GE's Two-Decade Transformation: Jack Welch's Leadership
Jack Welch received his Master of Science and Ph.D. degree from the University of Illinois in 1960. After completing his years of education, Welch was hired by General Electric Corporation (GE) as a chemical engineer for the Plastics department. Promotions followed rapidly and at the age of 45, in April 1981, he became CEO of GE, one of the world’s leading diversified industrial companies. Even though, the U.S. economy was in a recession during that time and unemployment rates were very high, Welch found the way to challenge everyone around him and to made changes that helped him create one of the ”Most Admired Companies in the United States”
1. How would you describe Jack Welch’s leadership style? Was his effect on organizational culture positive or negative? Defend your argument.
When Jack Welch became CEO of GE, he made a decision to radically restructure the company, realign goals and motivations, and push managers and employees to “stretch” to new previously unknown limits. He set high standards for each of the business units to become number 1 or 2 in the industry, and if the results weren’t satisfying, he disengaged from that sector or sold it completely. Between 1981 and 1990, GE sold more than 200 businesses that freed up over $11 billion of capacity.
Jack believed in complete dedication and always putting 110% into everything he was doing. His management style and motivation included three main areas: empowering/motivation, goal setting and clear communication. Welch was very motivated and full of internal driving passion that made him work for reasons that went beyond money or status. He was always “thirsty” for better results and continuously raised performance bar for GE. He was a strong believer in incentives and rewards, in addition he also implemented a model where stock options became the primary component of management compensation. Employees who were scored highly on their performance reviews received large bonuses, what further motivated
1. How would you describe Jack Welch’s leadership style? Was his effect on organizational culture positive or negative? Defend your argument.
When Jack Welch became CEO of GE, he made a decision to radically restructure the company, realign goals and motivations, and push managers and employees to “stretch” to new previously unknown limits. He set high standards for each of the business units to become number 1 or 2 in the industry, and if the results weren’t satisfying, he disengaged from that sector or sold it completely. Between 1981 and 1990, GE sold more than 200 businesses that freed up over $11 billion of capacity.
Jack believed in complete dedication and always putting 110% into everything he was doing. His management style and motivation included three main areas: empowering/motivation, goal setting and clear communication. Welch was very motivated and full of internal driving passion that made him work for reasons that went beyond money or status. He was always “thirsty” for better results and continuously raised performance bar for GE. He was a strong believer in incentives and rewards, in addition he also implemented a model where stock options became the primary component of management compensation. Employees who were scored highly on their performance reviews received large bonuses, what further motivated