Introduction
The Jack Welsh era in General Electric (GE) is a great example of managerial power and innovation through corporate social responsibility. Welsh, ex-chairman and CEO of GE, first joined the company in 1960. By 1981, he had earned the title of CEO and continued to make progress both within and for the company (Steiner and Steiner 139).
Welsh’s innovation and social strategies brought GE to new levels of success, thought to be impossible by some beforehand. In his first years as CEO, Welch began to remodel the company in several ways. He removed people from their positions, reorganized departments and processes, and sold off areas of the company he deemed to be ultimately useless. Welsh effectively restricted numerous layers of the organization, while employing techniques such as six sigma, the boundary-less organization, and others while taking advantage of globalization; overall these strategies would allow Welch to bring GE from the brink of failure to one of the most valuable organizations in existence.
Welch’s strategies and early transformation
Before Jack began to transform the image of the company to highly successful, he transformed the image of himself from ruthless to genius. When he first rose to CEO in the early 1980s, he began to remove unnecessary elements of the company wherever possible (Steiner and Steiner 139-140). While this downsizing seemed to be excessive to some, company efficiency would improve while the flow of functionality would allow the organization to become more tightly knit. Furthermore, these reductions and restructuring would effectively prepare the company for the market boom it would see in the following decade. Following this time frame, Welch’s image of a ruthless CEO on a rampage to remove anything not proving itself would convert to one of a managerial genius.
Welch effectively masked the company’s minor problems with his effective strategies, as the high levels of growth the company experienced in the 1990s drew attention away from minor corporate mistakes (and even scandals in some cases.) During this growth, Welch proved that he was as fully capable of purchasing and constructing areas of a successful organization as he was at downsizing. The purchase of RCA and affiliations with NBC showed his success in innovation, while during this time GE would change from a mundane company to a veritable powerhouse.
Welch’s management and social work
GE’s early financial and economic issues were reflecting through its restructuring of management. At the time of Welch’s assumption of the CEO position, GE’s drastic changes surprised many due to its radical nature, success, and innovative genius. GE would soon purchase over 300 businesses for over $11 billion while selling over 200 for nearly $6 billion. As mentioned, this behavior was initially seen with skepticism but would soon prove to be the workings of a corporate genius. Further to the surprise of many, Welch put decentralization of management on his agenda. In doing this, however, he would retain the previous format of department classification (Steiner and Steiner 140-143). Welch would soon make it very clear that he aimed to make the company reach the pinnacle of success in every area possible.
Welch would continue to employ new strategies to improve the company following his radical multi-billion dollar business deals. Welch adopted the six sigma strategy within the company, one example of his esteemed efforts in continuing to improve and restructure the organization following the major changes between the 1980s and 1990s. This quality control effort included Motorola and Allied Signal while aiming to reduce errors and costs. GE would soon reveal that six sigma would net roughly $1 billion annually in savings by 1998 while playing a role in other efforts (such as shifting labor markets to inexpensive locations and closing the lesser profitable facilities) (Steiner and Steiner 140-146).
In 1999, Welch would show more innovation and success with a new initiative that incorporated the internet and the growing technology. At this time, Welch was using six sigma, technology, globalization, and extended services to the companies highest advantages, and it was arguably at this time the Welch was at his peak. GE, like many companies that had been in business for a long period, was skeptical of internet technology’s recent high levels of success. Welsh saw through this and began to take advantage of e-commerce to continue the expansion of the organization.
Concluding remarks
Welch’s managerial success and innovation have transformed him from being considered a ruthless figurehead to being a textbook example of corporate social responsibility. His downsizing and restructuring would prove to be a great foundation for the new collaborations with a vast variety of stakeholders, while he would also take advantage of globalization to maximize efficiency and productivity within the company. Later his integration of six sigma and internet technology will further his dedication to corporate social responsibility and stakeholders. Just before 2000, Welch’s success had led GE to be one of the world’s most quickly expanding companies, while the year’s revenues had expanded 11 percent to over $111 billion, many times over the revenue of the company in previous years (Steiner and Steiner 140-146).
Works Cited
Steiner, G. and Steiner, J. Business, Government and Society: A Managerial Perspective. McGraw-Hill Higher Education, 2009.