Name: Early Joy L.

Borja MBA 201

Cherry Mae Butihin

Case Study
Jack Welch: Leadership that Creates Innovation

I. Executive Summary: (Facts of the Case)

General Electric is one of the most successful firms in the history of the globe. It is an

American multinational organization that has expanded its wings into numerous business

areas, such as the technology, infrastructure, finance, consumer, and industrial sectors.

General Electric is not only one of the most innovative companies in the world, but it is

also a leading candidate for the title of finest company in the world based on its brand

image and profitability. Particularly in the past thirty years, General Electric has made

significant strides and has remained the only firm since the first listing of companies in

the Dow Jones index. This accomplishment is particularly noteworthy given that it

occurred almost 100 years ago. In addition to this, General Electric is well-known for the

prominent executives it has cultivated over the years. The leader who had the most

impact on the company, earned the reputation as the one people looked up to and

followed the most. In 1981, John Francis Jack Welch Jr., more often known as 'Jack

Welch,' succeeded Reginald Jones as the CEO and Chairman of GE, a position he held

until 2001. Jack Welch's tenure at GE was from 1981 to 2001.

II. Introduction: (Point of View)

General Electric is currently confronted with the imminent retirement of Jack Welch.

Consequently, there is a heightened level of uncertainty over the ability of anyone to

 effectively manage and sustain the rapid rate of planned development and overall

transformations that characterized the Welch period. The management style of Jack

Welch, the CEO of GE, is widely regarded as legendary due to his strong aversion to

outdated and bureaucratic approaches to company procedures (Bartlett & Wozny, 2005).

III. Problem Statements

The fundamental issue examined in this case study is the organizational

reorganization undertaken during the tenure of Jack Welch as the leader of General

Electric. Given the prevailing economic challenges of the day, his forward-looking

perspective may be regarded as one of the most unconventional concepts. In 1981, the

United States saw a period of economic downturn commonly called a recession. Despite

the prevailing crisis, Jack Welch, as a prominent figure inside General Electric, was

anticipated to assume a leadership role and effectively navigate the organization toward

continued growth. This undertaking posed significant challenges because of the

exorbitant loan rates and the nation's most excellent unemployment rate since the great

depression. However, Jack Welch demonstrated his will to confront the problem by

recognizing that the most effective approach for him to excel was to disrupt the existing

formula and modify the foundations set by Reg. Welch's pioneering concept of attaining

a leading position as either the primary or secondary contender in all of General Electric's

enterprises was not devoid of contention.

IV. Analysis

A. SWOT Analysis

B. Key Issues
 C. Stakeholder Analysis

D. Leadership Style and Innovation

E. Alternative Solutions

F. Recommendation

V. Implementation Plan

Managing technical risks and competition mainly demonstrates the alignment

between a firm's skills and its strategic decisions. According to Hitt et al. (2009),

when a company is faced with the possibility of making a permanent investment

amidst unknown future conditions, there is a benefit in deferring the decision. Using

the natural options strategy within General Electric (GE) enhances the assessment of

investment profitability by incorporating the ability to strategically delay some

choices, hence introducing a crucial element of flexibility. Due to price variations and

a worldwide crisis inside the complex system, the GE energy industry has

experienced supply constraints and a lack of profitability. Therefore, the optimal

strategic decision is to capitalize on its distribution channels, as the decrease in

market conditions is the primary cause of financial detriment. In a capital-intensive

enterprise, the Chief Executive Officer (CEO) can terminate the project to assess the

salvage value, which is relevant for five years. At that point, GE Energy can either

continue the development process or discontinue the project. However, the primary

decision is to proceed with the development.

VI. Potential Risks and Contingencies

According to Hitt et.al (2009), it is recommended that enterprises and

organizations should align their design structures with their key competencies rather

than relying solely on business components. The use of this principle inside General

Electric (GE) is evident in the multifarious reformation of the organization's structure.

Previously characterized by a highly integrated leadership, GE has separated into

distinct groups, resulting in improved cross-based integration. Implementing this

particular organizational model significantly enhanced GE's market worth, which

increased from an estimated twelve billion to thirty-seven billion over twenty-five

years. Moreover, Immelt modified the organizational structure, transitioning it from

focusing on achieving results to a very intricate and diversified structure that may be

seen as disruptive and perhaps hindering management performance evaluation. This

strategic approach aids in gaining more excellent proximity to the business

framework.

The primary objective of Welch was to implement a comprehensive restructuring

strategy to attain a leading position within the highly competitive industry.

Consequently, he was willing to adapt and anticipated that his colleagues would

emulate his behavior. He actively motivated his team to strive for excellence above

the highest standard. Various management structures for reporting were utilized

throughout the transformation process. In addition to the argument above, it is worth

noting that Welch implemented measures to cultivate a corporate culture that

embodied self-assurance, efficiency, and straightforwardness, primarily by promoting

effective communication channels. To prolong his dedication, he initiated

 implementing a program called "Work Out," which fostered communication between

employees and supervisors.

VII. Evaluation and Measurement

De Andrés et al. (2012) assert that by developing an effective strategic planning

process using the Return on Assets (ROA) framework, managers are prompted to

critically analyze the ramifications of uncertainty and adopt adequate solutions to

effectively navigate potential delays. The argument primarily emphasizes the

importance of implementing significant changes to achieve positive outcomes, rather

than relying on interconnected diversity inside the organization to expand

development opportunities in the future. Distinct diversification is considered one of

the pillars of organization design within GE. It is characterized by a relationship to

return on investment (RO), where investment prospects are based on previous

developments before making investment decisions. This approach facilitates the

expansion of the firm's portfolio. The expansion potential of operations inside

General Electric (GE) is a distinct segment that corresponds to the increase in the

value of a call option due to the utilization of current resources and the capacity to

transfer operational skills to various sectors (Kogut & Kulatilaka, 2001).

VIII. Conclusion

In simple terms, this research paper has provided a comprehensive examination of

the GE Case study, which demonstrates that the enormous transformation that

occurred inside the GE organization was a positive development. However, in order

 for the efforts to be completely successful, it will be necessary to make use of

unprecedented methods and to reorganize the structure of the firm as it now stands.

This will make it easier for communication, debate, and unilateral constructiveness to

take place across the whole company. GE's core skills and resources served as the

primary inspiration for the primary focus, which was developed to assist core

competitiveness. Because to Jack Welch's efforts when he was CEO of the firm, the

company has become more responsive, ultimately profitable, productive, and agile as

a result of this evaluation. These are crucial implications of the long-lasting influence

that has been left for others to copy and accomplish more for the company.

IX. References

Bartlett, C.A., & Wozny, M. (2005). GE's two-decade transformation: Jack

Welch'sLeadership. Harvard Business School

De Andrés, P., De La Fuente, G., & Velasco, P. (2012). Tackling the Corporate

Diversification– Value Puzzle using the Real Options' Approach

Hitt, M. A., Ireland, R. D., & Hoskisson, R. A. (2009). Strategic management:

competitiveness and Globalization: Concepts and Cases. Cengage

Learning. OH: Cincinnati.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. A. (2009). Strategic management:

competitiveness and Globalization: Concepts and Cases. Cengage

Learning. OH: Cincinnati.

Kogut, B., & Kulatilaka, N. (2001). Capabilities as real options. Organization

Science, 12(6), 744-758.