JACK WELCH & G.E

Change and Continuity in Contemporary Business

Name of Writer

Name of Institution

Table of Contents

Introduction3

Fix, Sell or Close3

Work Out & Best Practices6

Global Takeovers7

Dependence on Leadership7

Company with No Boundaries8

Stretching for Targets8

Keeping & Developing Human Resource9

Succession to Jack Welch9

Modification in Strategies11

References13

Change and Continuity in Contemporary Business

Introduction

Jack Welch has been the CEO of G.E for more than 20 years and retired on Sept 7, 2001. Within the two decades, he took the company from almost a dormant company stuck within the recession to a vibrant, dynamic and growing conglomerate in the world. With only 20% percent global presence in the 1980 to more than 80% global presence in the year 2000; he has totally transformed how people used to perceive G.E.. Due to his efforts his company has been dubbed as the Most Admired Company in the United States' by Forbes, as well as the Most Admired Company in the World' by Financial Times. Moreover, Fortune has dubbed him 'Manager of the Century'. Retiring with such high accolades, Welch has no doubt left undeniable imprints upon G.E.

Fix, Sell or Close

The first change that Welch introduced in G.E's business structure is to make each of the business that G.E holds to be either number 1 or number 2 in the competitive market or to disengage from that business. However, Welch quickly changed from a 2 point strategy to a three point strategy i.e. from being number 1 or number 2 he proposed the idea of fix, sell or close. During his early years as CEO of G.E, he thought about bringing a huge change in the company by selling or closing the businesses that are not doing so well in the recessionary years of 1980s. This step was very bold looking at the young age of Welch as CEO of the company. Since, by selling off or closing down the businesses there would be thousands of people who would get unemployed and there could be lots of criticism for Welch just at the start of his career as CEO of G.E; nonetheless, he stood by his bold decisions despite criticism for so many closures and sell offs. He sold around 200 businesses in the 1980s decade for $11 billion; however, the brighter side of the argument presents by Welch that spared him from fierce criticism was the acquisition of more than 370 companies and invested more than $21 billion in them. This made G.E much more diverse, agile and efficient, since it got rid of all those businesses that were not performing well and bought new businesses with better chances of performing efficiently and effectively. The downside of these decisions was that it led to a tremendous amount of people getting unemployed in a recessionary time when jobs are most hard to find and probably had a drastic effects on the economy (Smart, 2006).

Moreover, he removed 50% of his strategic planning staff for the sake of removing bureaucracy from the company. This was to reduce the laborious process of planning that was there for making ...