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Case Study: Jack Welch and his major strategic actions

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1. How successful has Jack Welch been in running GE from 1980 to 2000?

2. Comment on the major strategic actions that Jack Welch took during his twenty year tenure, and their impact on GE's performance.

3. What is your evaluation of Welch's approach to dealing with people and leading change? How important is he to GE's success?

Bartlett, Christopher A., and Meg Wozny. "GE's Two-Decade Transformation: Jack Welch's Leadership." Harvard Business School Case 399-150, April 1999. (Revised May 2005.)

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1. How successful has Jack Welch been in running GE from 1980 to 2000?

Jack Welch, the Chairman and CEO of General Electric between the year 1981 and 2001, built GE in to the most successful American corporation of the late twentieth century by applying his unique management skills and unbeatable strategies. Jack Welch revised and redefined the GE's mission and values to make GE ready for the global competition and future challenges. He grew GE from a $24+ billion company to into a $74+ billion company. Jack Welch realigned the goals and restructured GE into one of the world's most admired companies in the world, with market value of about $500 billion, when he stepped down as CEO, 20 years later in 2000.

To evaluate how successful jack welch was in running GE from 1980 to 2000 year is not simple. His performance was beyond the expectations and imaginations. He transformed General Electric completely and gave a rebirth to GE. His motivational and transformational strategies were mainly focused on the following three areas:

1. Prepare GE on a corporate level for its global competitive challenges;
2. Empowering employees; power, freedom, creative work environment etc.
3. Smooth change implementation: he used various tools as extensive training programs, newly formed teams etc. for the smooth implementation of change.

Jack Welch's major strategies; de-staffing, downsizing and delayering played a major role in GE's transformations and its global success. Reports clearly show that between 1981 and 1985, revenues increased modestly from $27.2 billion to $29.2 billion, whereas operating profit rose dramatically from $1.6 billion to $ 2.4 billion.

Welch's newly defined strategy 'stretch goals' helped organization improving employees' performance and productivity, which finally contributed in organizational success. His 'boundary less company' and 'integrated model' concepts became part of the GE culture and helped company to improve its business processes by integrating all the business units together.

Jack Welch's motivational approach, empowerment and workout strategies increased the productivity of employees in multiple folds; productivity was growing at an annual rate of 2% which got doubled to a 4% annual rate between 1988 and 1992. Jack Welch's strategic initiatives helped GE to attain a global position. GE acquired around 16 companies in the 6 months as a growth strategy, which helped GE to increase its geographical presence worldwide. Jack Welch also ...

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The expert examines Jack Welch and his major strategic actions.

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3. What are the consequences and risks of using the PES just as they are presented in the case?

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Gujarathi, M. R., & Govindarajan, V. (2007). Falcon, Inc.: Performance evaluation of foreign subsidiaries. Issues in Accounting Education, 22(2), 233-245.

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