- Published: October 31, 2021
- Updated: October 31, 2021
- University / College: University of Minnesota Twin Cities
- Level: High School
- Language: English
- Downloads: 42
GE Case Questions / Baldrige Assessment Submission
When Jack Welsh took over the management of General Electric Company from Reg Jones in 1981, manufacturingwas its core business. The company was highly bureaucratic and hierarchical hence unresponsive to changes. By 1980, it had nine layers of hierarchy and 28 employee classification levels hindering effective communication and information sharing. Managers lacked customer focus and spent much time dealing with minor internal issues. The strategic planning process was elaborate, rigid, time consuming, centralized rather than real time planning. Performance measures were non-existent hence pay was based on position or seniority. The company thus needed to change its corporate strategy to become more efficient and responsive. This for Welch was, “to become Number One or Number Two in every market served: fix, sell or close” (p.5).
Culture change focused on speed, simplicity, and self-confidence to be achieved through work-outs and transfer of best practices across all businesses. Work-outs were to create a healthy working atmosphere, eliminate bureaucracy and increase productivity. The strategies also enhanced quality leadership and information sharing. Accustomed to a sedate style, and the culture of “Not Invented Here” (P. 13), some executives found it hard to embrace the boundaryless cultural values. The executives and managers now had to devise ways of ensuring their efforts added value to the company through different performance measures.
Resistance was expected due to cultural change. Some managers could resist the open and participative culture hence use unacceptable means to induce performance such as staff layoffs or tyranny. These managers may resist performance based pay and increased workload. Staffs may resist the layoffs due to job insecurity.
Lessons learned are that leaders should have a clear vision and be able to articulate that vision in order to gain commitment from followers and also be resilient as changes are inevitable. Leaders should also be persistent or relentless in pursuit of their goals just like Welch did not give up in achieving a leading position in the market despite criticisms from within and without. They should be open to new ideas from all corners and avoid being bureaucrats. Integrity and ability to energize others to put all their effort in a course are also vital for success.