GE's Two Decade Transformation
• Examine Jack Welch and his transformation of General Electric
Welch's initial resolve to make the company more agile and lean led to a highly systematic downsizing, delayering and destaffing process focusing on every large headquarters group, which included a cutback by half in the company’s 200-strong strategic planning workforce and the elimination of its arduous strategic planning structure. In its place, he incorporated "real-time planning'', discussed with fourteen key business leaders via informal sessions. GE’s budgeting process was also drastically altered: results were assessed against external competitive conditions, instead of internal comparisons. In the year 1985, Welch did away with the sector level; to guarantee every business directly reported to him, he eliminated 5 hierarchical levels (Bartlett, 2000).
The company did away with 64,160 hourly and 59,290 salaried jobs from 1981 to 1988; divestiture led to the elimination of 122,700 more jobs. While a modest revenue growth from 27.2 to 29.2 billion dollars was achieved from 1981 to 1985, operating profits grew significantly from 1.6 to 2.4 billion dollars. Years after commencing extensive reform, Welch deemed GE’s hardware to finally be in place and believed the time had come to concentrate on its software. His priorities shifted to achieving cultural change...
References
Adari, P. (n.d.). GE and Jack Welch Leadership - Case study approach. Retrieved March 19, 2018 from http://www.academia.edu/11670513/GE_and_Jack_Welch_Leadership_-_Case_study_approach
Bartlett, C. A. (2000). GE's Two Decade Transformation: Jack Welch's Leadership. Harvard Business School
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