS463 CASE STUDY 17

BUS463 Case Study

Student’s Name

California Baptist University

EACH CASE STUDY ASSIGNMENT MUST BE SUBMITTED AS A STAND-ALONE ASSIGNMENT. DO NOT SUBMIT THE PREVIOUS WEEKS’ CASE STUDY ASSIGNMENTS. SUBMITTING ASSIGNMENTS MORE THAN ONCE RESULTS IN A HIGH SAFEASSIGN ORIGINALITY REPORT SCORE.

Abstract

A brief synopsis of the main contents of the paper. ONLY REQUIRED FOR THE CAPSTONE ASSIGNMENT DUE IN WEEK 8.

Keywords: GE, leadership, organizational change, organizational culture, CEO transition (If I were to search for article on the internet, what keywords would pull lead me to this paper article?)

Summary of Background and Facts

THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin interdum semper sagittis. Aenean felis nibh, fermentum at condimentum sed, tincidunt at lectus. Ut vulputate dictum porta. Nunc venenatis lorem augue, a tempus ligula condimentum sit amet. Proin accumsan tortor sed molestie ultricies. Duis malesuada mi et quam sollicitudin interdum. Sed sed cursus odio, at pulvinar ligula. Proin ornare nibh ut dolor molestie, ac pellentesque orci fringilla. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nulla sit amet fringilla odio. Etiam tempor aliquam purus at ultricies. Sed ultrices justo non imperdiet rhoncus. Nam interdum purus vitae sem tristique, eu tempus justo semper. Integer in cursus neque. Pellentesque faucibus fermentum tortor. Curabitur dictum turpis vitae efficitur auctor.

Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

Statement of Core Problem

The core problem of the case study is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin interdum semper sagittis. Aenean felis nibh, fermentum at condimentum sed, tincidunt at lectus. Ut vulputate dictum porta. Nunc venenatis lorem augue, a tempus ligula condimentum sit amet. Proin accumsan tortor sed molestie ultricies. Duis malesuada mi et quam sollicitudin interdum. Sed sed cursus odio, at pulvinar ligula. Proin ornare nibh ut dolor molestie, ac pellentesque orci fringilla. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nulla sit amet fringilla odio. Etiam tempor aliquam purus at ultricies. Sed ultrices justo non imperdiet rhoncus. Nam interdum purus vitae sem tristique, eu tempus justo semper. Integer in cursus neque. Pellentesque faucibus fermentum tortor. Curabitur dictum turpis vitae efficitur auctor.

Nullam ac odio ipsum. Sed consequat ligula eget lectus sodales, in pharetra lacus sagittis. Nam consequat ultrices turpis non porttitor. Duis vehicula iaculis bibendum. Nulla facilisi. Pellentesque faucibus quis mauris eu pulvinar. Suspendisse quis ultrices augue. Fusce vel ligula orci. Duis vel est eleifend, bibendum eros quis, semper magna. Aliquam rutrum porta congue. Nulla lacinia, orci non convallis scelerisque, lorem metus rutrum orci, quis sagittis dui augue id enim. Integer volutpat aliquam justo, sit amet dictum metus venenatis sit amet. Suspendisse molestie risus sed elit ultricies viverra. Ut semper tincidunt urna in tincidunt.

Secondary Problem

The secondary problem of the case study is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin interdum semper sagittis. Aenean felis nibh, fermentum at condimentum sed, tincidunt at lectus. Ut vulputate dictum porta. Nunc venenatis lorem augue, a tempus ligula condimentum sit amet. Proin accumsan tortor sed molestie ultricies. Duis malesuada mi et quam sollicitudin interdum. Sed sed cursus odio, at pulvinar ligula. Proin ornare nibh ut dolor molestie, ac pellentesque orci fringilla. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nulla sit amet fringilla odio. Etiam tempor aliquam purus at ultricies. Sed ultrices justo non imperdiet rhoncus. Nam interdum purus vitae sem tristique, eu tempus justo semper. Integer in cursus neque. Pellentesque faucibus fermentum tortor. Curabitur dictum turpis vitae efficitur auctor.

Solutions

The first solution to the core problem of the case study is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin interdum semper sagittis. Aenean felis nibh, fermentum at condimentum sed, tincidunt at lectus. Ut vulputate dictum porta. Nunc venenatis lorem augue, a tempus ligula condimentum sit amet. Proin accumsan tortor sed molestie ultricies. Duis malesuada mi et quam sollicitudin interdum. Sed sed cursus odio, at pulvinar ligula. Proin ornare nibh ut dolor molestie, ac pellentesque orci fringilla. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nulla sit amet fringilla odio. Etiam tempor aliquam purus at ultricies. Sed ultrices justo non imperdiet rhoncus. Nam interdum purus vitae sem tristique, eu tempus justo semper. Integer in cursus neque. Pellentesque faucibus fermentum tortor. Curabitur dictum turpis vitae efficitur auctor.

The second solution to the core problem of the case study is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

The third solution to the core problem of the case study is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

The first solution to the secondary problem of the case study is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin interdum semper sagittis. Aenean felis nibh, fermentum at condimentum sed, tincidunt at lectus. Ut vulputate dictum porta. Nunc venenatis lorem augue, a tempus ligula condimentum sit amet. Proin accumsan tortor sed molestie ultricies. Duis malesuada mi et quam sollicitudin interdum. Sed sed cursus odio, at pulvinar ligula. Proin ornare nibh ut dolor molestie, ac pellentesque orci fringilla. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nulla sit amet fringilla odio. Etiam tempor aliquam purus at ultricies. Sed ultrices justo non imperdiet rhoncus. Nam interdum purus vitae sem tristique, eu tempus justo semper. Integer in cursus neque. Pellentesque faucibus fermentum tortor. Curabitur dictum turpis vitae efficitur auctor.

The second solution to the secondary problem of the case study is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

The third solution to the secondary problem of the case study is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

Constraints and Limiting Factors

The constraints to the first proposed solution to the core problem of the case study are… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin interdum semper sagittis. Aenean felis nibh, fermentum at condimentum sed, tincidunt at lectus. Ut vulputate dictum porta. Nunc venenatis lorem augue, a tempus ligula condimentum sit amet. Proin accumsan tortor sed molestie ultricies. Duis malesuada mi et quam sollicitudin interdum. Sed sed cursus odio, at pulvinar ligula. Proin ornare nibh ut dolor molestie, ac pellentesque orci fringilla. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nulla sit amet fringilla odio. Etiam tempor aliquam purus at ultricies. Sed ultrices justo non imperdiet rhoncus. Nam interdum purus vitae sem tristique, eu tempus justo semper. Integer in cursus neque. Pellentesque faucibus fermentum tortor. Curabitur dictum turpis vitae efficitur auctor.

The constraints to the second proposed solution to the core problem of the case study are… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

The constraints to the third proposed solution to the core problem of the case study are… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

The constraints to the first proposed solution to the secondary problem of the case study are… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin interdum semper sagittis. Aenean felis nibh, fermentum at condimentum sed, tincidunt at lectus. Ut vulputate dictum porta. Nunc venenatis lorem augue, a tempus ligula condimentum sit amet. Proin accumsan tortor sed molestie ultricies. Duis malesuada mi et quam sollicitudin interdum. Sed sed cursus odio, at pulvinar ligula. Proin ornare nibh ut dolor molestie, ac pellentesque orci fringilla. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nulla sit amet fringilla odio. Etiam tempor aliquam purus at ultricies. Sed ultrices justo non imperdiet rhoncus. Nam interdum purus vitae sem tristique, eu tempus justo semper. Integer in cursus neque. Pellentesque faucibus fermentum tortor. Curabitur dictum turpis vitae efficitur auctor.

The constraints to the second proposed solution to the secondary problem of the case study are… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

The constraints to the third proposed solution to the secondary problem of the case study are… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

Implementation of Best Solution

The best solution to the core problem is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin interdum semper sagittis. Aenean felis nibh, fermentum at condimentum sed, tincidunt at lectus. Ut vulputate dictum porta. Nunc venenatis lorem augue, a tempus ligula condimentum sit amet. Proin accumsan tortor sed molestie ultricies. Duis malesuada mi et quam sollicitudin interdum. Sed sed cursus odio, at pulvinar ligula. Proin ornare nibh ut dolor molestie, ac pellentesque orci fringilla. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nulla sit amet fringilla odio. Etiam tempor aliquam purus at ultricies. Sed ultrices justo non imperdiet rhoncus. Nam interdum purus vitae sem tristique, eu tempus justo semper. Integer in cursus neque. Pellentesque faucibus fermentum tortor. Curabitur dictum turpis vitae efficitur auctor.

The best solution to the secondary problem is… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

Evaluate Leadership Decisions

The first leadership concept used was…The expected outcome(s) of this leadership concept is (are)… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Proin interdum semper sagittis. Aenean felis nibh, fermentum at condimentum sed, tincidunt at lectus. Ut vulputate dictum porta. Nunc venenatis lorem augue, a tempus ligula condimentum sit amet. Proin accumsan tortor sed molestie ultricies. Duis malesuada mi et quam sollicitudin interdum. Sed sed cursus odio, at pulvinar ligula. Proin ornare nibh ut dolor molestie, ac pellentesque orci fringilla. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nulla sit amet fringilla odio. Etiam tempor aliquam purus at ultricies. Sed ultrices justo non imperdiet rhoncus. Nam interdum purus vitae sem tristique, eu tempus justo semper. Integer in cursus neque. Pellentesque faucibus fermentum tortor. Curabitur dictum turpis vitae efficitur auctor.

The second leadership concept used was…The expected outcome(s) of this leadership concept is (are)… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

The third leadership concept used was…The expected outcome(s) of this leadership concept is (are)… THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

A biblical concept that Welch could have used is… The expected outcome(s) of this biblical concept is (are)… It is best to include Scripture related to your biblical concept. THIS IS FILLER TEXT – YOUR WRITING SHOULD BE PLACED IN LIEU OF THIS FILLER TEXT. Nam dignissim mollis porta. Mauris at faucibus mi. Pellentesque nisi nulla, luctus non vestibulum aliquam, hendrerit et urna. Sed malesuada nulla sem, at bibendum neque convallis et. Ut quis ullamcorper enim. Pellentesque elit metus, fermentum sit amet orci non, lacinia vulputate justo. Ut tincidunt in sem sit amet vulputate.

Examples of in-text APA formatting:

APA format for a direct quote under 40 words is: (Author’s last name, year of publication, p. x).
APA format for paraphrasing is: (Author’s last name, year of publication).

Example of a References page:

References
Buckingham, M. (2005). What great managers do. Engineering Management Review, 33(2), 14-25. doi:10.1109/EMR.2005.26742
Butler, T., & Waldroop, J. (1999, September). The art of retaining your best people. Harvard Business Review, 77, 144-152. doi:10.1225/4282
Chapman, G. (n.d.). Understanding the five love languages. Retrieved from Focus on the Family: Retrieved from http://www.focusonthefamily.com/marriage/communication-and-conflict/learn-to-speak-your-spouses-love-language/understanding-the-five-love-languages
Griffin, R. W., & Moorhead, G. (2014). Organizational behavior: Managing people and organizations (11 ed.). Mason, OH: Cengage.
Halvorson, C. (2014, February 6). The ultimate guide to workplace motivation. Retrieved from wheniwork.com: http://wheniwork.com/blog/the-ultimate-guide-to-workplace-motivation/
Lipman, V. (2013, 3 18). 5 easy ways to motivate – and demotivate – employees. Retrieved from www.Forbes.com: http://www.forbes.com/sites/victorlipman/2013/03/18/5-easy-ways-to-motivate-and-demotivate-employees/
Ryan, R. M., & Deci, E. L. (2000). Intrinsic and extrinsic motivations: Classis definitions and new directions. Contemporary Educational Psychology, 25, 54-67. doi:10.1006/ceps.199.1020
Sultan, S. (2012). Examining the job characteristics: A matter of employees’ work motivation and job satisfaction. Journal of Behavioural Sciences, 22(2), 13-25.

9 – 3 9 9 – 1 5 0

R E V : M A Y 3 , 2 0 0 5

________________________________________________________________________________________________________________

Research Associate Meg Wozny prepared this case under the supervision of Professor Christopher A. Bartlett. HBS cases are dev eloped solely as
the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective
management

Copyright © 1999 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publicatio n may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording, or otherwise—without the permission of Harvard Business School.

C H R I S T O P H E R A . B A R T L E T T

M E G W O Z N Y

GE’s Two-Decade Transformation: Jack Welch’s
Leadership

On September 7, 2001, Jack Welch stepped down as CEO of General Electric. The sense of pride he
felt about the company’s performance during the previous two decades seemed justified judging by
the many accolades GE was receiving. For the third consecutive year, it had not only been named
Fortune’s “Most Admired Company in the United States,” but also Financial Times’ “Most Admired
Company in the World.” And, on the eve of his retirement, Fortune had named Welch “Manager of
the Century” in recognition of his personal contribution to GE’s outstanding 20 year record.

Yet while the mood at GE’s 2001 annual meeting had clearly been upbeat, some shareholders
wondered whether anyone could sustain the blistering pace of change and growth characteristic of
the Welch era. And specifically, many worried if any successor could generate the 23% per annum
total shareholder return Welch had delivered in his two decades leading GE. It would be a tough act
to follow. (See Exhibit 1 for financial summary of Welch’s era at GE.)

The GE Heritage

Founded in 1878 by Thomas Edison, General Electric grew from its early focus on the generation,
distribution, and use of electric power to become, a hundred years later, one of the world’s leading
diversified industrial companies. A century later, in addition to its core businesses in power
generation, household appliances, and lighting, the company was also engaged in businesses as
diverse as aircraft engines, medical systems, and diesel locomotives.

Long regarded as a bellwether of American management practices, GE was constantly undergoing
change. In the 1930s, it was a model of the era’s highly centralized, tightly controlled corporate form.
By the 1950s, GE had delegated responsibility to hundreds of department managers, leading a trend
towards greater decentralization. But a subsequent period of “profitless growth” in the 1960s caused
the company to strengthen its corporate staffs and develop sophisticated strategic planning systems.
Again, GE found itself at the leading edge of management practice.

When Reg Jones, Welch’s predecessor, became CEO in 1973, he inherited the company that had
just completed a major reorganization. Overlaying its 10 groups, 46 divisions, and 190 departments

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399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership

were 43 strategic business units designed to support the strategic planning that was so central to GE’s
management process. Jones raised strategic planning to an art form, and GE again became the
benchmark for hundreds of companies that imitated its SBU-based structure and its sophisticated
planning processes. Soon, however, Jones was unable to keep up with reviewing and approving the
massive volumes of information generated by 43 strategic plans. Explaining that “the review burden
had to be carried on more shoulders,” in 1977 he capped GE’s departments, divisions, groups, and
SBUs with a new organizational layer of “sectors,” representing macrobusiness agglomerations such
as consumer products, power systems, or technical products.

In addition to his focus on strategic planning, Jones spent a great deal of time on government
relations, becoming the country’s leading business statesman. During the 1970s, he was voted CEO of
the Year three times by his peers, with one leading business journal dubbing him CEO of the Decade
in 1979. When he retired in 1981, The Wall Street Journal proclaimed Jones a “management legend,”
adding that by handing the reins to Welch, GE had “replaced a legend with a live wire.”

Welch’s Early Priorities: GE’s Restructuring

When the 45-year-old Welch became CEO in April 1981, the U.S. economy was in a recession.
High interest rates and a strong dollar exacerbated the problem, resulting in the country’s highest
unemployment rates since the Depression. To leverage performance in GE’s diverse portfolio of
businesses, the new CEO challenged each to be “better than the best” and set in motion a series of
changes that were to radically restructure the company over the next five years.

#1 or #2: Fix, Sell, or Close

Soon after taking charge, Welch set the standard for each business to become the #1 or #2
competitor in its industry—or to disengage. Asked whether this simple notion represented GE’s
strategy, Welch responded, “You can’t set an overall theme or a single strategy for a corporation as
broad as GE.” By 1983, however, Welch had elaborated this general “#1 or #2” objective into a “three
circle concept” of his vision for GE. (See Exhibit 2.) Businesses were categorized as core (with the
priority of “reinvesting in productivity and quality”), high-technology (challenged to “stay on the
leading edge” by investing in R&D), and services (required to “add outstanding people and make
contiguous acquisitions”). To a question about what he hoped to build at GE, Welch replied:

A decade from now, I would like General Electric 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.1

But as GE managers struggled to build #1 or #2 positions in a recessionary environment and
under attack from global—often Japanese—competitors, Welch’s admonition to “fix, sell, or close”
uncompetitive businesses frequently led to the latter options. Scores of businesses were sold,
including central air-conditioning, housewares, coal mining, and, eventually, even GE’s well-known
consumer electronics business. Between 1981 and 1990, GE freed up over $11 billion of capital by
selling off more than 200 businesses, which had accounted for 25% of 1980 sales. In that same time
frame, the company made over 370 acquisitions, investing more than $21 billion in such major
purchases as Westinghouse’s lighting business, Employers Reinsurance, RCA, Kidder Peabody, and
Thomson/CGR, the French medical imaging company. (See Exhibit 3.)

GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150

Internally, Welch’s insistence that GE become more “lean and agile” resulted in a highly
disciplined destaffing process aimed at all large headquarters groups, including a highly symbolic
50% reduction in the 200-person strategic planning staff. Welch described his motivation:

We don’t need the questioners and checkers, the nitpickers who bog down the process. . . .
Today, each staff person has to ask, “How do I add value? How do I make people on the line
more effective and competitive?”2

As he continued to chip away at bureaucracy, Welch next scrapped GE’s laborious strategic
planning system—and with it, the remaining corporate planning staff. He replaced it with “real time
planning” built around a five-page strategy playbook, which Welch and his 14 key business heads
discussed in shirtsleeves sessions “unencumbered by staff.” Each business’s playbook provided
simple one-page answers to five questions concerning current market dynamics, the competitors’ key
recent activities, the GE business response, the greatest competitive threat over the next three years,
and the GE business’s planned response.

The budgeting process was equally radically redefined. Rather than documenting internally
focused comparisons with past performance, results were now evaluated against external
competitively based criteria: Do sales show increases in market share, for example? Do margins
indicate a cost advantage compared with competition?

In 1985, Welch eliminated the sector level, previously the powerful center of strategic control. (See
Exhibits 4a and 4b.) By reducing the number of hierarchical levels from nine to as few as four, Welch
ensured that all businesses reported directly to him. He said:

We used to have department managers, sector managers, subsector managers, unit
managers, supervisors. We’re driving those titles out… We used to go from the CEO to sectors
to groups to businesses. Now we go from the CEO to businesses. There is nothing else. Zero.3

Through downsizing, destaffing, and delayering, GE eliminated 59,290 salaried and 64,160 hourly
positions between 1981 and 1988; divestiture eliminated an additional 122,700. Even when offset by
the acquisitions, the number of employees at GE declined from 404,000 in 1980 to 330,000 by 1984 and
292,000 by 1989. Between 1981 and 1985, revenues increased modestly from $27.2 billion to $29.2
billion, but operating profits rose dramatically from $1.6 billion to $2.4 billion. This set the base for
strong increases in both sales and earnings in the second half of the decade (see Exhibit 5).

This drastic restructuring in the early- and mid-1980s earned Welch the nickname “Neutron Jack,”
a term that gained currency even among GE managers when the CEO replaced 12 of his 14 business
heads in August 1986. Welch’s new “varsity team” consisted of managers with a strong commitment
to the new management values, a willingness to break with the old GE culture, and most of all, an
ability to take charge and bring about change. Despite his great dislike for a nickname he felt he did
not deserve, Welch kept pushing the organization for more change. The further into the restructuring
he got, the more convinced he became of the need for bold action:

For me, the idea is to shun the incremental and go for the leap… How does an institution
know when the pace is about right? I hope you won’t think I’m being melodramatic if I say
that the institution ought to stretch itself, ought to reach, to the point where it almost comes
unglued… Remember the theory that a manager should have no more than 6 or 7 direct
reports? I say the right number is closer to 10 or 15.4

399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership

The Late 1980s: Second Stage of the Rocket

By the late 1980s, most of GE’s business restructuring was complete, but the organization was still
reeling from culture shock and management exhaustion. Welch was as eager as anyone in GE to
move past the “Neutron-Jack” stage and begin rebuilding the company on its more solid foundations.

The “Software” Initiatives: Work-Out and Best Practices

Years after launching GE’s massive restructuring effort, Welch concluded, “By mid-1988 the
hardware was basically in place. We liked our businesses. Now it was time to focus on the
organization’s software.” He also acknowledged that his priorities were shifting: “A company can
boost productivity by restructuring, removing bureaucracy and downsizing, but it cannot sustain
high productivity without cultural change.”

In 1989, Welch articulated the management style he hoped to make GE’s norm—an approach
based on openness, candor, and facing reality. Simultaneously, he refined the core elements of the
organizational culture he wanted to create—one characterized by speed, simplicity, and self-

confidence.a Over the next few years, he launched two closely linked initiatives—dubbed Work-Out
and Best Practices—aimed at creating the desired culture and management approach.

In late 1988, during one of Welch’s regular visits to teach in the company’s Management
Development Institute, he engaged a group of GE managers in a particularly outspoken session about
the difficulty they were having implementing change back at their operations. In a subsequent
discussion with James Baughman, GE’s director of management development, Welch wondered how
to replicate this type of honest, energetic interaction throughout the company. His objective was to
create the culture of a small company—a place where all felt engaged and everyone had voice.
Together, they developed the idea of a forum where employees could not only speak their minds
about how their business might be run more effectively, but also get immediate responses to their
ideas and proposals. By the time their helicopter touched down at GE’s headquarters, Welch and
Baughman had sketched out a major change initiative they called “Work-Out”—a process designed
to get unnecessary bureaucratic work out of the system while providing a forum in which employees
and their bosses could work out new ways of dealing with each other.

At Welch’s request, Baughman formed a small implementation team and, with the help of two
dozen outside consultants, led the company-wide program rollout. Assigned to one of GE’s
businesses, each consultant facilitated a series of off-site meetings patterned after the open-forum
style of New England town meetings. Groups of 40 to 100 employees were invited to share views
about their business and how it might be improved. The three-day sessions usually began with a talk
by the unit boss, who presented a challenge and a broad agenda. Then, the boss was asked to leave,
allowing employees aided by facilitators to list their problems, debate solutions, and prepare
presentations. On the final day, the bosses returned and were asked to listen to their employees’
analyses and recommendations. The rules of the process required managers to make instant, on-the-

a Interestingly, Welch’s first attempts at articulating and communicating GE’s new cultural values were awkward. For
example, in 1986 he defined 10 desirable cultural “attitudes and policies” which few in GE could remember, let alone practice.
Furthermore, he communicated his new organizational model as the GE Business Engine, a concept that many found
depersonalizing since it seemed to depict people as inputs into a financial machine. Gradually, Welch became more
comfortable articulating cultural values which he continued to refine into what he termed “GE’s social architecture.”
Eventually his concept of The Business Engine evolved to become The Human Engine.

GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150

spot decisions about each proposal, in front of everyone to 80% of proposals. If the manager needed
more information, he or she had to charter a team to get it by an agreed-upon decision date.

Armand Lauzon, a manager at a GE Aircraft Engine factory, described to Fortune how he felt as
his employees presented him with their suggestions in a room where they had carefully arranged the
seating so his boss was behind him. “I was wringing wet within half an hour,” he said. “They had 10

proposals; I had about a minute to say yes or no to each one. And I couldn’t make eye contact with
my boss without turning around, which would show everyone in the room I was chickenshit.” In
total, Lauzon supported all but eight of the 108 proposals.

By mid-1992, over 200,000 GE employees—over two-thirds of the workforce—had participated in
Work-Out, although the exact number was hard to determine, since Welch insisted that none of the
meetings be documented. “You’re just going to end up with more bureaucracy,” he said. What was
clear, however, was that productivity increases, which had been growing at an average annual rate of

2% between 1981 and 1987, doubled to a 4% annual rate between 1988 and 1992.b

As Work-Out was getting started, Welch’s relentless pursuit of ideas to increase productivity
resulted in the birth of a related movement called Best Practices. In the summer of 1988, Welch gave
Michael Frazier of GE’s Business Development department a simple challenge: How can we learn
from other companies that are achieving higher productivity growth than GE? Frazier selected nine
companies, including Ford, Hewlett Packard, Xerox, and Toshiba, with different best practices to
study. In addition to specific tools and practices, Frazier’s team also identified several characteristics
common to the successful companies: they focused more on developing effective processes than
controlling individual activities; customer satisfaction was their main gauge of performance; they
treated their suppliers as partners; and they emphasized the need for a constant stream of high-
quality new products designed for efficient manufacturing.

On reviewing Frazier’s report, Welch became an instant convert and committed to a major new
training program to introduce Best Practices thinking throughout the organization, integrating it into
the ongoing agenda of Work-Out teams. As a result of the Best Practices program, many GE
managers began to realize they were managing and measuring the wrong things. (Said one, “We
should have focused more on how things get done than on just what got done.”) Subsequently, several
units began radically revising their whole work approach. For example, the head of the corporate
audit staff explained: “When I started 10 years ago, the first thing I did was count the $5,000 in the
petty cash box. Today, we look at the $5 million in inventory on the floor, searching for process
improvements that will bring it down.”

Going Global

During the early- and mid-1980s, internationalization had remained a back-burner issue at GE,
but strong advocates of globalization such as Paolo Fresco, the Italian-born president of GE Europe,
understood why Welch had to concentrate his early efforts on the rationalization of the U.S.
operations. “It’s very difficult to jump into the world arena if you don’t have a solid base at home,”
said Fresco, “but once the solid base was created, we really took the jump.”

The first rumblings of the emerging globalization priority came in Welch’s challenges to his
Corporate Executive Council meetings during 1986. Reflecting his own early experience in GE

b In GE, productivity was defined by the following calculation: Productivity = Real Revenue (net of price increases)/Real Costs
(net of inflationary increases).

399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership

Plastics, he did not try to impose a corporate globalization strategy, preferring to let each business
take responsibility for implementing a plan appropriate to its particular needs:

When I was 29 years old I bought land in Holland and built the plants there. That was “my
land” for “my business.” I was never interested in the global GE, just the global Plastics
business. The idea of a company being global is nonsense. Businesses are global, not
companies.5

This did not mean, however, that Welch was uninvolved in his business managers’ globalization
plans. In 1987, he focused their attention by raising the bar on GE’s well-known performance
standard: from now on, “#1 or #2” was to be evaluated on world market position. As if to underline
his seriousness, a few months later he announced a major deal with Thomson S.A., in which GE
agreed to exchange its struggling consumer electronics business for the large French electronics
company’s medical imaging business, a business in which GE had a leading global position.

To provide continuing momentum to the internationalization effort, in 1989 Welch appointed
Paolo Fresco as head of International Operations and in 1992 made him a vice-chairman and member
of his four-man corporate executive office. Fresco, a key negotiator on the Thomson swap, continued
to broker numerous international deals: a joint venture with German-based Robert Bosch, a
partnership with Toshiba, and the acquisition of Sovac, the French consumer credit company. As
Eastern Europe opened, he initiated a major thrust into the former Communist bloc, spearheaded by
the purchase of a majority share in the Hungarian lighting company, Tungsram. Fresco became the
locator and champion of new opportunities. “I fill vacuums,” he said. “All these assignments are
temporary—once they are complete, I get out of the way.”

Like subsequent strategic initiatives, globalization was not a one-time effort, but an ongoing
theme that Welch doggedly pursued over the years. Taking advantage of Europe’s economic
downturn, GE invested $17.5 billion in the region between 1989 and 1995, half on new plants and
facilities and half to finance 50 or so acquisitions. Then, in 1995, after the Mexican peso collapsed, the
company again saw the economic uncertainty as a great buying opportunity. Within six months GE
had acquired 16 companies, positioning it to participate in the country’s surprisingly rapid recovery.
And as Asia slipped into crisis in 1997-1998, Welch urged his managers to view it as a buying
opportunity rather than a problem. In Japan alone the company spent $15 billion on acquisitions in
six months.

By 1998, international revenues were $42.8 billion, almost double the level just five years earlier.
The company expected to do almost half its business outside the United States by 2000, compared
with only 20% in 1985, the year before the first international push. More important, global revenues
were growing at almost three times the rate of domestic sales. (See Exhibit 6).

Developing Leaders

While the global thrust and the new cultural initiatives were being implemented, Welch was also
focusing on the huge task of realigning the skill sets—and, more important, the mindsets—of the
company’s 290,000 employees with GE’s new strategic and organizational imperatives. Amidst the
grumbling of those who felt overworked in the new demanding environment and the residual
distrust left over from the layoffs of the 1980s, he recognized his challenge was nothing short of
redefining the implicit contract that GE had with its employees:

GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150

Like many other large companies in the U.S., Europe and Japan, GE has had an implicit
psychological contract based on perceived lifetime employment. This produced a paternal,
feudal, fuzzy kind of loyalty. That kind of loyalty tends to focus people inward. But in today’s
environment, people’s emotional energy must be focused outward on a competitive world…
The new psychological contract, if there is such a thing, is that jobs at GE are the best in the
world for people willing to compete. We have the best training and development resources
and an environment committed to providing opportunities for personal and professional
growth.6

Like all GE managers, Welch grew up in an organization deeply committed to developing its
people. He wanted to harness that tradition and use it to translate his broad cultural changes down to
the individual level. This would mean adapting GE’s well-established human resource systems to his
goals. For example, for as long as he could remember, the company’s top executives had committed
substantial amounts of time to the rigorous management appraisal, development, and succession
planning reviews known as Session C. He began using this process to help achieve his objectives,
predictably adding his own intense personal style to its implementation.

Starting in April and lasting through May each year, Welch and three of his senior executives
visited each of his businesses to review the progress of the company’s top 3,000 executives. Welch
kept particularly close tabs on the upper 500, all of whom had been appointed with his personal
approval. In these multi-day meetings, Welch wanted to be exposed to high-potential managers
presenting results on major projects. In an exhaustive 10- to 12-hour review in each business, Welch
asked the top executive to identify the future leaders, outline planned training and development
plans, and detail succession plans for all key jobs. The exercise reflected his strong belief that good
people were GE’s key assets and had to be managed as a company resource. “I own the people,” he
told his business heads. “You just rent them.”

As these reviews rolled out through GE, all professional-level employees expected honest
feedback about where they were professionally, reasonable expectations about future positions they
could hold, and the specific skills required to get there. Managers at every level used these
discussions as the basis for coaching and developing their staff. (As a role model, Welch estimated he
spent at least 70% of his time on people issues, most of that teaching and developing others.)

A strong believer in incentives, Welch also radically overhauled GE’s compensation package.
From a system driven by narrow-range increases in base salary supplemented by bonuses based on
one’s business performance, he implemented a model in which stock options became the primary
component of management compensation. He expanded the number of options recipients from 300 to
30,000 and began making much more aggressive bonus awards and options allocations strongly tied
to the individual’s performance on the current program priority (globalization, for example, or best
practices initiatives).

Through all of these human resource tools and processes, Welch’s major effort was increasingly
focused on creating an environment in which people could be their best. Entering the 1990s, he
described his objective for GE in these terms:

Ten years from now, we want magazines to write about GE as a place where people have
the freedom to be creative, a place that brings out the best in everybody. An open, fair place
where people have a sense that what they do matters, and where that sense of accomplishment
is rewarded in the pocketbook and the soul. That will be our report card.

399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership
8

A key institution that Welch harnessed to bring about this cultural change was GE’s Crotonville
management development facility. Welch wanted to convert Crotonville from its management
training focus and its role as a reward or a consolation prize for those who missed out on a
promotion to a powerful engine of change in his transformation effort. In the mid-1980s, when he
was cutting costs almost everywhere else, he spent $45 million on new buildings and improvements
at Crotonville. He also hired some experienced academics—Jim Baughman from Harvard and Noel
Tichy from Michigan—to revolutionize Crotonville’s activities.

Under Welch’s direct control and with his personal involvement, Crotonville’s priority became to
develop a generation of leaders aligned to GE’s new vision and cultural norms. Increasingly, it
evolved from a training center to a place where teams of managers worked together on real priority
issues and decided on results-oriented action. And this led to the gradual replacement of outside
faculty by GE insiders acting as discussion leaders. Leading the change was Welch, who twice a
month traveled to Crotonville to teach and interact with GE employees. (“Haven’t missed a session
yet,” he boasted in the late 1990s.) (See Exhibit 7.) It was during one of these sessions that the idea for
Work-Out emerged, and it was at Crotonville that many of the Best Practices sessions were held.

Despite all the individual development and the corporate initiatives, not all managers were able to
achieve Welch’s ideal leadership profile. (See Exhibit 8.) Of greatest concern to the CEO were those
who seemed unwilling or unable to embrace the open, participative values he was espousing. In
1991, he addressed the problem and the seriousness of its consequences:

In our view, leaders, whether on the shop floor or at the top of our businesses, can be
characterized in at least four ways. The first is one who delivers on commitments—financial or
otherwise—and shares the values of our company. His or her future is an easy call. Onward
and upward. The second type of leader is one who does not meet commitments and does not
share our values. Not as pleasant a call, but equally easy. The third is one who misses
commitments but shares the values. He or she usually get a second chance, preferably in a
different environment.

Then there’s the fourth type—the most difficult for many of us to deal with. That leader
delivers on commitments, makes all the numbers, but doesn’t share the values we must have.
This is the individual who typically forces performance out of people rather than inspires it:
the autocrat, the big shot, the tyrant. Too often all of us have looked the other way and
tolerated these “Type 4” managers because “they always deliver”—at least in the short term. 7

To reinforce his intention to identify and weed out Type 4 managers, Welch began rating GE top-
level managers not only on their performance against quantifiable targets but also on the extent to
which they “lived” GE values. Subsequently, many of GE’s 500 officers started using a similar two-
dimensional grid to evaluate and coach their own direct reports. And when coaching failed, Welch
was prepared to take action on the type 4s. “People are removed for having the wrong values,” he
insisted. “We don’t even talk about the numbers.”

To back up this commitment to the new leadership criteria, a few years later GE introduced a 360°
feedback process. Every employee was graded by his or her manager, peers and all subordinates on a
1 to 5 scale in areas such as teambuilding, quality focus, and vision. Welch described it as a powerful
tool for detecting and changing those who “smile up and kick down.” Tied into the evaluation
process and linked to the Session C human resource planning exercise, the 360° feedback became the
means for identifying training needs, coaching opportunities, and, eventually, career planning—
whether that be up, sideways, or out.

GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150

Into the 1990s: The Third Wave

Entering the 1990s, Welch felt that GE’s new foundation had been laid. Despite the slowdown in
the industrial sector in the first few years of the new decade, he was committed to the task of
rebuilding the company at an even more urgent pace. The new initiatives rolled on.

Boundaryless Behavior

Moving beyond the earlier initiatives aimed at strengthening GE’s individual businesses, Welch
began to focus on creating what he called “integrated diversity.” He articulated his vision for GE in
the 1990s as a “boundaryless” company, one characterized by an “open, anti-parochial environment,
friendly toward the seeking and sharing of new ideas, regardless of their origins”—in many ways an
institutionalization of the openness “Work-Out” had initiated and “best practices” transfers had
reinforced. Describing his barrier-free vision for GE, Welch wrote:

The boundaryless company we envision will remove the barriers among engineering,
manufacturing, marketing, sales, and customer service; it will recognize no distinctions
between domestic and foreign operations—we’ll be as comfortable doing business in Budapest
and Seoul as we are in Louisville and Schenectady. A boundaryless organization will ignore or
erase group labels such as “management,” “salaried” or “hourly,” which get in the way of
people working together.8

One of Welch’s most repeated stories of how best practices could be leveraged by boundaryless
behavior described how managers from Canadian GE identified a small New Zealand appliance
maker, Fisher & Paykel, producing a broad range of products very efficiently in its small, low-volume
plant. When the Canadians used the flexible job-shop techniques to increase productivity in their
high-volume factory, the U.S. appliance business became interested. More than 200 managers and
employees from the Louisville plant went to Montreal to study the accomplishments, and soon a
Quick Response program had cut the U.S. production cycle in half and reduced inventory costs by
20%. Not surprisingly, GE’s Appliance Park in Louisville became a “must see” destination for many
other businesses, and within a year, the program had been adapted for businesses as diverse as
locomotives and jet engines.

The CEO gave the abstract concept of boundarylessness teeth not only by repeating such success
stories but also by emphasizing that there was no place at GE for the adherents of the old culture:
“We take people who aren’t boundaryless out of jobs. . . If you’re turf-oriented, self-centered, don’t
share with people and aren’t searching for ideas, you don’t belong here,” he said. He also changed
the criteria for bonuses and options awards to reward idea-seeking and sharing, not just idea
creation. Five years later, Welch had a list of boundarylessness success stories:

We quickly began to learn from each other: productivity solutions from Lighting; “quick
response” asset management from Appliances; transaction effectiveness from GE Capital; cost-
reduction techniques from Aircraft Engines; and global account management from Plastics.9

One of the most impressive examples of the way ideas and expertise spread throughout GE was
the company’s “integration model.” Developed on the lessons drawn from literally hundreds of post-
acquisition reviews, the model guided the actions of managers in any part of the company
responsible for integrating a newly acquired operation: from taking control of the accounts to
realigning the organization, and from identifying and removing “blockers” to implementing GE tools
and programs. By the late 1990s, GE’s integration programs were completed in about 100 days.

399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership

Stretch: Achieving the Impossible

To reinforce his rising managerial expectations, in the early 1990s Welch made a new assault on
GE’s cultural norms. He introduced the notion of “stretch” to set performance targets and described
it as “using dreams to set business targets, with no real idea of how to get there.”10 His objective was
to change the way targets were set and performance was measured by creating an atmosphere that
asked of everyone, “How good can you be?”

Stretch targets did not replace traditional forecasting and objective-setting processes. Managers
still had to hit basic targets—adjusted to recognize the world as it turned out to be, not some rigid
plan negotiated a year earlier. But during the budget cycle they were also required to set higher,
“stretch” goals for their businesses. While managers were not held accountable for these goals, those
who achieved them were rewarded with substantial bonuses or stock options. Said Welch: “Rigorous
budgeting alone is nonsense. I think in terms of . . . what is the best you can do. You soon begin to see
what comes out of a trusting, open environment.”

Within a year of introducing the concept of stretch, Welch was reporting progress:

We used to timidly nudge the peanut along, setting goals of moving from, say, 4.73 in
inventory turns to 4.91, or from 8.53% operating margin to 8.92%; and then indulge in time-
consuming high-level, bureaucratic negotiations to move the number a few hundredths one
way or the other. . . We don’t do that anymore. In a boundaryless organization with a bias for
speed, decimal points are a bore. They inspire or challenge no one, capture no imaginations.
We’re aiming at 10 inventory turns, at 15% operating margins.

By the mid-1990s, stretch goals were an established part of GE’s culture. A senior executive
explained: “People like problem solving. They want to go to that next level. That’s becoming a bigger
driver for the company than Work-Out.” But the introduction of stretch targets did not come without
implementation difficulties. According to Steve Kerr, the head of Crotonville, “You absolutely have
to honor the don’t-punish-failure concept; stretch targets become a disaster without that.” Unless
properly managed, he explained, stretch could easily degenerate into a justification for forcing people
to work 60-hour weeks to achieve impossible goals. “It’s not the number per se, especially because it’s
a made-up number. It’s the process you’re trying to stimulate. You’re trying to get people to think of
fundamentally better ways of performing their work.”

In early 1996, Welch acknowledged that GE did not meet two of its four-year corporate stretch
targets: to increase operating margins from their 1991 level of 10% to 15% by 1995, and inventory
turns from 5 to 10 times. However, after decades of single-digit operating margins and inventory
turns of 4 or 5, GE did achieve an operating margin of 14.4% and inventory turns of almost 7 in 1995.
“In stretching for these ‘impossible’ targets,” said Welch, “we learned to do things faster than we
would have going after ‘doable’ goals, and we have enough confidence now to set new stretch targets
of at least 16% operating margin and more than 10 turns by 1998.”

Service Businesses

In 1994, Welch launched a new strategic initiative designed to reinforce one of his earliest goals: to
reduce GE’s dependence on its traditional industrial products. In the early 1980s, he had initiated the
initial tilt towards service businesses through the acquisition of financial service companies such as
Employers Reinsurance and Kidder, Peabody. “Nearly 60% of GE’s profits now comes from
services,” said Welch in 1995. “Up from 16.4% in 1980. I wish it were 80%.”

GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150
11

To fulfill that wish, Welch began moving to the next stage—a push for product services. During
his annual strategic reviews with senior managers, Welch began to challenge his managers “to
participate in more of the food chain.” While customers would always need high-quality hardware,
Welch argued that GE’s future challenge would be to offset slowing growth for its products by
supplementing them with added-value services. Describing it as one of “the biggest growth
opportunities in [GE’s] history,” he named a cadre of rising executives to focus on the issue. At the
same time, he asked Vice Chairman Paolo Fresco to set up a Services Council through which top
managers could exchange ideas.

Soon, all GE’s businesses were exploring new service-based growth opportunities. The medical
business, for example, developed a concept called “In Site.” This involved placing diagnostic sensors
and communications capability into their installed base of CT scanners, MRI equipment, and other
GE medical devices. The system linked the equipment directly to GE’s on-line service center,
continuously diagnosing its operating condition in real time. Soon, GE was offering its remote
diagnostics and other services to all medical equipment—including non-GE products.

Like other internal “best practice” service examples, the “In Site” story was shared in the Services
Council, and soon online diagnostic technology was being transferred to other GE businesses. In
Aircraft Engines, critical operating parameters of GE jet engines were monitored by GE Service
experts while the engines were in flight, providing the company with a major value-added benefit for
its customers. The same-real time diagnostic concepts were also applied in GE’s power systems
business, and other businesses had plans to develop remote diagnostic capability as well.

According to Welch, the opportunity for growth in product services was unlimited. With an
advantage unique in the world—an installed base of some 9,000 GE commercial jet engines, 10,000
turbines, 13,000 locomotives, and 84,000 major pieces of medical diagnostic imaging equipment—he
felt GE had an incredibly strong platform on which to build. Commented Lewis Edelheit, GE’s senior
VP for Corporate Research and Development:

A few years ago, businesses were seen as a pyramid, with the base as the product and the
other elements—services, manufacturing processes and information—resting on that base. We
are now looking at turning the pyramid upside down. The product will become just one piece
of the picture—the tip of that inverted pyramid. The biggest growth opportunities may come
from providing services to the customer: providing the customer with ways to become more
productive—and with information so valuable the customer will pay for it.

By 1996, GE had built an $8 billion equipment services business, which was growing much faster
than the underlying product businesses. Equally important, in Welch’s view, it was changing internal
mindsets from selling products to “helping our customers to win.” GE’s product services were to be
aimed at making customers’ existing assets—power plants, locomotives, airplanes, factories, hospital
equipment and the like—more productive. Yet while GE was helping its customers reduce their
capital outlays, its managers were also shifting demand from low-margin products to their newer
high-profit services with margins almost twice the company average.

This initiative led to a new round of acquisitions. In 1997 alone, GE made 20 service-related
acquisitions and joint ventures, including a $1.5 billion acquisition of a jet engine service business and
the $600 million purchase of a global power generation equipment service company. GE’s radical
business shift over two decades led Welch to claim, “We have changed the very nature of what we do
for a living. Today, services account for two-thirds of our revenues.” (See Exhibit 9.)

399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership
12

Closing Out the Decade: Raising the Bar

As he entered the last half of the decade, Welch was aware that he would reach GE’s mandatory
retirement age in 2001. Yet his commitment to keep building GE was undiminished, despite critics
who continued to question if the company could keep adding value to such a highly diversified
business portfolio. In the 1995 Annual Report, he tackled the issue head on:

The hottest trend in business is the rush toward breaking up multi-business companies. The
obvious question to GE, the world’s largest multi-business company, was, “When are you
going to do it?” The short answer is that we’re not. . . . We are a company intent on getting
bigger, not smaller. Our only answer to the trendy question “What do you intend to spin off?”
is “Cash—and lots of it.”

Despite hospitalization for triple bypass surgery in 1995, he showed no signs of slowing down.
Indeed, many felt he gained new energy in his post-operative state as the pressure for performance
and new initiatives continued.

Six Sigma Quality Initiative

When a 1995 company survey showed that GE employees were dissatisfied with the quality of its
products and processes, Welch met with Lawrence Bossidy, an old friend who had left GE in 1991 to
become CEO of AlliedSignal Inc. Welch learned how the Six Sigma quality program Bossidy had
borrowed from Motorola Inc. had helped AlliedSignal dramatically improve quality, lower costs, and
increase productivity. Immediately, he invited Bossidy to GE’s next Corporate Executive Council
meeting. His presentation of the AlliedSignal program won universal rave reviews.

After the meeting, Welch asked Gary Reiner, vice president for Business Development, to lead a
quality initiative for GE. Reiner undertook a detailed study of the impact of quality programs at
companies like Motorola and AlliedSignal. His analysis concluded that GE was operating at error
rates ten thousand times the Six Sigma quality level of 3.4 defects per million operations.
Furthermore, he estimated that the gap was costing the company between $8 billion and $12 billion a
year in inefficiencies and lost productivity. On the basis of Reiner’s findings, at GE’s 1996 annual
gathering of its 500 top managers in Boca Raton, Welch announced a goal of reaching Six Sigma
quality levels company-wide by the year 2000, describing the program as “the biggest opportunity
for growth, increased profitability, and individual employee satisfaction in the history of our
company.”

Like all initiatives announced in Boca (services, globalization, etc.), Six Sigma quality was more
than a slogan: it was a well-developed program, with a detailed plan for its implementation.
Furthermore, it would be monitored throughout the year in a carefully linked series of management
meetings that Welch started to refer to as GE’s “operating system”—the series of planning, resource
allocation, review, and communication meetings that were at the heart of its management process.
The Boca initiative announcement was followed up by a first progress report at the two-day March
CEC meeting; then in the April Session C reviews, Welch would check how key human resources had
been deployed against the target; the July strategic review sessions would review the impact of the
initiative on each business’s three-year outlook; October’s Officers Meeting tracked progress and
showcased best practice; and the November operating plan reviews would fold the impact into the
following year’s forecasts. (See Exhibit 10.) Said Welch, “We are relentless.”

GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150
13

Six Sigma participation was not optional, and Welch tied 40% of bonus to an individual’s Six
Sigma objectives. To provide managers the skills, Reiner designed a massive training of thousands of
managers to create a cadre of “Green Belts,” “Black Belts,” and “Master Black Belts” in Six Sigma
quality. “Green Belt” training took about four weeks, followed by implementation of a five-month
project aimed at improving quality. Black Belts required six weeks of instruction in statistics, data
analysis, and other Six Sigma tools which prepared the candidate to undertake three major quality
projects that resulted in measurable performance increases. Master Black Belts—full-time Six Sigma
instructors—mentored the Black Belt candidates through the two-year process.

At the January 1998 Boca Raton meeting, speakers from across the company and around the world
presented Six Sigma best practice and achievements. Managers from Medical Systems described how
Six Sigma designs produced a tenfold increase in the life of CT scanner x-ray tubes; the railcar leasing
business described a 62% reduction in turnaround time at its repair shops, making it two to three
times faster than its nearest rival; and a team from the plastics business described how the Six Sigma
process added 300 million pounds of new capacity, equivalent to a “free plant.” In all, 30,000 Six
Sigma projects had been initiated in the prior year.

At the April 1999 Annual Meeting, Welch announced that in the first two years of Six Sigma, GE
had invested $500 million to train the entire professional workforce of 85,000. In addition, 5,000
managers had been appointed to work on the program full-time as Black Belts and Master Black
Belts, leading Welch to claim “they have begun to change the DNA of GE to one whose central strand
is quality.” Returns of $750 million over the investment exceeded expectations, and the company was
forecasting additional returns of $1.5 billion in 1999 (Exhibit 11). Clearly delighted by the program,
Welch stated, “In nearly four decades with GE, I have never seen a company initiative move so
willingly and so rapidly in pursuit of a big idea.”

“A Players” with “Four E’s”

The closer he got to his planned retirement date, the more Welch seemed to focus on the quality of
the organization he would leave to his successor. While he felt he had assembled a first-class team of
leaders at the top of the company, he wanted to continue upgrading quality deep in the organization.
This implied not only raising the bar on new hires but also weeding out those who did not meet GE’s
high standards. Modifying his earlier language of four management types, he began describing GE as
a company that wanted only “A Players”—individuals with vision, leadership, energy, and courage.
He described what he was trying to achieve:

The GE leader sees this company for what it truly is: the largest petri dish of business
innovation in the world. We have roughly 350 business segments. We see them as 350
laboratories whose ideas are there to be shared, learned, and spread as fast as we can. The
leader sees that sharing and spreading near the top of his or her responsibilities.

“A Players” were characterized by what Welch described as the 4E’s—energy (“excited by ideas
and attracted to turbulence because of the opportunity it brings”), ability to energize others
(“infecting everyone with their enthusiasm for an idea and having everyone dreaming the same big
dreams”), edge (“the ability to make tough calls”) and execution (“the consistent ability to turn vision
into results”).

To meet the company’s need for exceptional leadership talent, Welch insisted that GE move to
phase three of its globalization initiative. Beyond focusing on global markets and global sources—the
earlier two phases of globalization—he urged his managers to expand their efforts in “globalizing the

399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership
14

intellect of the company.” At the same time, he urged his top management group to take strong
action to upgrade the quality of their existing employees:

We’re an A-plus company. We want only A players. We can get anyone we want. Shame on
any of you who aren’t facing into your less-than-the-best. Take care of your best. Reward them.
Promote them. Pay them well. Give them a lot of [stock] options and don’t spend all that time
trying to work plans to get Cs to be Bs. Move them on out early. It’s a contribution.16

To help clarify those decisions, the company implemented a performance appraisal system that
required every manager to rank each of his or her employees into one of five categories based on his
or her long-term performance—the “top” 10% as 1s, the “strong” 15% as 2s, the “highly valued” 50%

as 3s, the “borderline” 15% as 4s, and the “least effective” 10% as 5s.c Every group, even a 10-person
team, had to be ranked on this so-called “vitality curve.” All 1s and most 2s received stock options
but anyone rated a 5 had to go. Welch elaborated on the need to weed out poor performers: “With the
5s it’s clear as a bell. I think they know it, and you know it. It’s better for everyone. They go on to a
new place, a new life, a new start.” At the other end of the scale, Welch expected managers to take
action on their top performers to develop them: “You send your top 10 on and see how many of them
get into the top 10 of the whole business.”

Welch knew that the nurturing and continuously upgrading the quality of management was one
of the main keys to GE’s success. He felt that the talent he amassed over 18 years—especially at the
senior management levels—was of a significantly higher quality than in past years. “I’ve got all A
players in the Corporate Council. It wasn’t like that before. I’m really pleased about that,” he said.

Toward Retirement: One More Initiative

Just when the organization felt Welch had put his final stamp on GE, at the 1999 Operating
Managers’ Meeting in Boca, the 64-year-old CEO introduced his fourth strategic initiative—e-

business.d Describing the impact of the Internet as “the biggest change I have ever seen,” he launched
a program he described as “destroyyourbusiness.com.” Within two months each unit had a full-time
dyb.com team focused on the challenge of redefining its business model before someone else did.
“Change means opportunity,” he told them. “And this is our greatest opportunity yet.”

Yet Welch also knew that GE was late to the Internet party. As he acknowledged in his address to
shareholders three months after the Boca meeting, “Big companies like us were frightened by the
unfamiliarity of the technology. We thought this was mysterious, Nobel Prize stuff, the province of
the wild-eyed and purple haired.” But the more he explored the Internet and talked to people about
it, the more Welch came to believe that, through processes like Six Sigma, GE had done the really
hard work of building the assets needed to support e-business—like strong brands, top ranked
product reliability, great fulfillment capability, and excellent service quality. “It’s much harder for a

c Eventually, the five categories were reduced to three—the top 20%, the high-performance 70%, and the bottom 10%. The
practice of counseling out the bottom 10% continued under the philosophy of “improve or move.”

d The three earlier ones were globalization, services, and Six Sigma. For more detail on the implementation of GE’s strategic
initiatives across its business see “GE’s Digital Revolution: Redefining the E in GE” (9-302-001).

GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150
15

dot com startup to challenge us when they don’t have the fundamentals down,” he said. “They’re
popcorn stands without a real business or operating capabilities.”

As the organization cranked up to push the new initiative through the monthly schedule of
reviews that GE operating system required, Welch was impressed by early results from the dyb.com
teams. “Digitizing the company and developing e-business models is easier—not harder—than we
ever imagined,” he said. But others were more sanguine. Said David Mark, a partner at McKinsey
and Co., “It’s going to take a decade for this to play out. I don’t think it’s a simple transition.” If Mark
was correct, building GE’s e-business would be a long-term challenge for Welch’s successor.

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GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150

Exhibit 2 The Three-Circle Vision’ for GE, 1982

SERVICES

GECC Information

Construction

& Engineering

Nuclear

Services

TECHNOLOGY

Industrial Electronics

Medical Systems

Materials

Aerospace

Aircraft Engines

CORE

Lighting

Major Appliance

Motor

Transportation

Turbine

Construction

Equipment

SUPPORT

Ladd Petroleum

Semiconductor

GE Trading Co.

Utah Mining

VENTURES

Calma

OUTSIDE

Housewares

Central Air-Conditioning

TV&Audio

Cable

Mobile

Power Delivery

Radio Stations

Exhibit 3 Changes in the GE Business Portfolio

MAJOR ACQUISITIONS

($21Billion Total)

 Calma (CAD/CAM equipment)

 Intersil (semiconductors)

 Employers Reinsurance Corp.

 Decimus (computer leasing)

 RCA (NBC Television, aerospace, electronics)

 Kidder, Peabody (investment banking)

 Polaris (aircraft leasing)

 Genstar (container leasing)

 Thomson/CGR (medical equipment)

 Gelco (portable building leasing)

 Borg-Warner Chemicals (plastics)

 Montgomery Ward Credit (credit cards)

 Roper (appliances)

 Penske Leasing (truck leasing)

 Financial Guaranty Insurance Co.

 Thungsram (light bulbs)

 Burton Group Financial Services

 Travelers Mortgage (mortgage services)

 Thorn Lighting (light bulbs)

 Financial News Network (cable network)

 Chase Manhattan Leasing

 Itel Containers (container leasing)

 Harrods/House of Fraser Credit Cards

MAJOR DIVESTITURES

($11 Billion Total)

 Central Air Conditioning

 Pathfinder Mines

 Broadcasting Properties (non-RCA TV &
radio stations)

 Utah International (mining)

 Housewares (small appliances)

 Family Financial Services

 RCA Records

 Nacolah Life Insurance (RCA’s)

 Coronet Carpets (RCA’s)

 Consumer Electronics (TV sets)

 Carboloy (industrial cutting tools)

 NBC Radio Networks

 Roper Outdoor Lawn Equipment

 GE Solid State (semiconductors)

 Calma (CAD/CAM equipment)

 RCA Globcomm international telex)

 Ladd Petroleum (oil exploration & refining)

 RCA Columbia Home Video

 Auto Auctions (auctions of used cars)

Source: The Business Engine.

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399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership

Exhibit 6 Growth through Globalization

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Source: GE Annual Report, 1998.

GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150

Exhibit 7 Welch at GE’s Crotonville Center

A typical note Welch sent to 30 participants to prepare for his session of GE’s Executive
Development Course (EDC):

Dear EDC Participants,

I’m looking forward to an exciting time with you tomorrow. I’ve included here a few thoughts for
you to think about prior to our session:

As a group—

Situation: Tomorrow you are appointed CEO of GE.

 What would you do in first 30 days?

 Do you have a current “vision” of what to do?

 How would you go about developing one?

 Present your best shot at a vision.

 How would you go about “selling” the vision?

 What foundations would you build on?

 What current practices would you jettison?

Individually—

1. Please be prepared to describe a leadership dilemma that you have faced in the
past 12 months, i.e., plant closing, work transfer, HR, buy or sell a business, etc.

2. Think about what you would recommend to accelerate the Quality drive across
the company.

3. I’ll be talking about “A, B & C” players. What are your thoughts on just what
makes up such a player?

4. I’ll also be talking about energy/energizing/edge as key characteristics of
today’s leaders. Do you agree? Would you broaden this? How?

I’m looking forward to a fun time, and I know I’ll leave a lot smarter than when I arrived.

—Jack

Source: The Leadership Engine.

399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership

Exhibit 8 GE Leadership Capabilities

 Create a clear, simple, reality-based,
customer-focused vision and are able to
communicate it straightforwardly to all
constituencies.

 Understand accountability and
commitment and are decisive . . . set and
meet aggressive targets . . . always with
unyielding integrity.

 Have the self-confidence to empower
others and behave in a boundaryless
fashion… believe in and are committed to
Work-Out as a means of empowerment . . .
be open to ideas from anywhere.

 Have a passion for excellence . . . hate
bureaucracy and all the nonsense that
comes with it.

 Have, or have the capacity to develop
global brains and global sensitivity and are
comfortable building diverse global teams.

 Stimulate and relish change . . . are not
frightened or paralyzed by it. See change
as opportunity, not just a threat.

 Have enormous energy and the ability to
energize and invigorate others.
Understand speed as a competitive
advantage and see the total organizational
benefits that can be derived from a focus
on speed.

Source: 1992 Annual Report.

Exhibit 9 Growth in GE’s Service Businesses

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Exhibit 11 Costs and Benefits of GE’s Six Sigma Program

Six Sigma Results: 1996-1999

$500

$1,000

$1,500

$2,000

$2,500

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Estimate

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Source: GE Annual Report, 1998.

Benefit Cost

GE’s Two-Decade Transformation: Jack Welch’s Leadership 399-150

Sources and References

Byrne, John A., “Jack,” Business Week, June 8, 1998.

Cosco, Joseph P., “General Electric Works it All Out,” Journal of Business Strategy, May-June, 1994.

Filipczak, Bob, “CEOs Who Train,” Training, June, 1996.

Grant, Linda, “GE: The Envelope, Please,” Fortune, June 26, 1995.

Hodgetts, Richard M., “A Conversation with Steve Kerr, GE’s Chief Learning Officer,” Organizational Dynamics,
March 22, 1996.

Kandebo, Stanley, “Engine Services Critical to GE Strategy,” Aviation Week, February 23, 1998.

Koenig, Peter, “If Europe’s Dead, Why is GE Investing Billions There?” Fortune, September 9, 1996.

Lorenz, Christopher, “The Alliance-Maker,” Financial Times, April 14, 1989.

Norman, James R., “A Very Nimble Elephant,” Forbes, October 10, 1994.

Rifkin, Glenn, “GE: Brining Good Leaders to Life,” Forbes, April 8, 1996.

Tichy, M. Noel and Eli Cohen, The Leadership Engine: How Winning Companies Build Leaders at Every Level
(HarperBusiness, New York, 1997).

Tichy, M. Noel and Eli Cohen, “The Teaching Organization,” Training & Development, July 1998.

Tichy, M. Noel and Stratford Sherman, Control Your Destiny or Someone Else Will (HarperBusiness, New York,
1994).

Tichy, M. Noel and Stratford Sherman, “Walking the Talk at GE,” Training & Development, June 1996.

Slater, Robert, Get Better or Get Beaten! (McGraw-Hill, New York, 1996).

Smart, Tim, “GE’s Brave New World,” Business Week, November 8, 1993.

Stewart, Thomas A., “GE Keeps Those Ideas Coming,” Fortune, August 12, 1991.

Endnotes

1 “General Electric: 1984” (HBS Case No. 385-315), by Professor Francis J. Aguilar and Richard G. Hamermesh

and RA Caroline Brainard. © 1985 by the President and Fellows of Harvard College.
2 Noel Tichy and Ram Charan, “Speed, Simplicity, Self-Confidence: An Interview with Jack Welch,” Harvard

Business Review, September-October 1989.
3 Anon, “GE Chief Hopes to Shape Agile Giant,” Los Angeles Times, June 1, 1988.
4 Tichy and Charan, op. cit., p. 112.
5 Robert Slater, Jack Welch and the GE Way: Management Insights and Leadership Secrets of the Legendary CEO

(McGraw-Hill), 1998, p. 195.
6 Tichy and Charan, op. cit., p. 120.
7 GE Annual Report, 1991.
8 GE Annual Report, 1989.
9 GE Annual Report, 1995.
10 GE Annual Report, 1993.
11 GE Annual Report, 1993.
12 “Stretch Goals: The Dark Side of Asking for Miracles,” interview excerpts with Steve Kerr, GE’s Vice President

of Leadership Development. Fortune, November 13, 1995.
13 GE Annual Report, 1995.
14 Tim Smart, “Jack Welch’s Encore,” Fortune, October 28, 1996.
15 Lewis Edelheit, “GE’s R&D Strategy: Be Vital,” Research Technology Management, March-April, 1998.
16 Slater, op. cit., p. 39.

Summaryof Background and facts

Teacher feed back Shanae, you did well overall. I recommend ensuring each requirement in the grading rubric is addressed. For example, this section should include a brief bio of Welch and key citicisms for summary of background and facts.

In 1878, Thomas Edison founded the general electric thus one of the first worlds’ leading industrial company that is more diversified. Due to the change within the GE regarding history, it proves that it is one of the leading companies in the sector due to modern management practices. (Griffin et al, n.d.) Before the appointment of Jack Welch as the new CEO, many different strategies were being used to achieve the target goals. The company having a swing of structures necessary for management with the necessary practices for the foundation of the GE. (Welch, n.d.) In t the early 1930s the company was controlling the corporate environment tightly with a highly centralized stimulus with the structure shifting to be more decentralized in 1950.

In 1973 Welch’s predecessor inherited the company and thus the company is led to become a professional bureaucracy due to the strategic business plans and handed over the company in Welch while in need of some restructuring. Jack Welch is a very energetic and hard-hitting man, he is known due to his words, “control your destiny or someone else will,” during his 20 years as the CEO of the GE. He made tremendous changes in the culture of the company, goals, values and structure thus leading to the six major change programs. (Carruthers, 2016) Restructuring of the management within the company was his first core idea for success. He, therefore, set new standards for the business within the GE thus ensuring all the businesses under the umbrella of the company being one of the best in the field.

When the operating profit began to show its effects on the massive restructuring and thus in four years increasing to $2.4 billion from $1.6 billion. The software initiatives, being the next step of Welch, is one of the first in his change programs of rewriting the software driving the company’s decisions and initiatives. With the incorporation of the process of working out thus the program highlighting the best traits for the company to fairly compete with the GE.

Redefining leadership and globalization being factors, he rewrote the culture of the GE and realized they needed to expand to the global market thus a need in the improvement of skills and mindsets of the employees of GE. (General Electric, 2014) Redefining therefore took effect from the implicit psychological contrasts of the GE employees, where Welch advocated for the idea of constructive criticism and honest feedback. Stretching of the objectives led to the challenge of performing targets thus the question of, “How good can you be?” (Iyer, 2012) with the targets and stretch goals put in place in the culture of the GE. (Bartlett & Wozny, 2005)

In summary, the service business development, the quality of six sigma, the final push E-Commerce stipulate the strategic initiatives employed and the transitioning of GE in the presence of online. Before the retirement of Welch, six sigmas was one of his last initiatives for a quality program. In 1994, the launching of the service business development reduced the dependence of the company to the industrial products.

Statement of Core Problem

Teacher comment you did a good job fulfilling the requirements set in the grading rubric and also included relevant information from the case study. However, the correct core problem of the GE case study is the reorganization of the entire GE company taken by Welch. Please update this section to show the true core problem (by week 8). Lastly, I recommend using a simple sentence such as, “The core problem of the case study is…”. This alerts the reader to the direction of the paper. Be sure to review the comments inserted in your paper regarding grammical errors feed back for statement of core problem

As he took power as the new CEO of General Electric, Jack Welch main aim and the statement of the core problem was that he only wanted to compete in the areas that the company held the first or the second place. This gave birth to the now General Electric’s famous strategy of becoming the first or second globally (Arthur, 2017). This meant that the company had to leave the other areas of competition to focus on these few areas. This caused him to instigate major company reshuffles and restructures that eventually caused a lot of damage to the company.

Severity of the Core Problem

By withdrawing the sectors of the company that were not performing in the number one or two position, the company started a policy where annually 10% of the employees were laid off and more funds were used to regain the company’s stock (Galli, 2017). the situation was severe to a point where if Jack noticed that a certain section of the company was not performing as expected, he would order the manager to device ways of making the division either number one or two or else the whole division would be abolished. This means that all the staff in any underperforming division would lose their jobs regardless of their position (Arthur, 2017). Jack believed that it was safer to direct their attention to industrial activities that had regulator interaction and thus acquires the RCA defense business and the Thomson’s medical device business.

Implications of the Core Problem

Jack’s strategies, however, had severe implications. Firstly, the annual 10% laying off staff caused a lot of American to lose their jobs. With his commanding intervention style, Jack did not give room for employees or underperforming divisions to adjust to his new management style and expectations as required; moving to the first or second position requires times effort and resources. This in turn did not give these divisions any chance of survival under his authority and thus their closure (Galli, 2017). The American culture of General Electric was also lost due to the major changes that came with his administration. This is because Jack Welch turned General Electric from an industrial giant, by getting rid of its electronic business for its consumers, to an entity that dealt with financial assets. As much as it brought the company a lot of funds, it got rid of the company’s culture and values.

The restructuring and reshuffling of the company brought more harm than good to General Electric. His expertise in financial engineering was the main tool in his major adjustments and changes in the company. As much as his intentions were in the interest of the prosperity of the company, they were at the expense of the staff; the goals were only beneficial to the already successful section and entities of the company (Wozny, & Bartlett, 2005). This eventually undermined the core values of the organization and the overall benefit of the staff, management, and the whole organization.

SECONDARY PROBLEM

Teacher comment you are off to a solid start on this section! I recommend stating the secondary problem you are addressing in the beginning of the first paragraph. For example, “The secondary problem of the case study is replacing Welch.” This will help direct your paper and prepare you for the future sections that depend on this submission. Additionally, I recommend focusing on one main secondary issue such as the poor economic conditions, being late to e-commerce, replacement of Welch, or the ‘software’ (aka repair of culture) issue written about in the case study for secondary problem

Secondary Problem in classical TRIZ, little consideration is given to the secondary problems rampant in all corners of the world. Several issues arise while finding solving solutions to the extent that sub problems appear(Maymon, 2018). These sub problems arise during further development and the implementation of the obtained solutions. Unfortunately, comprehensive TRIZ courses are not enough to offer proper attention to the last parts of ARIZ. Besides, typical training case studies lacked details about the whole system. At the same time, other students had to work with problems out of the professional areas, leading to secondary issues. Addressing secondary matters is of importance. This importance has made it essential for it to be discussed in all most all corners of the professional areas.

No matter its importance in finding solutions, this secondary is faced by severity that runs from addressing the second problem to arising of sub secondary problems. Several criteria are available for determining the severity of the secondary issues, which must be at the person’s mind addressing the issue. Some of these criteria run from obtaining scores of the situation in the form of data. Then a test score is done on the data until the root cause of the severity is found. These test scores have the advantage of reliability,making it easier to find solutions to the secondary problem. However, the validity issue makes it challenging to find the root cause of the severity of secondary concern.

The occurrence of secondary issues always accompanies any change in any system. This occurrence results from the trial of solving the initial problem, which is also known as the primary problem. In many cases, these issues represent conventional engineering tasks and are addressed accordingly (Wozny, & Bartlett, 2005).

In many instances, these issues become problems due to the lack of a conventional way of handling them, which triggers novel approaches to manage them. In general, secondary problems reflect that any improvement in one system results in the rise of side effects seen in other characteristics. These effects might be undesired or harmful, or they may either be obvious or hidden. The analysis of several diagrams reveals that there are two types of secondary issues. One is undesired effects, and the second is a means to provide the required results. In both cases, secondary issues practically create chains. In the case of undesired outcomes, finding a solution to one problem results in many more drawbacks resulting in time-consuming and cumbersomeness to the parties/stakeholders involved in this case.

Solutions

Teacher comment you are headed in the right direction. I recommend separating and labeling each solution as a way to alert the reader. For example, “The first solution to the core problem of restructuring GE is…”. Next paragraph, ” “The second solution to the core problem of…is…”. This adds clarity to the paper and delineates solutions. Please be sure to explain how each proposed solution would solve the core or secondary problem for solutions

The Solution to the core problem facing General Electric is lack of organizational stability. General Electric is one of the most admired companies in the United States. The company was founded in 1878 by Thomas Edison. The company has been undergoing changes from time to time, leading to confusion. When Reg Jones assumed leadership in 1973, the company had just completed a major reorganization. Upon becoming the CEO, Jones launched sophisticated planning processes. The 43 strategic plans and the many layers, made the company complicated. Similarly, when Jack Welch became the CEO in 1981, he assumed a different strategic approach. He started reorganizing the company afresh, by divesting and acquiring new companies. Welch’s goal was to ensure GE had a simple organizational structure and less bureaucracy. In essence, there have been leadership disruptions at GE leading to organizational instability.

Solutions to core problem

The solution to leadership disruption and organizational instability at GE is succession planning (Santora & Bozer, 2015). From the excerpt, it is clear that Jack Welch took the right step by decentralizing General Electric. He also reduced the hierarchical levels from nine to four. According to Griffin, Phillips, and Gully (2017), Welch replaced the rigid, mechanistic, and traditional structures with an organic, flexible, and agile system. The adoption of a simpler structure was preferred as it is less expensive and more efficient. The delayering and divesting reduced the operating costs as thousands of employees were laid off. However, before Welch exited the company the shareholders were worried about succession. They were worried if successor would deliver the 23% per annum shareholder return (Bartlett & Wozny, 2005). This incident underlines the importance of succession management to attain a pool of future leaders. The company needs to develop talent internally, so that they can have steady pipeline of successors.

The second solution to organizational instability is establishing a strong culture. After becoming the CEO, Welch replaced the bureaucratic culture with a more open one. Some of the initiatives that were used to entrench the new culture are Work Out and Best Practices. These initiatives also improved the relationship between employees and leaders. The last solution to achieving organizational stability is by ensuring all employees are treated the same. Procedural, distributive, and interactional justice impacts positively on employee commitment and positive behavior (Zaman, Ali, & Ali, 2010). Stability was also further achieving by involving employees in decision-making and through training.

Constraints and limiting factors

Teacher comment Solid effort, However, per the grading rubric, this section should contain the constraint/limitation of each proposed solution to the core and secondary problems (I pasted the grading rubric below). In doing so, you should address the possible negative outcomes of each solution to the core and secondary problems (i.e. play devil’s advocate). I recommend separating each solution’s constraints into a new paragraph, and using sentences such as, “The constraints to the first solution to the core problem are…” as a way to alert the reader to topics and changes. Too often managers implement a solution without considering the full costs, trade-offs, or other negative aspects associated with implementing the solutions. Of course, this lack of preparation causes additional problems.

Thoroughly discusses constraints and limiting factors that would impede upon the ability to successfully implement each proposed solution. Provides supporting rationale for each constraint and limiting factor on constraints and limits factors

Core Problem in General Electric has had many reorganizations leading to instability and confusion (Strohmeier, 1999). Also, the company has bureaucratic and rigid structure making it less responsive to the market and employee needs (Abetti, 2006). Also, as indicated by Griffin, Phillips, and Gully (2017), General Electric focuses more on task-oriented instead of relationship-oriented leadership behavior. The employees are treated as a mere means to complete production. One of the solutions to instability and rigid structure is changing the structure and the organizational culture. The employees are used to working in a mechanistic way; hence, hampering innovation. To implement change, there is a need to change the way the firm operates by making it lean. However, there are constraints and limiting factors that could affect change implementation. One of these factors is lack of adequate financial resources. For the last one decade, GE has underperformed due to adverse business climate and stiff competition. As a result, it might not have enough cash reserves to finance organizational change and the restructuring process.

The other likely constraint is employee resistance, due to the fear of unknown and over-determination. As indicated by Griffin, Phillips, and Gully (2017), employees are likely to resist change if their job positions are threatened or due to group inertia. Before Jack Welch assumed leadership; GE had largely been a bureaucratic organization (Bartlett & Wozny, 2017). Consequently, forcing employees to embrace new values and shared beliefs is likely to be an uphill task. Finally, adopting a new organizational culture at General Electric may be limited by external forces. Due to the ongoing coronavirus epidemic, most companies are focusing on survival and not initiating new projects. Although GE should transform from being inefficient, and bureaucratic to an efficient, technology-based and lean organization, the timing is wrong. The priority of the GE is to adapt to the new realities of a pandemic economy by reducing operating costs.

Second problem: constraints and limiting factors

The main second problem that was identified is lack of motivation. According to a study conducted Langer, Feeney, and Lee (2017) the work environment has an impact on employee motivation and job satisfaction. This is why employees in public sector organizations are less satisfied because of the unfulfilling work environment. They are used to performing monotonous, duplicative, and unnecessary tasks. GE needs to suppress these bureaucratic pathologies by motivating the workers. This can be done by increasing compensation and adopting a performance-based package. To further motivate the workers, the management should establish employee assistance programs (Hodgkin, Merrick, Hiatt, Horgan, & McGuire, 2010). Unfortunately, it is not possible to implement this solution as the GE does not have adequate financial resources.

Implementation of Best Solution

Teacher comment you’re off to a solid start! However, it seems your solution for the core problem best aligns with what is considered to be a viable secondary problem (i.e. replacement of Welch). Additionally, your secondary problem best aligns with the core problem of restructuring the entire GE taken on by Welch. I recommend re-formatting your text to align with the solution that best fits the core and secondary problem for implementation of best solution

The core problem that was identified is lack of organizational instability due to leadership disruptions. Successive leaders have had different and conflicting goals resulting in organizational ineffectiveness. Just to illustrate further, when Reg Jones became the CEO, General Electric had just undergone a major reorganization. Instead of continuing with this approach, Jones unveiled 43 strategic plans making the organization hard to manage. Finally, when Jack Welch assumed leadership, he restructured the company and made it leaner. He also scrapped the laborious strategic planning system that Jones had initiated and reduced hierarchical levels from nine to four.

The solution to organizational instability is having an effective succession plan. Talent should be developed internally to ensure GE has enough pool of future leaders. This will ensure successive CEOs will be recruited internally as they have the required insider knowledge. General Electric should only hire externally when there is need for sudden shift in the company’s strategy. Also, to reduce the CEO succession risk, there should be aa strong relationship between the high-potential candidates and corporate directors. Having a mentorship program will prepare the rising stars for future leadership roles in the company.

The secondary problem

The major problem that was identified in this case study is lack of employee motivation. According to Griffin, Phillips, and Gully (2017), motivation is desirable because it makes employees to work at high levels. To perform their roles effectively, employees ought to be provided with materials, resources, equipment, and information. In the case of General Electric, the employees are demotivated by the sudden changes that took place. The downsizing that occurred between 1981 and 1988 eliminated 59,290 and 64,160 hourly positions (Bartlett & Wozny, 2005). The drastic restructuring definitely affected the remaining employees due to job insecurity.

The solution to lack of employee motivation is to invest in programs that target their welfare. For instance, the company should increase compensation to avoid attrition. Failure to do so, the remaining employees may start looking for an alternative employer. Also, the company should put in place employee assistance programs (EAPs). EAPS will help the remaining employees to deal with job-related stress. EAPs will also create a positive working environment and increase productivity. The importance of having EAPs at GE is supported by a study that was conducted by Richmond, Pampel, Wood, and Nunes (2017). According to this study, EAPs have a positive impact on employees’ quality of work life. In this case, EAPS will assist the remaining with counseling services to deal with mental issues and downsizing-related anxiety.

Evaluating Leadership Decisions

Since it was founded in 1878 by Thomas Edison, GE has grown and expanded over the years. Today, it is recognized as a leading and diversified electric industry across the world. There have been changes in leadership and managerial styles at GE to make the company better than it was founded. One of the most recognized leaders at GE was John Welch, who became the CEO of GE in 1981. During this time, the American economy was facing a recession and hence, faced a difficult time leading a big company like GE. Following Jones’ footsteps, John Welch faced various challenges in making GE a better company than how he found it. The major leadership concepts exercised by John Welch were BE, KNOW and DO. This paper evaluates some of the leadership concepts used by John Welch and the expected outcomes.

The first leadership concept used by Jon Welch at GE was BE a professional by exercising the principle of leading and not managing. According to this concept, leaders are expected to be straightforward, imaginative, and competent in making earlier changes in organizations if there is a need instead of waiting to change later when there is stiff competition (Wessh, 2019). The change should be immediate and not wait because many companies lose market shares, sell outdated products, and face the risk of economic and political effects later. Therefore, leaders understand such risks communicate the need for change early enough and ensure that those he or she leads are working towards the change. Welch worked less with managers who were attached to GE’s old ways and resisted the need for change. According to Welch, these people carried the past’s anchor and hence, got into trouble in the company. Therefore, through leading, he propelled GE to high heights and competitive for two decades.

Another leadership concept is the KNOW concept which focuses on the four elements of leadership. Leaders should know the follower, the leader, communication, and the situation. In this case, Welch knew himself, knew about human nature, the organization, and his job. When he took over GE, it was a rough time because of the recession. However, through the KNOW leadership concept (Northouse, 2019), Welch knew what he was supposed to do. Therefore, to stay competitive during this time, he proposed a #1 and #2 competition stand recession and the global competition against them. That is when he made decisions on selling more than 200 businesses which had previously collected hefty revenues. However, this was the best move because, at this time, the company made over 370 acquisitions and invested more than $21 billion to purchase the lighting house at Westinghouse.

The last concept is the Do concept of leadership. DO require leaders to direct, implement, and motivate others towards a common goal. Welch directed GE towards going global to sustain the goal of staying competitive in the global environment. He also went on to develop strategic leadership recruitment, whereby a new generation of leaders was selected (Wessh, 2019). Such leaders were flexible and aligned with GE’s new vision and reinforced professionalism at GE.

The biblical concept that Welch would have used proverbs 11:14. The scripture emphasizes the importance of having a great leader to oversee and counsel people. Just like Jesus was a leader who worked closely with people towards salvation and counselled them as well, Welch exercised this during his leadership at GE.

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