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Essay / General Electric Case - 1744
Before Jack Welch ascended to his leadership position, the world-famous company was on the verge of an impending crisis that was barely noticed by anyone. As a result, he decided that the company needed a change to meet the economic and competitive challenges of the market. Through his diverse business leadership strategies, he led the company through a salient and radical corporate restructuring revolution, with the goal of transforming GE into a global leader in benchmarking and achieve maximized productivity and work efficiency. His restructuring tactics included purchases and sales of business units, abandoning a bureaucratic culture and structure in favor of one of openness and flexibility, removing unnecessary layers of middle management, laying off thousands of employees and creating a new reward and recognition system. The result was that in 1991, Welch expected to receive $5 in sales for every dollar of working capital invested in 1991, making it one of the most profitable companies in America. However, such dramatic undertakings created challenges for Jack Welch due to internal resistances arising from cultural and personal values and beliefs. I encountered a number of problems while reading this article. Many of the concerns GE faced stemmed from the corporate bureaucratic structure that had been present in the organization since its inception. Jack Welch, when elected CEO, found that routine paperwork, protracted decision-making procedures, and a rigid, centralized hierarchy were no longer effective for the company. Resources and human capital were not used effectively and he immediately embarked on the path of organizational ... middle of paper ...... and people restructuring. He might make decisions that are contrary to what employees expect from their position, such as deciding to reward only the brightest workers. This could create dissatisfaction among staff over working conditions, causing some people to abandon GE. Jack must analyze and evaluate each decision very scrupulously, ensuring that it is consistent with employee expectations as well as his goal of transforming GE. For change to be effective, the CEO must act immediately to instill his values and vision in the company's employees. help them understand and support this radical “revolution.” Employees must “understand the why; they will then be more likely to accept the what.” Creating an open, collaborative workplace where everyone's opinion is welcome is the key to successfully creating a truly borderless business..