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Published by: hatanolove on Jun 28, 2008
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12/21/2013

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Kit KwanHv6255
General Electric under the leadership of Jack Welch
According to the text, corporate social responsibility is the corporate duty tocreate wealth by using means that to avoid harm to, protect, or enhance societalassets. General Electric in the Jack Welch era did not fulfill the duty because of thefollowing: Job elimination within the United States through layoffs, subcontracting,and outsourcing to other countries. A Defective evaluation system hurt the morale of employees who were not on top. Pollution in the Hudson Rivers, GE fought theextended political battle against the environmental cleanup on own expense. Unfair  pension fund among the retired employees triggered the protests against GE.Criminality at GE, the company committed a long string of civil and criminaltransgressions.
Removing the working opportunities within the United StatesA big bunch of people were dismissed when Jack Welch was in charge as thechief executive officer in general electric. There were 404,000 GE employees beforehe took over the top management position, but only 313,000 left when he retired. Inorder to fulfill the corporate social responsibilities, GE, as an American basedcompany, was supposed to protect social assets, which was to maintain a certain lever of local employment, but it did a ruthless cut on jobs for profit oriented purposesinstead. Since GE in the Welch era had a ultimate desire gain more profits, the
 
company simply transferred most of its facilities and related job opportunities to thelow wages paid, third-world countries. According to Ed Fire, the union’s president,assumed two-thirds of the 30,000 local lost jobs were the cause of outsourcing.
Using the vitality curve to evaluate employees’ performanceGE in Jack Welch era changed its ranking from five to three, and created thevitality curve system. This system categorized the top 20% performers as As, themiddle 70% as Bs and the bottom 10% as Cs. This evaluation system did not onlydiscourage teamwork by pitting people against each other, but also promoted back-stabbing behaviors. The system was also defective because of its inflexibility tocontribute unfair results when high and low performing units must classify managersat the same way. In fact, GE cruelly ranked the bottom 10% as inefficient workers andfired them whenever necessary. The vitality curve created a high-performancemanagement team, but it failed to create diversity at GE. Since Welch was themanagement icon at the period, many other corporations tried to copy the ideas for raising the performance, and the whole society became viciously competitive under the introduction of this unfair evaluation system.
Pollution in the Hudson rivers.According to the text, for 35 years, several GE manufacturing plants in NewYork released polychlorinated biphenyls (PCBs) into the Hudson River. Since PCBs istoxic to humans and animals, and is the cancer agent in test animals and humans; itwas outlawed in 1977. In 1983, the Environmental Protection Agency made the river a Superfund site because of the heavy released of PCBs by GE. After realizing the
 
fact, GE took action to refuse removing the dangerous deposits on its own expenses,and to hire its own experts to fight the liabilities. At last, GE complied to ease the problems with the cost of 460 millions dollars. However, GE polluted the river butrefused to clean up became a disgrace in its history and a consideration of unethical,irresponsible to the corporate social responsibility.
Unfair pension fundGE announced to increase on employees’ pension fund from 15 to 35% in year 2000 under the pressure of unions and pensioners. However, the prices have beenrising since 1965 by 60%, retirees actually lost ground. GE’s pension fund wasobserved to be very low comparing to other gigantic companies within the industry.Jack Welch worked at GE for forty years and received 357,000 dollars pensionmonthly while and other employee worked the same length for only 737 dollars.
Civil and criminal acts at GEDuring Jack Welch’s tenure, GE committed a long string of civil and criminaltransgressions. There were thirty nine law violations, court-ordered remedies andfines in 1990s. Many of them were pollutions hazards from its plants and other facilities. Others were consumer fraud and defense contracting fraud. Although inmost of the business reviews, GE was ranked as one of the top performance companyin the United States history, it did not obtain respects from societies.GE became the most profitable company under Jack Welch’s hand without anydispute. Obviously, it did not reached Fridnan’s view that the only socialresponsibility is to increase profits without violating the law, Jack Welch did break the

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