GES TWO DECADE

TRANSFORMATION:
CASE ANALYSIS
SECTION 3 GROUP 12
FT183004 ABHISHEK SHUKLA
FT183033 GOVIND RAJ
FT183034 HARSIMRAN PREET SINGH
FT183035 HRITUPARNO DEB
FT183099 SWAPNIL SRIVASTAVA
FT183104 VANESSA J VADASSERY
JACK WELCH

Jack Welch took over as the CEO of GE in 1981

Nick named as Neutron Jack for his drastic restructuring in 80s

CHALLENGES FACED IN 1981:

US economy was in recession
High interest rate and strong dollar
Highest unemployment rate since depression
GES RESTRUCTURING 1980S
Jack Welchs Objective: Being #1 or #2 through the Three circle vision
Business categorization: Core, high technology and services

Fix , sell or close uncompetitive business sold more than 200 businesses

Replaced the strategic planning system with real-time planning

Downsizing, de-staffing, de-layering during 1981 to 1988

Eliminated 59,290 salaried & 64,160 hourly positions

Hierarchical levels reduced from 9 to 4

GES SECOND STAGE- LATE 1980S
Objective:
Employees should have the freedom to be creative and have a sense of accomplishment

Work- Out
Eliminate unnecessary bureaucratic work
Managers make on-the-spot decisions about proposals
Productivity increased by 4% in 1988-1992

Best Practices
Attaining higher productivity by learning from other companies
Develop effective processes, performance measure through customer satisfaction etc.
GES SECOND STAGE- LATE 1980S (CONTD)
Going Global:
Strive to become #1 or #2 in the global market
Involved in International deals: Joint venture with Robert-Bosch, partnership with
Toshiba, acquisition of Sovac etc.
Investments and acquisitions in Europe, Asia, Mexico etc.
Developing Leaders:
Crotonville management development for leaders to align with the vision and
culture at GE
Performance of top level managers were rated on the extent to which they lived
GE values
Eliminate Type-4 managers and introduction of 360 Feedback process
THE THIRD WAVE 1990S
Boundary less Behaviour:
Focus on creating integrated diversity
Remove barriers across all sectors, no distinction between domestic and foreign
operations, ignore group labels
Learning from post acquisition lessons- integration programs were completed within
100 days

Stretch goals: Included in GEs culture helped get closer to impossible targets

Services:
In 1995, nearly 60% revenue came from services
In 1996, GEs services business grew faster than the product business
VALUE ADD INITIAVES BY WELCH

Six Sigma Quality Initiative:

Initially GEs quality rates > 10,000 times six sigma levels
Invested $500 million and got returns of $750 million over the investment

A Players with 4 E-s:

Improved quality of human resources
A Players had vision, leadership, energy and courage
4 Es- energy, energize others, edge and execution
CONCLUSION
Jack Welch was the Bell weather of management changes for businesses in America
GE generated 23% annual shareholder return in his two decades leading GE
Started initiatives like Bell curve, 360 degree feedback and stretch targets
He always saw an opportunity in global changes .e.g. introduction of dyb, went into
markets that were falling

Introduced 4 strategic initiatives:

Globalization
Services
Six-Sigma
E-Business