Management Operations 1

Management Operations

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 Management Operations 2

TABLE OF CONTENTS
Introduction......................................................................................................................................2

The current position of the company...............................................................................................3

Jack Welch achievements, leadership, and management styles at General Electric.......................4

Jeff Immelt achievement, leadership, and management styles at General Electric.........................5

Leadership and management of current Chief Executive Officer Henry Lawrence Culp Jr. at GE7

Difference between the role of a leader and the function of a manager, as reflected in the GE

business case study..........................................................................................................................8

Conclusion....................................................................................................................................11

References......................................................................................................................................12
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Introduction

General Electric (GE) is an American multinational conglomerate headquartered in

Boston, which is renowned as the largest and most-diversified corporation in the world. The

company has diversified products, which include electrical and electronic equipment, aircraft

engines, and financial services. It is essential to note that the company was incorporated in 1892,

and it acquired all assets that belonged to Edison General Electric. With more than 100 years in

the electrical industry, GE continues to supply superior products to its clientele, thanks to

excellent management in the company. By 1900, the company was recognized as the best and the

largest producer of largest lines of electrical consumer goods that formed the foundation of

supplying Hotpoint and other home appliances worldwide (Gitman et al., 2018, p. 7).

The current position of the company

Currently, most of GE's products are visible to the general public; however, the largest

consumer of the company is the U.S. Department of Defense. With much improvements in the

21st century, the company has invested heavily in different industries such as commerce finance,

consumer finance, infrastructure through manufacturing of jet engines and locomotives,

healthcare services through the manufacturing of imaging products, and media and entertainment

(Gitman et al., 2018, p. 10). The company has been awarded different awards for its contribution

to green energy and innovation. Additionally, the company has appeared continuously on the

fortune 500 list for the last 22 years. More importantly, the company's financial reports indicated

the company's revenue at $121.615 billion in 2018. Currently, General Electric Company has

employed more than 200,000 employees worldwide. All these achievements and success of the

company are attributed to effective leadership and management in the company (Saxena and

Gupta, 2018). Therefore, this paper seeks to analyze the transformation of General Electric
 Management Operations 4

Company through the actions and achievements of Jack Welch, Jeff Immelt, and the current

Chief Executive Officer Henry Lawrence Culp Jr.

Jack Welch achievements, leadership, and management styles at General Electric.

In 1960, Jack Welch joined GE as a chemical engineer, and earlier the following year, he

wanted to quit the company due to bureaucracy he observed. Through various promotions at the

company, he became the CEO in 1981, and he holds the honor of becoming the 8th and the

youngest CEO in the company. In 1982, Jack dismantled the management that had been

previously practiced by his predecessors. Through his contributions towards simplification and

consolidation of the company's processes, there was a significant rise in revenue, which was

attributed to enhanced employee motivation and the cultivation of a productive business

environment. In his two decades role of leading the company, the market value rose from $14

billion to $410, and he was awarded the manager of the century in 1999. After his retirement, the

company recognized the efforts he had put in the company, and he was rewarded with severance

payment estimated between $417-$420 million (Arthur et al., 2017, p. 3).

One of the management techniques adopted by Jack Welch was six sigma concepts,

which incorporate tools and approaches for continuous improvement by eliminating defects in a

product, processes, or services. In the application of the concepts, Jack Welch built a workplace

that believed that his company and other subsidiaries should be either number 1 or number 2.

The strategy helped in improving the company's productivity, which relied on the value of the

people working in at GE (Snee and Hoerl, 2017, p. 4). Moreover, the management style can be

explained through scientific management theory, which advocates for matching employees' skills

with their job roles. This is more evident by 'rank and yank' style of dealing with

underperforming employees and managers. Though the approach did not consider the strengths
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and weaknesses of employees, it created internal competition in the company leading to

enhanced production.

In most cases, Jack Welch considered his team as the most crucial asset in promoting the

company's performance. As such, Welch adopted a talent-centric management style that was

based on building the best team to outdo competitors in the industry. Moreover, he made surprise

visits, where he could review employee performances. In this aspect, he reflected a leader who

would tell his employees where they stand and the needed improvements to achieve more. As

indicated by Snee and Hoerl (2017, p. 5), Welch dedicated almost 60% of his time in the human

resources department reviewing performances and giving honest appraisals to his managers and

employees. Moreover, Welch adopted a 20/70/10 differentiation, where 20% are employees who

perform excellently and are referred to as all-stars. These employees would be rewarded to retain

their services in the company. The 70% are employees who need the motivation to enter into the

20% class, while 10% are employees who have less contribution to the company's performance.

Jeff Immelt achievement, leadership, and management styles at General Electric.

In 2001, Jeff Immelt was appointed as the CEO of GE, which turned to 16 years of

downfall in the company's market value with a significant drop in stock value by $540 billion.

However, Jeff left behind the legacy of transforming GE from traditional corporate conglomerate

to digital industrial giant. The business framework adopted by Jeff sought to embrace data and

analytics as the driving force transforming its operations globally. According to Immelt (2017, p.

2), the current business organizations must adopt advance technology in their processes and

operations, which necessitates changing the business model to fit in the competitive

environment. It is worth noting that Jeff oversaw GE operations in tough times, which were

characterized by the September 11 attack and 2008 recession.

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Specifically, some of the transformations made by Jeff Immelt were founded in

technology, and they include transformation of company's portfolio from classic conglomerate to

industrial one, innovation company using tech-driven growth, transformation from a U.S. focus

company to a global company, from industrial strategic focus to digital industry, and from a top-

down organization to agile and decentralized organization. An increase in GE's portfolio was

mainly driven by divesting from nonindustrial and slower-growth and investing in financial

services, media, and entertainment. However, this strategy was heavily criticized since the

organization did not obtain the projected profits in the long-run (Gulati, 2017, p. 2).

During his term at GE, Jeff's management style would be described as paternalistic,

which allowed him to make the best decision for the company. According to (Tian and Sanchez,

2017, p. 4), paternalistic leadership involves a dominant figure who assumes the role of a

patriarch and treats employees and staff as larger extended family. Moreover, he put more

emphasis on efficiency, productivity, and employee performance by adopting operational

processes that would require less cost in the long-run. Furthermore, Jeff's management style

could be explained through six sigma approaches by establishing processes efficiency while

cutting back on wastefulness. Moreover, he concentrated on centralizing different operational

departments to reduce administrative costs. Additionally, Jeff is renowned in promoting

democratic leadership, characterized by collaboration and interactions with his employees and

managers (Hou et al., 2019, p. 6). Moreover, many employees in the company attribute the trust

and cohesion to the motivational style adopted by Jeff during his tenure.
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Leadership and management of current Chief Executive Officer Henry Lawrence Culp Jr.

at GE

Since October 2018, Henry was selected as CEO at GE with an outstanding record in

leadership, strategy, and general management exhibited by his tenure at Danaher. Due to

significant progress made by Jeff in incorporating technology at GE, appointing Henry was

perceived as an excellent idea since Danaher is one of the largest players in science and

technology conglomerates. Henry's appointment was seen as hope to shareholders given an

excellent track record in transforming Danaher from a business worth $9.7 billion to $50 billion

under 14 years.

In the last few years that Henry has led GE, it is clear that he values a collaborative

leadership style, which requires the leader to cultivate relationships and promote team spirit for

the achievement of organizational goals. It is essential to note that collaborative management

requires unity and teamwork, effective conflict management, and incorporation of employees in

critical business operations (Thompson and Glasø, 2018, p. 4). The management style adopted

by Henry can be evaluated through administrative management theory, which considers many

business functions that an organization must conduct to achieve competitiveness and

profitability. This is mainly attributed to Henry's capabilities in supporting different

organization's functions. Moreover, the creation of a culture that appreciates the value of

employees and managers facilitate the adequate flow of information for maximum production.

According to Edwards (2018, p. 48), administrative managers add value to organizations by

challenging the existing procedures leading to the adoption of effective styles in realizing the

shared goal.
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Difference between the role of a leader and the function of a manager, as reflected in the

GE business case study.

With reflection on General Electric Company under different leaderships, it is clear that

leaders and managers have different roles in promoting the organization's goals. The main

difference between a leader and a manager is that leaders have people follow them, whereas

managers have people working for them. However, for effective performance, an organization

requires both managers and leaders to carry the organization's vision for effective

implementation. From GE's business case study, it is clear that Jack Welch was more of a

manager than a leader. However, he had some character traits that can describe a transactional

leader who would reward the top-performing employees in the company (Arthur et al., 2017, p.

3).

According to (Cho et al., 2019, p. 3), transactional leadership is essential in establishing

an employee's role and responsibilities and usually encourage maximum production by setting

higher goals. Jack Welch heavily utilized this approach by establishing the purpose of being

number 1 or number 2, and failure was leading to firing. However, it is essential to note that the

situational leadership style was heavily utilized by Jack Welch, whereby he promoted GE's

performance by changing business approaches adopted by his predecessors. In most cases,

situation leadership reflected in Jack Welch's abilities intersected between authoritative and

coercion leadership with firing threats, which created a competitive culture in the organization.

With effective production associated with Jack Welch leadership, there are several weakness in

transactional leadership, which includes elimination of individuality from the production

processes due to its strict rules and regulations, limits innovation capabilities, creates more

followers than leaders, tend to focus on consequences than rewards primarily, places zero value
 Management Operations 9

on empathy as reflected in Jack Welch firing, and it makes difficult for employees and staff to

counter decisions made(Cho et al., 2019, p. 33).

Unlike Jack Welch, Jeff Immelt portrays the attributes of a leader rather than a manager.

Some of the strongest traits reflected by Jeff Immelt include effective communication, vision,

honesty and integrity, and inspiration. From the GE case study, the change from a manager to a

leader in the organization may result in significant changes in organizational culture, which

could lead to poor performance. Though numerous challenges faced Jeff Immelt's leadership, it

is essential to note that the shift in management and leadership styles contributed to employees

meeting the minimum, which lead to the poor performance of GE in the long-run. In a close

analysis of his leadership style, Jeff Immelt utilized democratic leadership, which allows leaders

to make the decision in consideration to employees' input (Odumegwu, 2019, p. 131). The

democratic style is most effective because leaders recognized the contribution of employees,

which helps in increasing motivation and promoting productivity.

However, the downsides of this leadership approach are requirement of time to reach

consensus, creation of continuing uncertainty since decision is not made instantly, provides a

platform for shareholders and employees to question the capability of the leader, it does not

guarantee the best possible solution, and it encourages no one to take responsibility for failures in

organization (Odumegwu, 2019, p. 137). During his tenure at GE, Jeff Immelt was ousted from

his position since shareholders doubted his abilities in turning the company's value to glorious

days. However, Jeff Immelt cultivated an open-system approach to management that allowed the

exchange of information, energy, or resources between employees and managers. Moreover, the

open-system is mainly characterized by the influence of the environment in determining the

organization's behavior (Warrick, 2017, p. 5). During his tenure, the business environment was
 Management Operations 10

profoundly affected by the 9/11 attack and the 2008 economic recession that resulted in a decline

in GE's value.

Currently, Henry Lawrence Culp Jr. seems to adopt both transformational and democratic

leadership. From this perspective, Henry seeks to create a superior team that would collaborate

effectively in achieving the shared goals. With great emphasis on administrative management

theory developed by Henri Fayol, several principles have been adopted in GE processes such as

Esprit de Corps, equity, and centralization, unity of direction, discipline, and division of work.

According to Edwards (2018, p. 55), the administrative theory approach seeks to find a rational

way to design an organization as a whole with a critical focus on various processes that

determines the effectiveness of the business in diverse environments.

Through his record in Danaher, it is essential to note that the incorporation of various

leadership styles and administrative management approaches would be effective in building an

effective organizational culture centered on values, productivity, and employee motivation. Since

the strengths and weaknesses of democratic leadership have been covered in previous sections,

transformational leadership seeks to improve upon the organization's conventions to promote

productivity. In most cases, leaders in different departments are involved in setting challenging

but achievable goals that would require employees to step out of their comfort zones. According

to Kark et al. (2018, p. 191), the adoption of a transformational leadership style is highly

effective in companies seeking growth. However, some of the weaknesses in this leadership style

include a high probability of making wrong decisions through abrupt decisions, can result in

employees burn out, lack of proper prioritization where leaders may choose to coach and mentor

specific team members, and assumption of motivation.

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Conclusion

The General Electric Company presents a business case study that is effective in

analyzing the transformation of the company through different leadership. The company enjoyed

superior performances during Jack Welch's leadership, who mainly promoted a transactional

leadership. However, with varying abilities of management identified in three leaders, it is clear

that managers and leaders have different roles in the organization. Still, they are essential in

promoting business performance. Though various challenges hampered Jeff Immelt's leadership,

he helped in transforming the company into a digital age, which is the current trend in the

industry. Finally, Henry Lawrence Culp Jr. is the current CEO at GE, and he will need effective

leadership strategies to fulfill business objectives that meet both clients' and shareholders'

expectations.
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Cho, Y., Shin, M., Billing, T.K., Bhagat, R.S., 2019. Transformational leadership, transactional

leadership, and affective organizational commitment: a closer look at their relationships

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