Six Sigma of Leadership and Motivation - Essay Example

Six Sigma of Leadership and Motivation Problem Statement This research will attempt to examine the leadership strategies employed by the legendary Jack Welch to the management of one of the most successful corporations nowadays, General Electric. In the analysis, four organisational theories will be used, namely, scientific management, human relations, systems and contingency theories. Moreover, involved in this study is the accompanying motivation of employees which Jack Welch unusually taken advantage of for the growth and progress of both the people behind the success and the corporation itself. And, in order to ascertain the extent of the effectiveness of Welch’s leadership, qualitative as well as quantitative approaches will be used. Executive Summary Jack Welch had contempt for the conventional function of management, which historically was seen as an organizational arrangement founded on dictatorship or control. Welch, on the contrary strongly believed that mangers should be leaders. Rather than micro managing workers, leaders should motivate and liberate them. Jack Welch employed communal values and employee motivation as the guiding premises for the General Electric organisation. This research and analysis paper, will attempt to examine the leadership strategies employed by the Jack Welch in the management of one of the most successful corporations, General Electric through conducting interviews and surveys with the top management and the employees alike as well as reviewing secondary data from available literatures on the subject matter being studied, which is leadership strategies. In this paper, four organisational theories will be used in the analysis of secondary data, namely, scientific management, human relations, systems and contingency theories. Moreover, the researcher will explore the motivation of employees which Jack Welch had unusually taken advantage of for the growth and progress of both the people behind the success and the corporation itself. In order to ascertain the extent of the effectiveness of Welch’s leadership, qualitative as well as quantitative approaches will be used. Moreover, the findings of this research will be consolidated to form a cohesive section for the recommendations to management in relation to contemporary leadership strategies as popularised by General Electric’s CEO Jack Welch. The recommendations to management will focus upon leadership strategies in relation to improvement in strategic human resource and job design. The three Welch’s popular business strategies, namely, employee downsizing, process streamlining and restructuring, are recommended to management but with some modifications. II. Company Background Edison General Electric Company and the Thomson-Houston Company merged in 1892 to form General Electric, but the company dates its founding much earlier, to 1876 when founder Thomas Edison opened his Menlo Park, New Jersey laboratory (Our History). Today, technology has changed but the primary attitude has not: "At GE we ask, 'why predict the future when you can create it?' From our earliest days, our company has used the tools of research, combined with a little inspiration, to create the world of tomorrow" (Our History). The company held a "blue ocean" (Chan and Mauborgne 2005) view a century before the concept was developed. Kumar and Ricker (2004) observe, "The General Electric Company has spawned from the creativity and genius of Thomas Edison, the entrepreneurial spirit and business savvy of Charles Coffin, and the capital support of J.P. Morgan" (p. 354). Kumar and Ricker (2004) credit the company's success to its "culture of continual improvement and industrial research" (p. 354). "The only company remaining from the Dow Jones index of 1896, GE has had fewer leaders since then – eight - than the Vatican has had Popes" (Useem 2004, p. 112). The same author muses, "What GE seems to have a genius for … is picking the right person for the right time for more than 100 years" (Useem 2004, p. 112). When Jack Welch orchestrated direction-changing reorganization nearly 20 years ago, one goal was to retain only those businesses in which the company believed it could maintain first or second place in their respective industries. That overriding goal is still operational at GE, and Immelt's directives are not intended to undermine that philosophy. Rather, GE now seeks to enhance its business position by being more active in social matters. Bob Corcoran, GE's first vice president for corporate citizenship, provides a "good neighbor" analogy. Neighbors on the block who keep their property well, pay their taxes and obey the law are decent neighbors, but they are only compliant (Gunther 2004). With its new focus, GE seeks to be the neighbor who does all of the things on that level, but who also "organizes the block party" and "picks the kids up after school" (Gunther 2004, p. 176) – if doing so is good for business. In spite of its record and its entrenchment in the industrial history of the American nation, a character for bland and uninspiring quality, particularly in its small and most important appliances, burdened General Electric. However, when Jack Welch tossed his contagious interest in the underlying Six Sigma quality regulation process, it was not situated in the sake of quality. That was certainly an advantage at General Electric, yet he was inspired by efficiency and the prospect of significant expenditure savings (Lowe 2001). In the middle of the 1990s, Jack Welch gained knowledge from his friend Larry Bossidy, who was at the time at the controls of Allied Signal Corp, regarding Six Sigma. When he analyzed it, Welch identified an idea that moved the engineer in him. Six Sigma is a statistical concept and nowadays a slogan for products that possess a near perfection rate (ibid). When Jack Welch became General Electric’s CEO he hurriedly initiated the now-widespread practiced business techniques of consistent restructuring, process streamlining and employee downsizing, establishing him as one of the most respected and feared business leaders in the world. Immediately after his transformation of General Electric, he became labelled in the media and by the personnel of General Electric as ‘Neutron Jack’ because when he is over and done with streamlining a business, the establishment remains, but the employees and staff were all banished (Strohmeier, 1998, 16). Resolute to strengthen the collective power of people at General Electric, open up a liberal flow of knowledge and ideas, and restructure relationships among superiors and subordinates, Welch designed a work-out, which was a chain of meetings at town hall carried out by General Electric management and developed to motivate responses from employees, brainstorming of ideas and empowerment of employees. In the corporate culture of General Electric established by Welch, conventional hierarchies dividing employees, staff and top management provide strength to ties of cooperation based on interdepartmental approach (ibid). One of Jack Welch’s leadership principles is to be truthful to everyone. Welch persevered to generate an environment at General Electric where people could articulate themselves to somebody in authority who might contribute something about their dilemmas. He consistently discussed issues with leading employees on the plant floor. He was enthusiastic to hear and be aware of both the good and bad things regarding General Electric’s performance and fix the defects immediately. Welch strived to create a type of philosophy among the managers and employees at General Electric which articulates both the good and bad news (Eckes, 2001). Jack Welch did an excellent job of demonstrating the requirements for effective and proactive management and continuous benchmarking. Through the leadership of Welch, the social and political environments at General Electric were modified remarkably through removing numerous layers of management and motivating employees through involving them in the decision-making process. General Electric values are so significant to the company, which Welch had employees internalised and handed out to all the people at General Electric, at all levels of the company. However, before the principles were delivered to the personnel, General Electric had arrived at an agreement on which centre values it sought to encourage in its employees. III. Analysis of Primary Research A goal and point of focus originated by Jack Welch that has become a part of the facts of life at General Electric is that the lumbering behemoth that GE had become by the time Welch became CEO cannot be allowed to return to life. GE is a huge company by any standard, yet it still manages to be highly responsive to changing customer needs and market conditions. Kevin Sharer, CEO of Amgen, worked for Jack Welch at GE from 1984 to 1989. He says that reality constitutes a large portion of the "GE mystique:" Everybody has a real chance to know exactly where they are. There is no puffery. That is buttressed by rigorous, fact-based, honest assessment of the business situation. There isn't an ounce of denial in the place (Morris and Colvin 2006, p. 98). Harvard's Clayton Christensen is less charitable toward GE. Though "GE is the best school of management in the world bar none" (Morris and Colvin 2006, p. 98), its business units may have become too large again. Christensen notes that the problem with such large size is that bigger business units typically have little or no interest in small business opportunities. The problem with that is that "all the big growth markets of tomorrow are small today" (Morris and Colvin 2006, p. 98). Christensen sees another dismantling event in GE's future; what worries him is that he has not seen any indication that GE believes it is becoming necessary. A. Method Jack Welch remains an encouraging role model in the business world due to his unparalleled success in establishing G.E. as the most effective and profitable company in the United States. In a matter of years since his takeover of corporate leadership, the company and its subsidiaries were the top performers worldwide, in all fields. Welch’s ultimate success in driving profitability and market share was achieved by increasing output and reducing costs by the firing of employees in less profitable and poorly performing departments in the company, the elimination of stratums of bureaucracy, the upgrading of communication between divisions of the company, and the rewarding of those who perked up the bottom line. Jack Welch apparently attracted both sides of the camp, the positive and negative, due to his extraordinary approach towards corporate leadership. However, these allegations of both the advocates and critiques of Welch will carry significant grounds if these are backed up with quantitative substantiation. Therefore, this research will attempt to gather primary data/information from two business organizations and one electronic company in London through face-to-face interview with managers and organizers and through surveys, which will be conducted with the employees. The objective of this endeavor as aforementioned will be to identify the magnitude of the influence of Jack Welch’s leadership strategies through concrete evidence from real people and real organizations. Apart from this goal, this research will attempt to obtain opinions from the respondents whether they think Welch’s leadership techniques are purely inhumane as the Catholic Church accuse of him or appropriate corporate mechanisms to keep business organizations profitable and employees motivated. The two business organizations selected for this study are infotech research group and techalliance. These organizations conduct seminars and lectures for both small and large electronic business entrepreneurs in London, and one of their main focuses in their discussions is leadership strategies and motivation. For the interview, two organizers for each of the organizations will be selected whereas for the survey ten employees for each organization will be randomly selected. 1. The Interview The interview with the managers and organizers of chosen business organizations will be unstructured in form. Hence, the nature of the interviews will be more of probing and interacting rather than limiting the interviews into a programmed set of questions. This form of interview is opted for since the subject matter that will be studied, which is leadership, is qualitative and nature. Primarily, the first part of the interview will attempt to gain some information about the managers and organizers’ knowledge about Jack Welch so as to determine the extent of his popularity to the top management. Afterwards, the reasons for their familiarity or unfamiliarity with the corporate icon will be explored so as to determine the nature of the reputation of Welch’s leadership strategies to the top management. For those who will say that they know Jack Welch, will be asked what particular leadership technique of Welch does they favor and on the contrary, the leadership strategy that they detest. On the other hand, for those who will answer that they are unfamiliar with Jack Welch, which is quite unlikely, will be asked the next question for the second part of the interview. For the second part of the interview, the managers and organizers’ opinions will be asked regarding the particular leadership strategies that made Welch famous, namely, restructuring, process streamlining and employee downsizing. After obtaining their opinions, they will then be asked if these strategies are purely inhumane or just practical and necessary and of course, as for the other questions, they will be requested to justify their assertions. Lastly, a question regarding their perception of Welch’s leadership strategies will be asked. 2. The Survey The survey that will be conducted with twenty employees, ten employees for each organization, will consist of a close-ended questionnaire. This survey is intended to obtain statistics and opinions of employees regarding particular values that Jack Welch upholds in business leadership specifically for employee improvement and motivation. The employees will be asked if they think these values are really valuable to their self-growth and professional development. These values are (Strohmeier 1998, 16): 1. Determine your own destiny, or someone else will. Welch’s believed that the paramount means to realize a remarkable transformation at GE was to entrust authority to the employees and to allow them control their own destiny. 2. Be candid with everyone. Welch strived to create an atmosphere at GE where people could speak up to somebody “in authority” who would do something about their problems. He wanted to hear both the good and bad things about GE and correct the bad. 3. Don’t manage, lead. Welch despised the traditional role of management, which is an organizational structure built on “control”. Rather, Welch believes that managers should be leaders. Instead of controlling workers, leaders should liberate and empower them. 4. Change before you have to. In other words, it is far better to change early those things in a company that need to be changed to stay competitive, rather than change them later because you are falling behind your competitors. 5. Remove the weakest link. Poorly performing departments should be removed immediately as possible because it will affect the performance of the entire company. B. Data Analysis and Interpretation 1. The Interviews a. Infotech Research Group The two selected organizers of these organizations positively replied that they are familiar with Jack Welch and his leadership techniques. The two of them even admitted that they are regularly mentioning Jack Welch’s leadership legacy in their talks with business entrepreneurs. However, they declared that participants in their seminars and lectures are divided in their opinion about Jack Welch. When asked to mention a particular leadership strategy of Jack Welch that they admire or favor, organizer A said that he likes Welch’s frankness or his outspoken character. He said that Welch is a good leader since he is being true to himself and the people around him. He also added that Welch doesn’t contort his image to the likings of the people around him. On the other hand, organizer B said that he admires Welch’s courage to callously remove low-performing departments and personnel in the company; according to organizer B, it takes a lot of guts to fire employees harshly. On the other hand, both of these organizers admitted that they find Welch’s strategy of employee downsizing as conceited and inconsiderate. They both agreed that this move is inhumane since the matter is dealing with individuals, with people, and not with an inanimate object that can be discarded anytime the user wants. As for process streamlining, both organizers said that it is a necessary to the corporate world nowadays because of emerging various competitor markets, such as just-in-time or lean production, total quality management and others. And for restructuring, again both organizers agreed that this move is essential to any company because of the ever-changing marketplace. They said that those who lose are those who fail to adapt. On the issue of the nature of Welch’s leadership strategies being inhumane or practical, the two organizers said that there are leadership strategies that are inhumane such as dismissing an employee without consideration and practical such as restructuring or changing the traditional systems that have been the comfort zone of the people in the company because no business, whether small or large, survives without having to match the direction of the economy or the marketplace. For the top management of infotech group, Jack Welch is a good starting point in their discourses during seminars on leadership. However, they have displayed some precautions on espousing the leadership insights of Welch which is duly manifested in their divided opinion on the nature and effectiveness of Welch’s leadership strategies. Moreover, these organizers are more concerned on human relations than the company itself. Also, the dominant concern of these organizers is the capability to adapt or to adjust to the constantly changing marketplace. b. TechAlliance TechAlliance, just like Infotech Research Group, conduct regular seminars and lectures for entrepreneurs pursuing the electronic industry. The two organizers that were selected for the interview admitted that they know Jack Welch very well because of his status as an American corporate icon and his leadership strategies that prove to be valuable in the contemporary corporate world. They have added that they personally choose figures such as Welch to be the model of their talks on effective leadership. Organizer A basically favors Welch approach regarding the boosting of value added chains through removal of inefficient components working within a company. On the other hand, he sees Welch’s leadership strategies as not ruthless or inhumane, but practical. For him, the measure of Welch’s success lies on the steady good performance of GE; it is just a matter of strategy, he says. Meanwhile, Organizer B prefers Welch’s inclination towards activity-based costing rather than the traditional product costing design. He said that Welch as a leader is really involved in all the activities and processes within the company, which for him is one of the best assets of a leader. However, unlike Organizer A, Organizer B quite sympathizes on the complaints of disgruntled employees of GE because of Welch’s somehow callous treatment of the personnel. He said that it is all right for a leader to impose what he thinks is right and beneficial for the company, but it should be done in a manner that the welfare of the people within the organization remains the top priority. Hence, he concluded that to a certain extent some of Welch’s leadership strategies are inhumane and should not be emulated. Concerning the three most well known techniques of Welch, the two organizers differ considerably in their opinion. In terms of employee downsizing, Organizer A said that it is just natural for a company to gather-and-select employees that are appropriate and right for the job whereas Organizer B maintained that there are other more subtle options for a company to improve rather than laying off employees for any reason. With regard to process streamlining, both organizers agreed that Welch’s strategy in improving customer satisfaction and adding value to the company is precise and clear-cut in its objectives. While in terms of restructuring, Organizer A said that corporate culture just like any other object is subject to incessant changes, hence the need for continuous restructuring whilst Organizer B admitted that he perceives restructuring as a drastic move, particularly on the manner Welch carried it out, because culture cannot be changed that radically; he argued that only the components of corporate culture can be restructured but not the culture per se. Apparently, the organizers’ responses to the questions represent a variation in perception of leadership strategies within an organization. Organizer A is almost perfectly aligned with Welch’s leadership strategies and goals whereas Organizer B tends to be more particular about the specific Welch’s leadership technique that is being asked. Moreover, practicality matters for Organizer A while human relations weighs more for Organizer B. The results of the interviews with the organizers of Infotech and Techalliance prove that Jack Welch is still a hot rod when it comes to leadership techniques. Even though there are disagreements and oppositions to some of Welch’s strategies, it cannot be denied that Welch’s leadership techniques are insignificant or outdated. The mere fact that these organizers are well acquainted with the goals and leadership strategies of Welch verifies the still alleged substantial magnitude of Welch’s influence to business organizations. Moreover, these organizers use Welch’s ideas regarding leadership in their discussions with small and large electronic businesses, which implies that Welch’s legacy is still proliferating within the circles of business entrepreneurs, as these two business organizations are concerned. 2. The Survey The close-ended questionnaires were distributed to twenty of the selected employees from the two business organizations and they were asked to indicate if the five employee empowerment strategies of Jack Welch, given a description for each strategy, are positive for them or not. The objective of this survey is to obtain some statistics on the employees’ perception of Welch’s leadership tactics for employee motivation through merely answering simple positive-or-negative questions. According to the gathered responses from the employees, this information came out, Employee Empowerment Strategies Number of Positive Response Ranking Determine your own destiny 15 3 Be candid with everyone 20 1 Don’t manage, lead 17 2 Change before you have to 13 4 Remove the weakest link 10 5 As the figures indicate, all the randomly selected employees favor the idea of having an authority figure around the company whom they can relate their professional or occupational difficulties in order that further problems will be resolved immediately. Moreover, they value that the leader will be willing to hear both the good and the bad news with regard to the company performance. Aside from ‘being candid with everyone’ strategy, a large number of employees believe that it is important to lead rather than manage because the former provides empowerment and liberation to employees. Likewise, somehow similarly important for these employees is their right to determine their own destiny or their right to exercise their willpower inside the organization. On the other hand, the two most unpopular employee motivation strategies for the employees are changing the company ‘prematurely’, as some of the employees remarked, and removing the weakest link in the organization. Employees who responded negative to the former mentioned that sometimes it is not helpful to restructure organizational components because of forecasted problems or loss because the employees will definitely endure the process and the consequences. For those who answered positive, they viewed changes in the company before the actual problem materializes as strategic and practical. Meanwhile, with regard to removing the low performing departments or employees in an organization, employees who responded negative said that it is not the best way to improve company performance; sometimes it is just a matter of open communication and brainstorming. On the other hand, for those who responded positive argued that an organization should regularly evaluate the performance of every department and employee in order to avoid future problems. Dismissal some mediocre employees or removal of low performing employees is an inherent process in any organization. C. Secondary Data Analysis Using the four organizational theories, namely, scientific management, human relations, systems theory and contingency theory, and available information from relevant literatures, the structure and system of GE will be analyzed. 1. Scientific Management The time Jack Welch took over the CEO position at GE, he immediately instigated the now well-known business strategies of regular restructuring, process streamlining and employee downsizing. Immediately after his revolutionary leadership at GE, he became known in the media and by the employees of GE as Neutron Jack because when he is over and done with streamlining a business, the building remains, but the personnel were considerable reduced in number (Strohmeier 1998, 16). Determined to strengthen the collective capacity of people at GE, open up an open transmission of knowledge and ideas, and restructure rapports among superiors and subordinates, Welch designed a work-out, which is a series of meetings at town halls performed by GE’s top management and developed to encourage feedbacks from employees, sharing of ideas and motivation of employees. With regard to the corporate culture established by Welch, traditional hierarchies separating employees, staff and management provide reinforcement to ties to cooperation founded on interdepartmental approach (ibid, 16). 2. Human Relations One of Jack Welch’s leadership principles is to be truthful to everyone. Welch persevered to generate an environment at GE where people could articulate themselves to somebody in authority who might contribute something about their dilemmas. He consistently discuss with leading employees on the plant floor. He was enthusiastic to hear and be aware of both the good and bad things regarding GE’s performance and fix the defects immediately. Welch strived to create a type of philosophy among the managers and employees at GE that articulates both the good and bad news (Eckes, 2001). Jack Welch does an excellent job of demonstrating the requirement for effective and proactive management and continuous benchmarking. Through the leadership of Welch, the social and political environments at GE were modified remarkably through removing numerous layers of management and motivating employees through involving them in the decision-making process. GE values are so significant to the company, which Welch had employees internalized and handed out to all the people at GE, at all levels of the company. However, before the principles were delivered to the personnel, GE had arrived at an agreement on which centre values it sought to encourage in its employees (ibid, 107). 3. Systems Theory The step-by-step mechanism GE and other organizations employed to enhance processes is summed up by the acronym DMAIC which means (Eckes 2001, 10): “Define. Defining the team to work on improvement, defining the customers of the process, their needs and requirements, and creating a map of the process to be improved. Measure. Identifying key measures of effectiveness and efficiency and translating them into the concept of Sigma. Analyze. Through analysis, the team can determine the causes of the problem that needs improvement. Improve. The sum of activities that relate to generating, selecting and implementing solutions. Control. Ensuring that improvement sustains over time” (Eckes 2001, 10). These processes or systems has been flourishing at GE since it has flat-out, unrepressed maintenance from the top level of management, and the strategies were analyzed across the organization. Definitely a small number of people debated the idea that going for perfection in the novel generation of a product makes brilliant logic; doing it appropriately at first significantly reduce costs than repairing it eventually and paying for the damage and other incurred costs of defects (Eckes 2001). 4. Contingency Theory For Jack Welch, leading is more important than managing. Welch ridiculed the traditional role of management, which is an organizational arrangement based on dictatorship or control. Welch, on the contrary firmly believes that managers should be leaders. Rather than bossing around workers, leaders should motivate and liberate them. Jack Welch employed communal values and employee motivation as the guiding premises of the GE organization. The soon as Welch became CEO, every GE business possess nine to eleven layers of organization; after a decade was reduced to four then to six (Strohmeier, 1998). Welch has stated that GE is performing excellently and is positioned to perform better in the coming years not for the reason that they “are managing better because we are managing less- and that is better” (ibid, 17). IV. Recommendations to Management Business organisations are leaping great strides in their attempts to develop leadership aptitude and skills in their organisations; however, as the results of the interviews and surveys indicate, forecasting and continuously building leadership in the top management of a business organisation remains an extremely difficult mission. Therefore, these recommendations to management stems from the researcher’s recent review of available literatures on the subject matter and from the primary data gathered from the interviews and surveys to document the frameworks of leadership development as espoused by Jack Welch. Nevertheless, the question here is what precisely should the management be training and developing? In lieu to the findings of this study, leadership strategies implemented within a business organisation should focus more on the people, or the personnel and staff, rather than the tangible or physical realities of a company. The management could adopt human resource policies that are more focused on employee efficiency and professional growth. Instead of doing what Jack Welch had done, specifically the drastic employee downsizing, the management can resort to other alternatives such as improving the workforce early on through perhaps providing more flexible work schedules, enhancing job identity and job significance, and enriching job designs so as to guarantee the flow of competitive knowledge within the organisation continuous and uninterrupted. In relation to the strategy of process streamlining, instead of removing low performing departments in a business organisation, the management could use methods analysis in evaluating performance of every department. Methods analysis uses three tools, namely, flow diagrams, process charts, and operations chart, which identify wasted motion and idle time. Instead of laying-off some employees because of unsatisfactory business performance, the management could first try to employ these techniques which could enhance employee efficiency and productivity through maximizing on unused and idle time. On the other hand, in restructuring or modifying corporate culture in an organisation should be firmly grounded on the objectives of strategic human resource and job design. New mechanisms should take into account constraints within the organization and be able to transform these constraints into something which employees can gain benefit from. The management should consider trade-offs whenever deciding on the future of their employees; in improving human resource policies it is inevitable that other strategic decisions will be affected hence the challenge to the management is to align all these strategic decisions into one goal, the improvement of the workforce. The underlying premise, then, seems to be development of an essential component to sustaining strategic feasibility, knowledge and restoration for a business organisation. As one analyses the experiences and endeavours of well-known executive leadership and development attempts, such as that of Jack Welch, a number of essential objectives and cautions appear to surface. It is obvious that the ‘entire individual’ development scheme supported and implemented by several organisations involve development of complex knowledge, of the organisation, the social capitals and obligations, and the highly special concepts of ethics and behavioural modes. It is also apparent that from a strategic, unique know-how perspective; such schemes should be carried out and regulated internally. Obviously, most business organisations cannot afford full staffing, internal leadership specialists, but can be capable to establish a firm rapport with outside specialists who can cooperate and work with the organisation over a specified period of time. Educational institutions and local consulting companies may be good starting places. In the final recommendation, leadership can be all about creating appropriate decisions, setting fitting priorities, and being capable to concentrate the effort of a committed and motivated workforce. Jack Welch’s leadership legacy is not at all in line with all the components of a business organisation hence it is essential for the management to be cautious of strategies that they will be adopting. Table of Contents I. Executive Summary..............................................................................................3 II. General Electric Before and Now: Company Background.................................4 III. Analysis of Primary Research.............................................................................6 A. Method.....................................................................................................6 1. The Interview.................................................................................7 2. The Survey......................................................................................8 B. Data Analysis and Interpretation................................................................9 1. The Interviews.................................................................................9 a. InfoTech Research Group....................................................9 b. Techalliance..........................................................................10 2. The Surveys......................................................................................12 C. Secondary Data Analysis.............................................................................13 1. Scientific Management.....................................................................13 2. Human Relations.............................................................................14 3. Systems Theory.................................................................................14 4. Contingency Theory..........................................................................15 IV. Recommendations to Management..........................................................................15 V. References..................................................................................................................18 VI. Appendices............................................................................................................... References Eckes, General ElectricorGeneral Electric. The Six Sigma Revolution: How General Electric and Others Turned Process into Profits. New York: Wiley, 2001. Lowe, Janet. Welch: An American Icon. New York: Wiley, 2001. Strohmeier, Brian. "The Leadership Principles Used by Jack Welch as He Re-energized, Revolutionized and Reshaped General Electricneral Electric." Journal of Leadership Studies (1998): 16. 'GE's Mission Statement', Man on a Mission, 25 February 2005 viewed 15 January 2009 . Gunther, Marc 'Money and Morals at GE', Fortune, vol. 150 no. 10, 15 November 2004, p. 176. Kim, W. Chan and Renée Mauborgne 'Blue Ocean Strategy: From Theory to Practice', California Management Review, vol. 47 no. 3, Spring 2005, p. 105. Kumar, Sameer and Jeffrey L. Ricker 'General Electric, a model of corporate citizenship and business evolution', International Journal of Energy Technology and Policy, vol. 2 no. 4, 29 November 2004, p. 354. 'Our History,’ General Electric, viewed 15 January 2009 . Useem, Jerry 'Another Boss Another Revolution: Jeff Immelt is following a time-honored GE tradition: abandoning the most treasured ideas of his predecessor,' Fortune, 5 April 2004, p. 112. Appendices Appendix A Unstructured Questionnaire Interview Good day. I am (your name) and I am here to conduct an interview regarding leadership strategies. I just want to ask you a couple of questions about your opinion of Jack Welch and his leadership strategies. I hope you will give me just a little portion of your time for this interview. Thank you! 1. First of all, I would like to ask you if you are familiar with Jack Welch? If yes, what particularly do you know about Jack Welch? 2. Are you familiar with his leadership strategies? If yes, could you please specify one of his leadership strategies that you personally favor? Please kindly justify why you prefer this particular leadership strategy? How about his particular leadership strategy that you detest? Why is this so? 3. Jack Welch has been generally well-known because of his three business strategies that are now commonly used in the corporate world. Please kindly give your opinion regarding each of these strategies: Employee Downsizing? Process Streamlining? Restructuring? 4. Do you think Jack Welch’s leadership strategies are inhumane, as the Catholic Church says it is, or are they appropriate and practical to the modern corporate world? Please justify. 5. Lastly, what can you personally say, generally, about Jack Welch’s leadership strategies? Thank you for your time! Appendix B Close-Ended Questionnaire Survey The following items are employee motivation strategies. Please kindly check the “positive box” if you personally favor the particular leadership strategy and if otherwise please checks the “negative box”. On the box provided for each item, please kindly write down a brief reason why you have favored or not a particular leadership strategy. Employee Motivation Strategy Positive Negative Reason for your choice Determine your own destiny, or someone else will. Welch’s believed that the paramount means to realize a remarkable transformation at GE was to entrust authority to the employees and to allow them control their own destiny. Be candid with everyone. Welch strived to create an atmosphere at GE where people could speak up to somebody “in authority” who would do something about their problems. He wanted to hear both the good and bad things about GE and correct the bad. Don’t manage, lead. Welch despised the traditional role of management, which is an organizational structure built on “control”. Rather, Welch believes that managers should be leaders. Instead of controlling workers, leaders should liberate and empower them. Change before you have to. In other words, it is far better to change early those things in a company that need to be changed to stay competitive, rather than change them later because you are falling behind your competitors. Remove the weakest link. Poorly performing departments should be removed immediately as possible because it will affect the performance of the entire company. Thank you for your time! Appendix C Transcript of the Interviews Infotech Research Group Organiser A 1. Yes, I know very well Mr. Jack Welch of General Electric’s. Well Jack Welch is quite popular because of his outspoken character when it comes to leadership. 2. Yes, I am familiar with his strict yet practical leadership strategies. I think he is a good leader because of his leadership strategy that particularly addresses true self-character. He encouraged his personnel to be just like him, unyielding to the bad influences and discouraging forces around him. On the other hand, I don’t like the way he drastically and inconsiderately terminates employees; when dealing with people all strict rules of the business should be dropped momentarily. 3. Employee downsizing: As I have said, I don’t like it at all. It is utterly inconsiderate and inhumane. Process Streamlining: I think this strategy is quite up-to-date since competition in the corporate world is now fierce, given with the new strategies such as JIT and TQM. Restructuring: Just like process streamlining, this strategy is practical and workable. 4. Yes, for some strategies. As I have mentioned a while ago, I think drastic employee downsizing is inhumane. I have to agree with the Church in that case. 5. Jack Welch is truly a legendary icon in leadership strategies, there is no doubt about that. Organiser B 1. Yes, I am familiar with Jack Welch. We actually include his leadership strategies in our seminars and lectures. However, participants are quite divided in their opinion about him. Some like him, others don’t. I am well acquainted with his leadership strategies because I am required to include him in all my business talks. 2. I personally find it favourable in his leadership strategies the manner he terminates mediocre employees and removes low performing departments. Actually, you know, it takes a lot of guts to do that. However, I also find this excessive employee downsizing as inconsiderate, if the employees are considered; really inconsiderate. 3. Employee Downsizing: His strength of character in terminating mediocre personnel and departments is really impressive. However, on the part or for the sake of the employees I think it is uncalled for. Process Streamlining: This is done by majority of business organisations around the world because it has proven to be effective. Restructuring: This is virtually useful because of increasing globalisation of the marketplace. 4. Yes, I agree with the Catholic Church at some points. Human relations approach of Jack Welch does not conform to traditional rules of human interaction and relationship. 5. Jack Welch will be immortalised for his leadership strategies and entrepreneurs are here to live up with the legacy. Appendix D Transcript of the Interviews Techalliance Organiser A 1. Ah yes, of course, Jack Welch. If you want me to talk about his leadership strategies, I can definitely do it for you for straight two hours (laughs). 2. I am very, very familiar with his leadership strategies. Hey, it does pay sometimes to be an American icon, right? The modern corporate world will never be the same without Welch’s legacy. His decision of removing unhelpful components in the value chain seems a very effective strategy for me. I believe Welch’s leadership strategies are practical and not inhumane at all. The current standing of GE will testify to the fact that everything is practical; it’s just a matter of strategy. 3. Employee Downsizing: It’s just a matter of gather-and-select employees’ method. I don’t see anything wrong about it, honestly. Process Streamlining: It is done to improve customer satisfaction and add value to the company so it’s perfectly fine. Restructuring: Any business organisation needs to adjust to incessant changes in the economy or in the marketplace. 4. I don’t think there is something inhumane about Welch’s strategies. In the modern business world, the concept of ‘consideration’ or ‘sympathy’ only applies to the personal dimension of life. 5. Jack Welch is the best! He is my personal favourite, actually. Organiser B 1. Yeah, the CEO of General Electric, right? 2. I am quite familiar with his activity based costing method and his opposition to traditional product costing design. He is involved in all the activities of GE which is one of the best assets a leader can have. Yeah, but there are so many controversies about his strategies particularly the manner he kicks out employees not performing well. Yes, it is the job of the leader to do what h/she thinks is right but everything should still be done within moral parameters. Welch’s in this aspect is I think, yes, inhumane. These are people we are talking about; they should be the top priority, right? 3. Employee downsizing: There are other ways apart from laying off employees for any reason. Process streamlining: This is definite in objective which is to increase customer satisfaction and improved firm performance. Restructuring: The way Welch does this, I think it’s drastic. You cannot change corporate culture that easily, only components of it can be changed. 4. Yes, as I have said, there are strategies of Welch that are obviously inhumane. 5. Jack Welch’s example should be applied with caution because not everything he did, even though GE is successful, is utterly right. Appendix E Result of the Survey Employee Motivation Strategy Positive Negative Determine your own destiny, or someone else will. Welch’s believed that the paramount means to realize a remarkable transformation at GE was to entrust authority to the employees and to allow them control their own destiny. 15 5 Be candid with everyone. Welch strived to create an atmosphere at GE where people could speak up to somebody “in authority” who would do something about their problems. He wanted to hear both the good and bad things about GE and correct the bad. 20 0 Don’t manage, lead. Welch despised the traditional role of management, which is an organizational structure built on “control”. Rather, Welch believes that managers should be leaders. Instead of controlling workers, leaders should liberate and empower them. 17 3 Change before you have to. In other words, it is far better to change early those things in a company that need to be changed to stay competitive, rather than change them later because you are falling behind your competitors. 13 7 Remove the weakest link. Poorly performing departments should be removed immediately as possible because it will affect the performance of the entire company. 10 10 Read More