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General Electric’s under Welch Report


Mission, Objectives, And Strategies

Identifying. The mission of General Electric’s was to manufacture goods and prosper compared to other companies that operated into the same market.

The main objectives of the company for the decades when Welch was the CEO concerned the initiatives introduced by him and the team of executives while every staff member was supposed to meet the goals and attain standards.

The well-planned strategic development and implementation of the organisation introduced and maintained by Reg Jones, who became the GE’s CEO in 1973, was redesigned and eliminated by Jack Welch and replaced with “real time planning built around a five-page strategy playbook” (Bartlett and Wozny 3).

Some strategies of the company can be seen as cutting down the number of areas in which the company specialises which now equals seven segments such as “aircraft engines, appliances, industrial products and segments, National Broadcasting Company (NBC), plastics, power systems, and technical products and services” (Pahl 11).

At the same time, the business needed profound changes to be made because progress cannot be achieved using old strategies that do not reflect the modern situation. Besides, the country was in recession in terms of economic situation and the unemployment level was high when Jack Welch obtained a position of a CEO in GE’s.

As claimed in the case by Bartlett and Wozny, “better than the best” was the major motto for Jack Welch as a new CEO of the General Electric’s and he applied this to all business units of the company (2).

This motto can also be considered the strategies that occurred at the very beginning of his activities and in the period when the company was making it way to the global market in different sectors of its specialisation. Another way/strategy to restructuring the company was an approach that gave Welch his nickname “Neutron Jack” (Bartlett and Wozny 3); this tool was aimed at eliminating ineffective branches and leaving the ones that could be fixed or improved in some way.

In this respect, Welch created the company that could be operated under his governance. Though the new “standard for each business to become the #1 or #2 competitor in its industry – or to disengage” was set by Welch, this was not the main strategy of the organisation as the company needed a more complex approach to its operations (Bartlett and Wozny 2).

Integration of staff and implementation of corporate culture was another strategy introduced by Welch that was aimed at improving the interactions between different links of the same chain. The next phase in Welch’s decisions concerned the software as one of the important building bricks in company’s restructuring and development.

The interactions between each staff member as a link in the company were significant for the CEO and he tried to introduce the same relations into organisation as those typical of small firms where every person knows each other and can interact more effectively to add value to the company.

As such, the ‘work-out’ sessions were presented and every staff member who had some suggestions concerning improvements in the company should have applied though the meetings were not documented to reduce bureaucracy.

Increasing the standards of cultural adherence and individual value-adding, Welch implied that the staff members should be talented and aware of the company’s goals using their skills and company’s resources for personal development and growth of revenue.

Welch saw the staff members self-reporting and self-assessing their personal value for the company and the ways this value-adding process can be improved (Bartlett and Wozny 3).

The changes brought into the organisation by Jack Welch at the very beginning of his career as a CEO were mostly aimed at eliminating the structure to which the company and staff got used to but which should have been changed to fit the contemporary structure of the society and market taking into account the economic situation (the economy faced recession) and the need for technological innovations.

The next innovation was the ‘best practices’ tool which was aimed at learning from the most well-performing companies of that day and adopting their methods. In this respect, the employees started realising their mistakes and reviewing their approaches to work in order to fit the bill.

The restructuring of the company at the beginning of Welch’s career at GE’s was planned to create a good ground for other changes enabling the company to go global. The globalisation of the company started rapidly and it took advantage of financial crisis in Asia to acquire many project as well as other companies and agreements all over the world.

Personal and professional growth of employees was another important component in Welch’s strategy as he believed that competition he suggested for the company to be involved in had to start with the employees.

So, the basis was created so that employees could develop their leadership and competition skills to meet the expectations of the CEO. Adapting the human resources to the objectives Welch had in mind was the starting point for implementation of competitive way of thinking and self-commitment.

The coaching and training became the main activities managers carried out to develop the staff members while the system of bonuses became more targeted at individual performance rather than on base salary and compensations.

Services became another initiative by Welch that was promising in terms of value-adding and profitability. The ‘six sigma’ and ‘A players’ were additional initiatives introduced by Welch to improve the productivity of the company and its quality on different levels.

The final initiative introduced by Jack Welch was the e-business as the step forward and a new way of making business as effectively as it used to be fifty years ago. High performance level was supported and strengthened with the help of high level of integration within the company reached through culture and values adopted and implemented from the best-performing companies.

Talented team members were ‘cultivated’ in the organization through a set of tools and methods aimed at creating highly-integrated working staff adherent to company’s values and able to act in accordance with its values and rules sharing the open vision of the world and company’s perspectives.

Evaluating effectiveness of initiatives. The effectiveness of strategies can be evaluated with the help of the revenue results after each strategy. However, it is possible to discuss the value of each strategy as they were often introduced at the same period and it would be complicated to trace their effect in revenue results.

As such, the “real time planning” appeared to be more than effective as decrease of bureaucracy was aimed at engaging more staff members in useful activities. Besides, it became easier to change the plan in accordance with the changes that took place in the market and the world.

As such, the “better that the best” strategy can also be considered effective because the staff members were motivated to outperform the goals and competitors. A part of this strategy was the “fix sell or close” (Syrett 3) approach aimed at reviewing the company’s assets and finding some projects worth being acquired.

Cultural integration was another effective strategy that can be divided into a number of smaller short- and medium-term goals such as coaching, sessions to report about possible options, and best practices adopted from other well-performing companies.

All these tools and methods were designed to make the corporate culture stronger and more directed to the goals. In this respect, the self-assessment was used by each staff member to realise his/her value for the company and possible ways for improvement; ‘A players’ was a kind of programme created to develop leadership skills and selecting the employees that met company’s standards and shared its values.

At the same time, the ‘best practices’ were adopted to make employees and managers see how things can be done instead of simply performing their professional duties.

The ‘six sigma’ was another effective strategy that can be considered a part of the ‘best practices’ methodology when the approach was adopted from AlliedSignal in order to improve the quality of work rather that productivity though the productivity increased as a result of the initiative.

The services were taken into account as one more effective strategy that brought the company into the market of services provided to customers.

Mission statement

The mission statement was not formulated for General Electric’s though the history knows a lot of mottos and initiatives as well as visions of the situation and further changes by the CEO that can be combined into one mission statement.

As such, it is possible to enumerate the basic strategies introduced by Jack Welch while obtaining a position of the CEO in General Electric’s. Acquisitions made by the GE’s enabled it to operate in the global market (Peng 228) and spread its influence on other sectors including the branches that were not involved before but were promising for the company and its profitability.

Besides, it made the company more open for other initiatives introduced as every branch located in a country different than the United States had a manger while senior executives controlled his/her activities from the headquarters though the company was not strictly centralised or decentralised. As such, the company used every opportunity to make successful acquisitions in different parts of the world.

The mission statement of the company should include the best practices and the openness of the company for talented and skilful people who can adopt the values of the company and meet its standards. In addition, it is important to mention the cultural integration and ‘real time planning’ approaches that made the company the leader and multiplied its revenue.

As such, the mission statement can look as follows: General Electric’s is a company with long history which does not bind its values because it stays open for fresh ideas that can influence the company’s standards and contribute positively to its performance leaving space for further improvements.

Formulation And Implementation Of Strategies

The strategies were aimed at leading the company to successful performance in terms of financial revenue.

Strategies. The strategies were already enumerated and assessed while their implementation took a lot of time and efforts. Jack Welch was a talented CEO full of energy to bring the changes into the company even if nobody supports his decisions.

As such, the implementation of some strategies was not as active or pleasant as others. However, it is also necessary to note that the changes in the corporate culture also influenced the way the strategies are perceived.

As such, the implementation of bets practices was active and effective as every employee tried to contribute to the overall performance and adjust the work he/she does and the way it is done to the new standards adopted from other well-performing companies.

Challenges and difficulties for the CEO. Jack Welch faced many challenges and difficulties while taking the company forward in accordance with the principles he though can be applied to this business unit.

Regardless of the economic recession in the period when Welch was starting to bring changes into practice, the initiatives were effective and created a good ground for further improvements and growth.

One of the reasons for negative acclaims of the initiatives introduced by the CEO were the cultural values of the staff members. Though the culture was later improved as well, the challenges still existed; to be more exact, the culture was adopted to Jack Welch’s vision of the company’s progress.

More attention was given to employees’ skills and environment for their development which can be considered a victory over the old standards and the way employees and the process of adding value is treated. Another challenge was the readiness of employees to follow the principles suggested and meet standards.

External Situation

The external situation concerns the issues and processes that are not related to the inner structure of the company.

Opportunities. The opportunities that the external situation suggested for Jack Welch as the CEO of the General Electric’s can be enumerated in the following way: 1) acquisitions and divestitures; 2) the situation in the market and financial crisis as a chance to acquire other projects; 3) other companies to adopt the best practices.

As such, the opportunities were numerous and the CEO only had to take advantage of them. However, as it was already mentioned, Welch had to change the employees’ perception of the company, of their job, duties, and outcomes, and other aspects that matter in maintaining the company of such a scale.

At the same time, the acquisitions and divestitures can be considered a good platform for development of global business relations if talking about acquiring foreign companies as well as partnership relations with the world leaders in different industries.

Financial crisis enables the GE’s to gain a strong position at the Japanese market while the best practices adopted from well-performing companies improved the company’s quality and increased the profit.

Threats. The treats in the market include other companies that could take advantage of the GE’s potential failures if the initiatives introduced by Welch do not have the expected effect.

Besides, some acquisitions could happen to be unprofitable and lead the company to ineffective financial performance which could also result in Welch’s resigning. Every practice adopted from other companies could occur to be inapplicable to the General Electric’s structure and operations.

One of the most serious challenges was that the company would stay a domestic firm with no perspectives for growth though it managed to become the leading one in many industries and the “#1 or #2 competitor” approach was effectively implemented in practice.

Internal Situation

The internal situation is related to the company’s structure and opportunities or conflicts that occur there becoming the platform for more or less effective changes in the company and the market.

Opportunities. The internal opportunities for the company include its talented and full of energy CEO Jack Welch, talented and open employees and managers, the values cultivated in the company, and the basis consisting of a number of diversified activities that were profitable and effective in terms of job creation and revenue growth.

In this respect, the actions by Welch provided the company with chances for success in the domestic market and on the international arena. At the same time, the favourable economic growth of the US economy after recession and fast recovery can be also considered opportunities that contributed greatly to the company’s profitability and growth.

Talented employees and managers that were trained in the company that created the most positive environment for their open decisions, active interactions, and influential propositions are the second brick in the structure of General Electric’s.

Besides, the changes that took place in company’s culture in terms of values and the issue of how the process is carried out rather than what is achieved became the core concepts for development of a strong company.

Threats. The internal threats mostly concerned the perception of the changes and the way they were introduced. As such, the corporate culture that existed before Welch obtained the position of the CEO in General Electric’s was not favourable for the introducing of the new values.

As such, Welch had to use harsh methods and eliminate the structure to which the staff members got used to. Another threat was that other companies that operated in the domestic market could become more effective and gain the leading positions earlier than the GE’s targeting the market by themselves.

Plausible Strategies

The plausible strategies for the organisation may include some practices and methods that could have been implemented in the period of Welch being the CEO or as a continuation of effective performance started by this talented leader. As such, the strategies that could have been introduced then include the following ones:

  1. cooperation and partnership with the leading companies in the industry could have been developed whereas the partnership only occurred in the framework of the acquisitions and later global performance and the well-performing companies were regarded as sources of information about secrets of their success;
  2. the integrated culture should have been changed at the very beginning of the change activity as the favourable climate would facilitate the perception of the changes while integrated culture was not the primary goal though it was an important step in carrying out the company’s mission aimed at attractive people who can interact actively and think openly;
  3. technological development could have been introduced simultaneously with the integrated culture issues.

As one can see, these are not exactly the new strategies to be implemented but rather the assessment and some alterations to the strategies that have been introduced and became effective regarding the gained experience and contemporary practices.

The strategies that could be introduced after Welch include development of business relations with markets where the presence of the company is small and focus on the e-commerce as one of the core features of the modern market.

In addition, corporate social responsibility can become an effective tool for attracting talented people with fresh ideas as well as interactions with the community and green practices as a way to make the industry safer for the outer world.

Strategies To Be Implemented

The strategies mostly include the ones that were not introduced in the GE’s yet.

Initiatives. The strategies that should be implemented include the activities related to corporate social responsibility as it is reported to improve the company’s performance and add value. This approach includes the feedback from customers and customer-oriented approach.

Besides, the stakeholders as well as communities should be approached; this concerns the image of the company in the community. In addition, the environmental issues should be approached as one of the integral parts of the corporate social responsibility and contribute greatly to the positive image of the company and growth of its value as well.

Justification. The customer oriented approach is important when dealing with people. Special importance to this method should be given in divisions that specialise in providing services because the services can always be improved using the customer’s feedback and taking into account suggestions and complaints.

Charity and interactions with stakeholders can help the company improve its world-wide image and add value to company as the representatives of the community would appreciate the efforts the company makes in business and for the development of the community.

The environmental protection can be considered one of the great ways to promote one’s ideas using the environmentalist mottos. However, the company can use recycling and other concepts to really save the nature.

Major Issues In Implementation

International norms are important as a part of the corporate social responsibility as the company operates in the international market and interacts with foreign companies developing partnerships.

In this respect, the company should be able to carry out their duties in terms of business contracts taking into account the international laws and laws that are considered valid in foreign countries. Besides, the customer-oriented approach requires more attention to the ways the feedback is received and analysed to improve the quality of services or goods.

The way the stakeholders, partners, and community are approached should coincide with the company’s corporate values though should also be adjusted for the parties concerned. As such, charity issues and different investment funds can be introduced to meet the expectations of the community while the stakeholders can be treated as partners with the same rights as the company.

At the same time, it is necessary to remember about the employees who can be enabled to use the concepts related to the community-oriented approach for their families.

For instance, a company can give loans for medical operations necessary for family members of employees. The environmental issues should be carefully approached in terms of recycling and energy-saving issues taking into account the energy branch of the company.

Works Cited

Bartlett, Christopher A., and Meg Wozny. “GE’s Two Decade Transformation: Jack Welch’s Leadership.” Harvard Business School Review, 9-399-150 (2002): 1-24. Print.

Pahl, Nadine. The Strategy Map for General Electric Medical Systems, 2002. Berlin: GRIN Verlag, 2009.

Peng, Mike W. Business Strategies in Transition Economies. London: SAGE, 2000.

Syrett, Michel. Successful Strategy Execution: How to Keep Your Business Goals on Target. London: Bloomberg Press, 2007.

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