Running head: BUS463 CASE STUDY 1

GE’s Two-Decade Transformation Case Study

Michael A. Leiba

California Baptist University

BUS463 CASE STUDY 2

Implementation of Best Solution

Jack Welch did an amazing job overall as CEO of General Electric and was forced to make

plenty of tough decisions for the betterment of the company. One of the most notorious of decisions

was the restructuring of the organization because it proved to be challenging for a few reasons but

primarily because a lot of people were receptive to change and the lack of support he faced while

implementing this change made it that much more difficult. The best solution to this core problem

would have been more involvement, better clarification of expectations, and lastly more

transparency when it came down to the rationale behind the decision. In an article Fair Process:

Managing in the Knowledge Economy by W. Chan Kim and Renee Mauborgne they stress the

importance of gaining and maintaining the employees trust in the company and more importantly

those that they work for. The article also goes on to speak about three main focal points in which

fair process is centered around: Engagement, Explanation, and Expectancy. Although the outcome,

from a financial and managerial standpoint, turned out just as he had hoped; it also resulted in a

not so favorable outcome from a human relations standpoint. Employees felt mistreated,

undervalued, and worst of all… disengaged because of the lack of communication from upper

management. I believe if Welch had made an attempt at Fair Process through employee

engagement, explanation, and expectancy then the outcome would have been slightly different. If

Welch openly communicated future plans and his expectations clearly and opened the floor for

feedback, then employees would have had a chance to give input and possibly overcome obstacles

in which Welch might have missed; then they would have felt a little more at ease with the decision

that had been made simply because they were at least given an opportunity.
BUS463 CASE STUDY 3

After the restructuring of General Electric had been completed, Welch found it increasingly

difficult to keep their managers motivated, goal driven, efficient, etc. The best possible solution to

the secondary problem is exactly what Welch had done, implemented the Six Sigma initiative. He

knew that he needed to do something to get the company back on the up and up after all the layoffs

and he did just that by implementing one of his final initiatives which focused on efficiency and

employee satisfaction. In an article What Great Managers Do by Marcus Buckingham he shares

what differentiates good managers from great managers and a few key differences is that great

managers play to their employee’s strengths, tailors learning styles for increased efficiency and

understanding. Implementing the Six Sigma quality program was arguably the most influential

initiative that Welch had done at his time at General Electric. Not only was he able to move the

company in the direction he had envisioned, he successfully redefined employee efficiency and

most importantly, prepared

something great for his

successor. He practiced all

the key tactics Buckingham

spoke about in his article

and the results of the

initiative speak for

themselves, see Costs &

Benefits of General

Electric’s Six Sigma

program results above from GE’s 1998 Annual Report.

BUS463 CASE STUDY 4

References
HBR's 10 Must Reads: On Managing People. (2011). In M. Buckingham, What Great Managers Do (pp.
91-110). Boston: Harvard Business Review Press.

HBR's 10 Must Reads: On Managing People. (2011). In C. Kim, & R. Mauborgne, Fair Process: Managing
in the Knowledge Economy (pp. 111-132). Boston: Harvard Business Review Press.

General Electric Annual Report, 1998