Case Study Worksheet GE Essay
CASE STUDY WORKSHEET
This form can be used to organize your thoughts about a case. As you perform your analysis remain open to the fact that your interpretation of the facts may change and therefore you should constantly revisit your answers. Define the Problem: Describe the type of case and what problem(s) or issue(s) should be the focus for your analysis. Cases tend to fall into one of three categories that sometimes overlap: Ø Decision Cases describe a decision faced by the case protagonist (character). The student ultimately must choose among a finite set of distinct decision alternatives. Ø Problem Cases require a student to diagnose a problem in a business case and to formulate possible solutions.
Ø Evaluation Cases illustrate a business success or failure. The student analyzes the underlying reasons for that success or failure to arrive at management lessons. Evaluation Case
An analysis of GE s revitalization efforts during the tenure of their infamous CEO Jack Welch. This detailed examination of the impact of Mr. Welch s leadership style and the changes he implemented . The learning objective is to understand the evaluation of Welch s strategy and how it impacted the company. There is no question that Welch had a positive and important effect on GE s long-term success. It is, however, important to note that this did not come without controversies. Though Welch did make appropriate changes which allowed for GE s success, the question remains; how does GE ensure that the post-welch era will continue to flourish without his guidance
GE is a successful firm because they have the right resources aligned with the right attributes and characteristics. Welch strengthened their valuable resources which improved effectiveness and efficiency. This helped address opportunity and minimized threat. By understanding Welch s strategic management style and applying modern day strategic analysis, we will conclude that GE will require someone who values the changes that Welch created for the company to succeed him.
List any concepts that can be applied in the case: Write down any principles, frameworks or theories that can be applied to this case. (Relate to the chapter understudy)
He further emphasized this by creating things such as :
1) Large meetings without bosses present,
2) Opening the line of communication to where businesses reported to Welch directly, and 3) Doing studies of other companies in order to extract what made them profitable and utilize it for the improvement of GE.
4) Employee were given the opportunity to purchase company stocks/options, 5) Each individual employee was given a performance and feedback report by the company be able to be run as effectively and profitably as a smaller company.
List relevant qualitative data: evidence related to or based on the quality or character of something.(eg. Customer complains on the service)
Challenges faced by the Welch when he took over the position of CEO: 1) SBU-based structure of the organization under the leadership of Reg jones 2) Multilayer structure of the organization with departments, divisions, groups and SBUs topped with organizational layer of sectors
3) U.S Economy in recession- High Interest Rates, highest unemployment rate since the depression 4) Global competition faced by the company- more often in the form of Japanese. GE at present was unable to face it to their full potential
5) Bureaucracy structure of the organization leading to inefficiency and often delay, costing the company its edge
List relevant quantitative data: evidence related to or based on the amount or number of something.(eg turnover rate is 10%)
The Changes made under Welch s leadership:
GE s sales got dramatically increased, more than double, from $10 billion to $22 billion. Earnings grew even faster, from $572 million to $1.4 billion). Internally, he built a constructive business-government dialogue, which contributed the company achieving the expansion of world trade and restoration of U.S. competitiveness.April 1st 1979, Jack Welch became the 8th Chairman and CEO of GE. He had to take the responsibility of taking over GE. At that moment, he faced the challenges from both outside and inside of GE. The U.S economy was in a recession. High interest rates and a strong dollar exacerbated the problem, resulting in the country s highest unemployment rate since the Depression. And also, the massive information and inefficient macro-business, which was due to the complex business structure, were making the business difficult to grow fast.
1) CEO challenged each to be better than the best
2) Two tier approach of fixing- the hardware company s processes and structure and the software management style, culture and structure
3) Risk taking behaviour expected out of business heads and let go of the old GE culture
Describe the results of your analysis: What evidence have you accumulated that supports one interpretation over another. (Keep in mind the theories, principles, framework) Welch Early Priorities : GE s Restructuring
To leverage performance in GE diverse portfolio of business, Welch challenged each to be better than the best and set in motion a series of changes tha were radically restructure the company. #1 or #2: Fix, Sell or Close
He believe in 3 important elements as such :
1) Business were categorized as core (with the priority of reinvesting in productivity and quality) 2) High technology (challenge to stay on the leading edge by investing in R&D) 3) Services (required to add outstanding people and make contigous acquisitions) The software Initiatives : Work out and Best Practices
Jack believe workout process is designed to get unnecessary bureaucratic work out of the system while providing a forum which employees and their osses could work out new ways of dealing with each other. He also inroduced employees to come out with proposal. The RULES boss had to decide whether the proposal is workable or not in front of others.
Meanwhile the Best Practices is to focus how things done in other
organization and implemented in GE s
especially in increase the productivity of the employees.
Economic crisis in other regions had open the opportunity to GE s for expanding. Ge buy over the organization by acquisition and mergers. This can be considered as one of the strategic initiatives taht have took place in GE s. Globalization is not one time effort, but an ongoing theme. It has proven in Japan, the company had spent $15 billion on acquisitions in 6 months. By 1998, international revenues were $42.8 billion, almost double the level just 5 years earlier. Gloal revenues were growing at almost 3 times the rate of domestic sales. Developing Leader
Welch focusing on the task of realligning the skill sets and the mind sets for 290,00 employees. Welch have to encourage his employee to be more participative (candor behaviour) don t be afraid of speak up, friendliness, offer attractive compensation plan. Jack introduce stock options and equity, by doing that the staff is also feel the sense of belongings.
Create a based of leaders identified 4 types of leaders .
TYPE 1 Deliver commitment and share GE values
TYPE 2 Leaders don t meet commitment don t share GE values
TYPE 3 Leaders who do not committed and not achieved targets but share the values in GE s people can turn around
TYPE 4 They deliver on commitment and do not share values.
Welch is not happy with the type 4 leaders, thinking off to get rid of this type. He believes in people values. Boundaryless Behavior
All department and sector should work together. A boundaryless organization will ignore or erase group labels such as management, salaried or hourly which get in the way of people working together. Stretch: Achieveing Impossible
Not only workers but dreamers should cum high to achieve. Put themselves above and beyond. Think big. Moving from local to globalisation is a proof. Will drive the organization become number 1, No punitive or penalty given if
the Stretch is not made. Welch wanted the managers to work harder is not only target if achieveable but looking for sustainable.
Earlier focusing on products only. He instructed to look back all GE s business and explore the new service based for growth opportunities.
Raising the Bar / Increased quality
Six Sigma Qualty Initiative
Six sigma quality was more than slogan, it was well develop programme with a detailed plan for its implementation. GE s had invested $500 mill to train the entire professional workforce of 85000. In addition 5,000 managers had been appointed to work on the programme full time as Black Belts and Master Black Belts. A Players with 4E s
Create the A Players Energy (excited by ideas and attracted to turbulence because of the opportunity it brings), ability to energize others (infecting people with their enthusiasm for an idea and having everyone to dream the same big dreams), edge (ability to make tough calls), execution (the consistent ability to run vision into results) One more Initiative
E business focused on the challenges of redefining its business model before some one else did. Change is opportunity, this is our greatest opportunity. GE had done the really hardwork of building the assets needed to support e business. Like strong brands, top ranked product reliability, great fulfillment capability and excellence service quality.
Describe alternative actions: List and prioritize possible recommendations or actions that come out of your analysis. (Maximum of three (3) alternatives)
1. The Lay off , downsizing, restructuring is the challenging decision to be made. It should be done globalize. Not focus in the New York only
2. Decision on the acquisition is the strategic plan. It should be continously done. It will brings more profitable to the organizations.
3. Make a frequent involvement to the staff for decision making process Describe your preferred action plan: Write a clear statement of what you
would recommend including short, medium and long-term steps to be carried out.
1) Adapted HR system to his goals, and began keeping tabs on upper management. GE management expected feedback, which they used as the basis for coaching and developing their staff. 2) Increased communication between CEO, and top managers, increased communication between top managers and lower employees, became means for training of new employees 3) Managers
Used as a hub for communications
4) 360° Feedback process
5) Became means for training needs, coaching opportunities, and career planning. A Players 6) Managers with vision, leadership, energy, and courage
7) Performance Appraisal System: Managers rated employees on a scale of 1-5, 5 being the lowest on effectiveness
8) All 5 s were to be let go, and all 1 s were to be rewarded with stock options, and higher promotional probability
9) In the new culture, role of the leader is to express a vision, get a buy-in and implement it. Increased feedback communication and expectations in the organization In summary Jack Welch attributed towards managements can be summarized in some simple ideas: eliminate vertical barriers like hierarchies, eliminate horizontal barriers by promoting programs like Work Out, globalization, encouraging people to talk, listen and be open to new ideas.
Welch succeeded his GE transformation by creating and opening communication channels, empowering employees at all levels of the organization and allowing a new kind of teamwork that was unknown until them. All this factors combined motivated all employees to generate two decades of outstanding performance leaded by a great leader like Jack Welch.
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