Corporate Responsibility Is Defined In Chapter 5 As The Corporate Duty To Create Wealth By Using Means That Avoid Harm
Corporate Social Responsibility: The Welch Era
1. Corporate responsibility is defined in chapter 5 as the corporate duty to create wealth by using means that avoid harm, to protect, or enhance societal assets.
The question whether GE fulfilled this duty during the reigning period of CEO ,Jack Welch is a topic of much debate. Personally, I have thought long and hard about which side of the argument to be on with this conversation. Having looked at GE during the Welch years from many angles and perspectives, as well as analyzing this specific definition of Social Responsibility, I believe that, while no corporation is ever going to be ‘perfect’, GE did an excellent job of fulfilling this duty.
The reason many critics argue against this is because so many jobs were cut during this period. However, the bottomline goal of a company is to increase profits, and as Jack Welch was known to argue, a profitable firm is going to be in the best place to benefit and give back to society.
GE may have cut jobs, but he cut them based on performance and cultivated efficiency. Jack Welch was known as the manger of the century and turned GE into the most admired company (as descried by the Financial Times’). Jobs may have been lost in the U.S. but encouraged globalization of production and jobs transferred to lower wage countries, thus creating growth in places that need it.
With Jack’s 3 tier evaluation system (top 20%, middle 70% and bottom 10%), employees were constantly driven to evolve, motivated to perform better, and refrain from getting ‘too comfortable’. The employees that fall in the bottom 10% of performance standards they were let go. I love this, it’s no different than a sport, or best analogy is a race- as a coach you are not going to keep the bottom 10% on a paid scholarship. The more you eliminate the bottom later, the better the entire overall team gets. The bottom 10%, are the weakest links, and either need the ‘kick in the rear end’ to take their performance
1. Corporate responsibility is defined in chapter 5 as the corporate duty to create wealth by using means that avoid harm, to protect, or enhance societal assets.
The question whether GE fulfilled this duty during the reigning period of CEO ,Jack Welch is a topic of much debate. Personally, I have thought long and hard about which side of the argument to be on with this conversation. Having looked at GE during the Welch years from many angles and perspectives, as well as analyzing this specific definition of Social Responsibility, I believe that, while no corporation is ever going to be ‘perfect’, GE did an excellent job of fulfilling this duty.
The reason many critics argue against this is because so many jobs were cut during this period. However, the bottomline goal of a company is to increase profits, and as Jack Welch was known to argue, a profitable firm is going to be in the best place to benefit and give back to society.
GE may have cut jobs, but he cut them based on performance and cultivated efficiency. Jack Welch was known as the manger of the century and turned GE into the most admired company (as descried by the Financial Times’). Jobs may have been lost in the U.S. but encouraged globalization of production and jobs transferred to lower wage countries, thus creating growth in places that need it.
With Jack’s 3 tier evaluation system (top 20%, middle 70% and bottom 10%), employees were constantly driven to evolve, motivated to perform better, and refrain from getting ‘too comfortable’. The employees that fall in the bottom 10% of performance standards they were let go. I love this, it’s no different than a sport, or best analogy is a race- as a coach you are not going to keep the bottom 10% on a paid scholarship. The more you eliminate the bottom later, the better the entire overall team gets. The bottom 10%, are the weakest links, and either need the ‘kick in the rear end’ to take their performance