The Problems in the Macro-Environment of General Electric - Case Study Example

General Electric’s Case Study Case Study Analysis By _________________________ 1. The situation when Welch took the responsibility and became CEO of GE, the competition was taking place at an upward slope as many of the Japanese firms were entering into the market. At this point of time, Welch was not left with many choices, to keep the business consistency, Welch provided few concepts that were either to be number one or number two in the business as a pioneer company or a toughest competitor, the purpose behind stating any such thing was to make the employees think that they all have to work as a team in making the organization adjust at only mentioned top two positions, also he asked the members of the company to believe that it is possible to achieve the target by moving the company and meeting three important phases that are to be core provider (basic product facilities with quality), high technology (searching for latest technology and implementing it in the products) and services or augmented product (something that is extra and customer would be delighted from). Moving further, a major initiative that Welch took was to downsize the organization, the reason according to Welch was that this way the employees would have greater concentration on work and also the company would now be in direct contact with the goal as he mentioned that they would be in direct contact with business. These initiatives were certainly the most effective for the organization keeping its position, which was under great threat, it was certainly a good strategy to reduce the number of employees as the company was in no good position to retain the employees whose work was even possible with few committed people, so the company made a lot of profitability by eliminating numbers of people and focusing on the core goal of profitability with consistency in the market share through their position. 2. The time when Welch took the seat of CEO, the entire company was facing the problems in the macro environment as the interest rates were high, the currency was devaluating and many other related issues, if under such circumstances a person takes the seat of CEO then naturally the time is required to get settled and yet if a person like Welch sooner recovers and starts seeing things positively, creating ideas in the favor of companies and employees, simultaneously and starts implementing those plans for the benefit of the company then that person is liable to be known as a good leader. Jack Welch’s leadership has got nothing to prove but his leadership could be identified with few vital actions he took like his team work approach, he tried to convince other fellow members on what should be done, and we all know that convincing the members within the same organization is a work of a genius as many of the fellow members do not allow the intelligent ones to show what they got, nevertheless Welch’s approach was “we…not me”. Also a good leader is visionary as it was Welch who first stated many statements that were about the company’s position in the next few years, it was his dream which he followed, a leader is also a communicator as Welch analyzed the company scenario and immediately informed the other members on what was happening and what was suppose to happen and finally a leader has to be a taskmaster as what ever was planned by Welch was implemented pragmatically to get the desired outcome, all these aspects fit into the profile of Welsh as he not only just saw the vision but also implemented actions for achieving that. 3. By the late 1980s, Welch had settled himself completely into the organization, he had got a thorough knowledge about every one related to the organization, it was because of this fact that he felt that he should now bring employees together, he took an initiative of removing the left over bureaucracy and should bring in employees to share their views so that more ideas can be generated for the betterment of the company, this was a step which gave birth to brainstorming with in the GE, it had changed the relationships between the employees and the bosses, further more it gave birth to the “open door policy” with in an organization, it was a very positive step not only for the company itself but also for the employees as now they were more motivated to work as their ideas were being shared now. Another strategy that Welch applied was that he focused on target performance approach according to which an employee had to bring best with in him/her and had to perform the level best he/she can, also he provided them with numerous benefits and he also had good plans for them in future as he believed that the only way an organization can reach its goal is through its human resources. Certainly these initiatives were very effective for the company, as Welch believed that changing organization culture always brings a positive feedback with it, he firmly believed that every one needs a change and a change in the favor of employees can increase the profitability, which exactly happened. 4. As discussed earlier, Welch had settled himself completely in the company by late 1980s, he had realized the company’s potential, the position of competitors, the customer needs, ways he could bring people closer and work together and the ways through which he can bring out the best from an employee, if we keep all these points and then the outcome of his leadership in mind, we would be obliged to say that he did an excellent job, he had realized that the company requires a change and he has to provide them with a positive one as no old organization can sustain without the change which is according to the cultural change, also he asked the other fellow members to learn from the other organizations, of course he must have tried to tell them about their current position and he would have wanted to keep his staff aware of the mistakes these companies made in the past after which they had to suffer and then again work hard to get back to the top. He implemented few things that were never possible and achievable for a common employee, it has to be the work of a leader, which he showed. “Brainstorming” concept was brought by Welch with in the GE, which also gave a chance to many of the employees to prove their brilliance and also it not only meant employees but also innovation or a change which the company was in bad need of, all this qualifies him to be a good leader. 5. The best part of Welch’s leadership from the employee point of view was that he had given them so much of importance that he even gave them the stock option, according to which the company rather than benefiting many other people gave so many benefits to their own employees, it not only benefited the employees but also the organization it self as now they were holding the major part of the cycling money. Further more, Welch had a thinking that the company firstly should satisfy its internal customers who are the employees and then should move on to increase the value. Welch believed that it would be much better if all the operations would be combined and rather than just working at own as he realized that merely 60% of the profits were being generated from services, it means that breaking them all would break the profits and perhaps it could lead to more competition which would then result in unbalanced customer list, that is also something he would have convinced shareholders on. 6. I think the case study has taught me about the leadership style which was common a decade ago as it was not an era of information technology with its full flow, from the study I have learnt that a leader makes policies but while making them he keeps in view the ones for whom the policies are being made, it is a rare quality. I have also learnt that a leader needs to understand the people working under him at the best and also he needs to bring out the best within them, also a good leader does not believe in nonconformance and seeks zero defect in the products that are being manufactured under his name, further more a leader is a visionary as it is the first step of reality. Today the business world is relatively different than 80s and 90s, the world has even become more globalize and competition is at its peaks, you cannot enter into it until and unless you come up with an extraordinary idea. If today I get hold of any such organization, which is not performing well then I would: analyze the factors which are proving to be the facts of failure, keeping them in mind, I would have a meeting with the staff, I would ask them to suggest their ideas and views, another thing I would do is that I would then match who is who in the organization, I would do delegation (empowerment), I would select the best alternatives, I would analyze their outcomes, I would implement them on a short scale for analyzing the consequences one by one, and finally I would implement the best alternative that could prove to be the most appropriate. 7. Every company has a base, which if settled and strengthened then the company has rare chances of getting a failure, that backbone is provided to GE by Welch, so the chances of it to get failed or less successful are very rare, and therefore in my view the prediction did not come true. At the time of retirement, Welch was taking interest in the e-commerce and thus his next strategy was to make GE familiar to users all around the world through it, which GE has taken advantage of. Welch had implemented those strategies that were good according to his mind and situation back then, but his successor Jeff is left with more than many alternatives to keep the organization alive and healthy, it is good to have new blood in old organization. He should now have focus on filling the prevailing gaps in the society rather than following Welch, there are numerous gaps present in the society that are not helping the organization in improving its market share, so Jeff has to look for them keeping the barriers in the mind. Also Jeff needs to use the IT as it is a major need of any company these days, IT can help save them much of time and then they can utilize that important time in increasing productivity and making efforts to sell that. Read More