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GE's Two Decade Transformation - Case Study Example

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It was during this time that US was going through the recession and therefore, the economic environment was not conducive for business. This period experienced high interest rates, in addition to the…
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GEs Two Decade Transformation
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GEs Two-Decade Transformation How difficult a challenge did Welch face in 1981? How effectively did he take charge?
In 1981 when Welch took over the leadership of GE, he faced numerous problems. It was during this time that US was going through the recession and therefore, the economic environment was not conducive for business. This period experienced high interest rates, in addition to the high unemployment rates. Such occurrence were obstacles to GE’s success and had to be dealt with. In tackling these difficulties, Welch made a reinvestment in enhanced productivity and improved quality his priorities (Bartlett 2). He also brought in new individuals into the business, who substantively enhanced service delivery through the introduction of high technology based on the initiative of fix, sell, or close.
2. What is Welch’s purpose in the series of initiatives he launched in the late 1980s and early 1990s? What is he trying to achieve in the round of changes he put in motion in that period? Is there a logic or rationale supporting the change process?
Welch’s main purpose in the series of initiatives he launched was to ensure that in the next decade, GE would be a number one or number two competitor in the industry (Bartlett 1). This would make GE a unique, highly spirited, and an entrepreneurial enterprise in addition to being profitable, diverse, and with quality leadership and products of their own kind in the world. In the round of changes he puts in motion in that period, he wanted to achieve a productive business with individuals who were focused in implementing change for the success in the business. Ideally, making such a change is logical considering the situation in which the business environment was in. Welch realized that the business had so many who never added value to the business and therefore, went for the restructuring process have a lean and efficient workforce.
3. How does such a large, complex diversified conglomerate defy the critics and continue to grow so profitably? Have Welch’s various initiatives added value? If so, how?
In order to grow profitably, it is essential that one reduce the expenses or production costs. It is by the same perspective that Welch uses to grow GE profitably despite the critics. He did this through downsizing, destaffing, and delayering to have a lean and effective employee base (Bartlett 3). Indeed the initiatives employed by Welch added substantive value to the business as the business was able to grow its operation profits from $1.6 billion to $2.4 billion and revenues from $27.1 billion to $29.2 billion within four years (1981-1985) (Bartlett 3).
4. What is your evaluation of Welch’s approach to leading change? How important is he to GE’s success? What implications for his replacement?
Considering Welch’s approach to leading change, I believe it is one of the most efficient approaches as he is able to reduce costs of production and increasing the revenue and profit margins. This is the purpose of every business and therefore, fully in support of Welch’s approach. This was an important approach as it contributed significantly towards the success of GE. It is indeed evident that Welch’s replacement would have various implications, as the person replacing him should be able to facilitate the change he had started to ensure that GE remains the best business as Welch had intended it to be.
Works Cited
Bartlett Christopher. GE’s Two-Decade Transformation: Jack Welch’s Leadership, Harvard Business School, Revised May 3, 2005. Read More
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