1. Running head: GE Review
GE’s Case Review Exposed
Joshua R. Norris
BUS-463
California Baptist University

2. GE Review
GE’s Case Review Exposed
Executive Summary- In the case GE’s Two-Decade Transformation: Jack Welch’s
Leadership by Christopher A. Bartlett and Meg Wozny, the story begins with Jack Welch’s
retirement in September of 2001, and how the shareholders were concerned as to whether or not
they would be seeing their 23% returns that they had become accustomed to under Welch. How
did the company get there? In this class, we learned about business organization from all aspects:
people, processes, structure and design, forms of leadership and management, and much more.
When Jack Welch took his last role at General Electric (GE) as their Chief Executive Officer
(CEO), he began to plan and strategize a long term goal for the company, which he implemented
in phases over the course of the two decades that he was with GE. In essence, Welch tore down
the walls of the existing organizational structure at GE, and completely redesigned it from the
ground, all the way up to his 14 “varsity players” (Bartlett & Wozny, 2000). After the structure
was in place to support his vision, Welch launched his second phase, which was to focus on the
organizational culture of GE, or its values by which employees would come to understand what
actions would and would not be in line with GE acceptance during operations. It also changed
how people should communicate with one another from one chain of command to another. Welch
wanted a cultural climate which encouraged lower level employees to give their input and ideas,
without feeling as though they would not be heard.
After the two key phases of Welch’s strategy were in effect, he began to encourage
growth and acquisitions of new markets and pushed GE into the arena of global ventures. One of
the major qualities of a great leader, as discussed in class, is the ability to constantly listen, learn,
and grow. Jack Welch was relentless when it came to open-mindedly pursuing new concepts and
trying new things. This, in culmination of great support from subordinates, contributed to the
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effective growth and constant process adjustments within GE that made them such a dynamic, yet
agile company, with its diversity and precision.
Author experience and education pertaining to this article
According to the Harvard Business School website on Faculty & Research, Christopher
A. Bartlett is an alumni of Harvard, where he completed his masters and doctorate degrees in
business administration after transferring from University of Queensland, Australia in 1964, where
he received an economics degree. After graduating from Harvard, Bartlett joined the ranks of the
professors at Harvard, and went on to publish a number of works over his career. “Since joining
the faculty of Harvard Business School in 1979, his interests have focused on the strategic and
organizational challenges confronting managers in multinational corporations and on the
organizational and managerial impact of transformational change. He served as faculty chair of the
International Senior Management Program from 1990 through 1993, and as area head of the
School's General Management Unit from 1995 to 1997.” (Christopher A. Bartlett - Faculty -
Harvard Business School). Together, Bartlett and research assistant Meg Wozny created a perfect
duo. Bartlett had the expertise and Wozny assisted him by meeting with sources, and compiling
data for the books that they co-authored.
Statement of Core Problems
When Jack Welch took control over GE in 1981, he saw a different path for GE then he
had witnessed under late Reg Jones. Though GE had stood out of the pack in previous years,
Welch was going to have to lead the company through turbulent times, as the economy at that
time was not as strong as GE experienced in the 1970’s. Welch had to come up with a plan that
would take GE into the next decade, and he did not see the current business structure of that time
as the means to get them there. Welch would first have to lock in what he saw as the
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organizational goals of GE’s future; goals which would give GE the results that he wanted. An
obvious hurtle to Welch, was the redundancies and time exhausting processes which he felt were
slowing down the efficiency and thus productivity of the company. To overcome this first
obstacle, Welch began to completely tear down the organization structure at GE, changing the
system of tasks, reporting, and authority relationships within which GE functioned. The first
major accomplishment for Welch was the elimination of the middlemen between him, the CEO,
and the individual businesses that GE owned and operated. GE’s configuration was completely
rewritten, and a lot of upper level “salaried” positions were eliminated, as well as lower level jobs
over the years of reconfiguration at GE.
Another problem that Welch would have to face, was the culture shock within the
organization at GE after losing so many positions, employees, and getting rid of the old processes
and structures. Jack Welch was aware that the new structure he had created would not work as
intended unless the individual people fulfilling the tasks at GE were dedicated to the change, and
were empowered with the methods of operation necessary in order to feel that they are working
towards the same attainable goals. Realization of this problem, again, is yet another reason why
Welch was an excellent leader; he managed people by allowing them to feel a part of the team.
The modernized culture at GE became one of openness among managers and subordinates. An
arrangement which afforded innovation to come from an unexpected shadow, or that one rising
star, who previously had no means to an audience. Though he was no pushover, Welch is
presented as an open-minded, entrepreneurial-spirited leader and saw the importance of investing
in new concepts. This was not just by accident; he seemed to see it as a necessary quality for a
multi-versital business such as he envisioned GE to be.
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Recommendations
Jack Welch’s concept had a lot of great presence in modern business, economics, and
multinational corporations across the board. There is very little, if any, that I would even consider
changing, let alone anything that I could justly “recommend”. One thing that I gathered from the
article, which may be of concern, is that the same entrepreneurial spirit that drove Welch to great
discovery could very well have drove GE to failure just as easily. All I would point out, is that
when investing in research and development, do not spread the company out too thin.
When Welch first took on the position as CEO with GE, the first thing that he did was to
tear it down to the frame; trimming GE down of the non-essentials. At the rate that Welch was
going with regards to the globalization, and branching out in terms of products and services,
Welch may have very well been creating a monster. It seems to me, that GE could only expand
itself so much until it would have begun to suffer the same inefficiencies that it first had at
Welch’s inauguration.
Analysis
From an economic stand point, GE played an interesting role during the fluctuant times of
the 1980’s and 90’s. In order to survive, the company was changed drastically, resulting in the
elimination of thousands of jobs. In the short run, this would only search as a negative proponent
to the environment in which GE was conducting business. However, in the long run, GE ended up
growing exponentially. The financial gains of the company stimulated surrounding businesses with
which GE worked with, and even created more jobs and currency flow.
An important note in reviewing this article is that Jack Welch’s strategy was to create long
term growth by slow and strategic long term transformations at GE. Welch could have easily just
fired everyone on a whim, and put things back together as he went. However, he chose to listen,
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he chose to learn, and he chose to grow. This is evident in his slow change plan, because he
adjusted it over time, as he witnessed the formation of his structure throughout the process.
Lastly, and most important of all, Jack Welch understood the importance of
communication. His plan to have the employees give their proposals to the manager, while the
manager’s boss was behind him, out of sight, was brilliant. It was obvious that Welch did not
want to throw anything to chance when it came to the next big idea. He wanted to hear them from
any and everyone, including past employees and colleagues. I am a strong believer in the fact that
interpersonal communication within the office and external communication are crucial to the flow
and growth of any successful organization.
Buttoning it up
In closing, I gathered a wealth of information covered in class throughout this article. Jack
Welch was a great example of a transformational leader and took advantage of strategic
leadership by keeping an open mind and an open eye to the opportunities in GE’s environment.
He appeared to have the charismatic ability to gain the trust of his subordinates, which may have
helped eliminate any potential leadership neutralizers. With great insight to the future of GE, and
a laid out plan, Welch was able to break GE down and build it up; bigger, better, and stronger
than ever before. After his two decades as CEO, Welch was able to leave in 2001 with the proof
of his career as a great leader looking back at him.
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References
Bartlett, Christopher A., and Meg Wozny.GE's two-decade transformation Jack Welch's
leadership. Boston: Harvard Business School Pub., 2000. Print.
Christopher A. Bartlett - Faculty - Harvard Business School. (n.d.). Harvard Business School
Faculty & Research. Retrieved August 20, 2013, from
http://www.hbs.edu/faculty/Pages/profile.aspx?facId=6419
Griffin, R. W., & Moorehead, G. (2012). Organizational behavior: managing people and
organizations (10th ed.). Mason, OH: South-Western/Cengage Learning.
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