Isaac Jones Leadership in Organizations Dr. T. L.

Friedrich MWF 12:00 - 12:50 Analysis of Jack Welch This analysis will look at the legacy of renowned businessman Jack Welch, former CEO of General Electric (GE). The purpose of this paper is to evaluate Welch as a leader, using concepts and theories related to leadership. These theories were chosen because they are traits that comprise an excellent leader. In order for a leader to properly exercise these traits, they have to have to be personable, as well as respectable. An effective leader also has to be able to manage their employees and determine what they need in order to excel. After determining what it took to be a leader, the theories that were chosen for evaluation in this paper are: path-goal, leadermember exchange (LMX), transformation leadership, authentic leadership, and team leadership. Welch possesses all these qualities, and by using analysis and descriptions of each theory, I will discuss his effectiveness as a leader. Born in Salem, Massachusetts, Jack Welch came from a middle-class background, but has since become a prominent figure in the business world. A graduate of the University of Massachusetts, he continued on to earn his PhD in Chemical Engineering from the University of Illinois. He became a part of the General Electric team at the age of 24, and in the year of 1981 was named CEO at the age of 45, making him the youngest chief executive to be put in office. It was in this position that Welch began to make his mark and receive recognition as a highly celebrated and respected business leader, whose model many leaders continue to follow today. With Welch in the position of CEO, General Electric saw great change. Their revenue expanded from $25 billion dollars to a phenomenal $130 billion, and their income increased ten-fold. Described as being one of the toughest bosses in America, he was known for being the kind of

boss that kills off people, but leaves the building standing (Lowe 18). Because of this, he received the nickname Neuron Jack, a title that was replaced by Krypton Jack, the moniker he received after people began to view him as being some sort of business Superman. Though he was initially perceived as being a harsh man, his methodology spurred a movement within the world of business. The cost reduction and enhanced efficiency focused model became very popular among other leaders, which accounts for Newsweeks description of Welch as being Americas uberboss. Currently, Welch is an esteemed professor and speaker. Even after his retirement in 2001, he has remained relevant in the business world by teaching others about his technique. He has written two bestsellers, one of which grossed a $7.1 billion deal, and works online with Strayer University students enrolled in the Jack Welch Management Institute. Using the title of the Distinguished Professor, Welch uses mediums such as video lectures and email in order to interact with his pupils and teach them his methods and principles for success. Because of his outstanding achievements, it is no wonder that Welch exemplifies many of the concepts and theories used in business. Though his nickname Neuron Jack was well deserved, Welch was still a personable and relatable boss. Because of his humble beginnings, he was able to build camaraderie amongst himself and his employees. It was this rapport that evidenced the path-goal theory in Welchs career as a businessman. The path-goal theory incorporates motivation techniques such as making the employees comfortable and making them feel that their work is not going unrewarded. Through guidance and coaching, the leader is able to manage their employees, as well as keep them content. I believe this is the reason why Welch is such an effective leader. The ability to keep your workers happy, as well as remain in an authoritative and respected position is difficult. Once a kinship

has been made between employer and employee, it can be difficult to maintain a professional relationship. What makes Welch an excellent leader is that he is able to make his employees feel valuable, as well as comfortable approaching him, but they ultimately know that they have to respect him. I feel that this is an especially important element for a quality leader to have. It is easy for someone to use fear in order to get people to respect him or her, but a good leader is able to be kind to their employees and still yield results. From personal experience, I know that being pleasant towards others tends to work better rather than using brute force. When people try to force others to do things, it builds resentment. This resentment can discourage employees from performing well, and this will ultimately cause the business to fall apart. Welch was able to recognize this, and so maintained a healthy relationship with his workers. This healthy relationship with his employees also exemplifies the leader-member exchange theory (Northouse). This theory revolves around the interactions between employer and employee. In Welch: an American Icon, there is a quote from marketing manager Brian Nailor that captures Welchs essence very well. It reads, Hes able to get people to give more of themselves because of who he is. He lives the American dream. He wasnt born with a silver spoon in his mouth (Lowe 33). I feel that much of Welchs success is due to the fact that he properly exercises the leader-member exchange theory. The ability to talk to your employees in a way that both gives and receives respect, and the ability to maintain this pleasant yet professional relationship is key to maintaining a content staff. Studies have shown that the usage of the LMX theory resulted in positive outcomes such as stronger dedication towards the company and more promotions amongst the workers. By keeping the staff comfortable, the business remains respected and well run.

Transformational leadership focuses on how effective leaders are in inspiring others to achieve great things (Northhouse). Throughout his career, Welch has influenced many other chief executives of big companies. Though he has long since retired from General Electric, he still continues to inspire people. In addition to his position as an online professor at Strayer University and his two bestsellers, Welch has inspired people through various mediums. Since his retirement, Welch has spread his vast knowledge of business through things such as a weekly column for Newsweek, which he did for four years, and featuring on television as a business commentator. He also taught at the Massachusetts Institute of Technologys Sloan School of Management. On top of all of this, he continues to teach seminars not only to students, but to leaders and executives as well. Welchs ability to inspire others is what keeps him relevant even after his career at General Electric. Because he is able to be so inspirational to others, he can move others to become as great as he has, and by doing so improve the quality of others lives. Welch is the perfect example of an authentic leader. The authentic leadership theory targets undisputed leaders (Northouse). It highlights leaders that are reliable and steadfast. Welch relates to this theory because of his success building General Electric up from what it once was. Originally, GE was a relatively small company, capitalizing with a total of $13 billion. When Welch took the position as CEO he raised their value to $525 billion. He also raised the number of employees. Because of his strong qualities as a leader, Welch was able to turn General Electric into a highly ranked company, placed among international brands such as American Express and Boeing. If Welch were not an authentic leader, he would not have been able to build his company up so much. It is because he already possessed the capability of a leader that he was able to make such improvement, as well as continue to inspire people, educate future leaders, and provide impressive results.

Team leadership is something that Welch has shown exponentially. This method focuses on the importance of teams and the leadership that they receive (Northouse). The main objective of team leadership is to assist the group in reaching their goals through surveillance and analysis. With his ability to exercise many traits of an excellent leader, Welch undoubtedly exemplifies team leadership. His combination of people skills, respectability, and business savvy made it possible for him to make such strides within the business world. Though he came from humble beginnings, Welch and his immense knowledge of business propelled him to the top, thus taking his company and the employees with him. Welchs people skills made it possible for him to preside over different teams. This same skill helped him to keep these teams on task, as well as to figure out what they needed in order to succeed. Because of his team leadership, Welch was able to expand GE to a company of proportional size. The number of employees grew to around 460,000 people, an accomplishment that would have been impossible without the ability to be a leader. Overall, Jack Welch has proven himself as a leader, and continues to do so. I know that I personally have been inspired from learning about his accomplishments. Hearing about Welchs hard earned successes and the things that he continues to achieve now, it inspires me to reach higher and achieve amazing things to the same magnitude that he had. Even long after Welch is gone he will continue to inspire those that come after him. His teachings, principles, and contributions to business overall will continue to shape the future. Those that choose to pursue a career, not only in the field of business, but one in which they have to act as a leader could learn a lot from Jack Welchs techniques.

Works Cited "Jack Welch." JWMI.com. Strayer University. Web. 19 Apr. 2012. <http://www.jwmi.com/content/about-jwmi-jack-welch>. Lowe, Janet. Welch : An American Icon. Wiley, 2001. eBook Collection (EBSCOhost). Web. 27 Apr. 2012. Northouse, Peter G. Leadership: Theory and Practice. 5th ed. Los Angeles, CA: Sage, 2010. Print.