How Jack Welch Transforms Businesses Successfully - Research Paper Example

How Jack Welch Transforms Businesses Successfully Introduction John Francis Welch, Jr (Jack Welch), the former CEO of General Electronic (GE) Company, is often regarded as one of the superior organizational leaders whose role had been quite imperative and prominent since the emergence of rapid growth of the global trade revolution. Jack Welch is also known as one of the successful as well as effective leaders who contributed his tremendous efforts towards impressive organizational developments. He has been with the GE since 1960 when the market capitalization of the company was around $12 billion. With his leadership qualities, Jack Welch gained the fame of being the youngest CEO in the history of GE in 1981. Contextually, his continuous efforts as well as decent leadership quality played a major role in guiding GE into one of the most admired organizations valued for approximately $500 billion being recognized as one of the sustainable brands across the globe (Bartlett & Wozny, 2005). With respect to the leadership qualities possessed by Jack Welch and enduring motivational efforts behind his achievements, this essay intends to highlight the techniques employed by Jack Welch to yield an impressive growth of GE. In other words, the prime aim of the essay is to present a comprehensive understanding of how Jack Welch had transformed or rather guided the business operations of GE towards success. Leadership Quality Possessed by Jack Welch Owing to the continuously increasing significance of leadership within an organizational context, it has emerged as one of the major considerations of a business growth and sustainability. It is believed in this regard that an effective leadership quality can significantly boost the performance of each individual towards the determined organizational objectives facilitating shared values and common principles as well as interests. On the contrary, it is often argued that the absence of effective leadership skills among the decision makers of any organization can lead to a dramatic decline of its overall performances in the long-run (Doh & Stumph, 2005). With this concern, the leadership skills of Jack Welch can be identified with due consideration towards the then external environment of GE witnessing various challenging tasks fundamentally owing to the changing scenario of the global market. According to the prevailing conditions of GE, it is also regarded as one of the leading brands and sustainable organizations with a leading position among the top 10 brands across the different regions of the world. Notably, majority of the achievements attained by GE was during the later period of Jack Welch’s leadership which certainly fuels up the arguments emphasizing on the contribution made by him as a CEO towards the organizational accomplishments (Dulberg, Paschen, Sprindis & Stawski, n.d.). For instance, during his tenure, GE was able to attain the benefits of rapidly increasing revenues offering greater value to its shareholders compared to other business leaders across the global market. Stating precisely, the net worth of market capitalization of GE witnessed a steep increase from USD 12000 million during the year of 1981 (the year when Jack Welch was promoted as the CEO) to USD 500,000 million in the year 2001(when Jack Welch retired from his CEO position). A few of the strategies which Jack Welch had been considering during his tenure in GE, accounted the realignment of the business goals as well as the reduction of the motivational gaps existing within the higher level management and the other hierarchies of the organizational structure. He also played a major role by motivating his managers to extend their productivity and innovation capabilities to previously unknown levels gaining better competitive advantages over its international competitors. The leadership skills of Jack Welch were highly focused on enhancing the efficiency in the operational decision making process by revitalizing the communication process engaging every individual within the organization. Therefore, it can be affirmed that the leadership qualities possessed by Jack Welch were significantly focused on increasing the self-confidence of his employees with due consideration to the fact that employee satisfaction and their productivity are interdependent (Dulberg, Paschen, Sprindis & Stawski, n.d.). For instance, under the leadership of Jack Welch, the managers of the organization had broad liberty regarding the assembling GE units implementing an entrepreneurial approach. The motivation approaches that were considered by Jack Welch involved three major areas, Setting goals and transforming the organization on a corporate height in order to achieve competitive advantages Empower employees in various levels of the organization Communicating his innovative and effective goals as well as visions throughout the organizational structure by offering extensive training facilities to its employees (Froud, Johal, Leaver & Williams, 2005) Business Strategies of Jack Welch During the two decades of Jack Welch’s leadership, the transformation of strategic goals as well as its leadership position, a dramatic development of the overall process in GE had been witnessed. It has been observed in this regard that significant changes in the overall organizational process practiced in GE took place since the early 1980s and is still continuing. Soon after taking the responsibility as the new CEO of GE in the year 1981, Jack Welch witnessed the economic condition of US in a downturn which had been suffering from higher interest rates, deepening dollar value along with increasing unemployment rates. In order to perform leverage efforts in the GE’s diverse portfolio of its international business operations, Jack Welch developed precise strategies following the reconsideration of the organizational goals and objectives setting certain number of changes aimed at the drastic reform the organization over the next five years in accordance to the need of competition and sustainability criteria apparent in the external business environment (Bartlett & Wozny, 2005). Hence, the virtues of precise objectives and comprehensive as well as systematic representation of the organizational strategies, as described by Jack Welch, rendered immense support to the performances of GE in order to acquire a larger proportion of the global market-share from its 14 different business operations within the international electronic industry. As a result, during the year 1988, the organization achieved revenue amounting to USD 50 billion indicating a significant increase in terms of its profitability along with a net income of USD 3.4 billion in the same year. The company was also able to retain 300,000 employees which in turn contributed to its sustainability by a significant extent (Tichy & Charan, 2012). It is worth mentioning in this regard that the strategic redirection of GE started taking shape during the end of 1986. In this year, the business strategies implemented by Jack Welch was centralized in two fundamental objectives. Initially, he used to focus on a company-wide drive in order to recognize and consequently eliminate unproductive works to energize the business objectives for each individual within the organization. According to his strategy, the leaner form of business approach can be more beneficial in order to enhance the employee performances in terms of reporting, reviewing along with forecasting and budgeting which are likely to be accomplished within a short span of time. Moreover, the strategy introduced by Jack Welch was also focused towards developing procedures concentrated on increasing the pace of decision making process, movement or rather the channelization of ideas and information throughout every division of the organization, providing effective and quick feedback processes amid the employees as well as amid the customers, along with appraising and rewarding each individual on quality deliverance with special concern towards their deciphered behavior in terms of honesty, candor, self-possession and confidence levels (Tichy & Charan, 2012). Again, the greater significance of Jack Welch in GE can be considered as a transformation of attitudes, self-enthusiasm along with promoting creativity at each level within the organization. The ultimate goal of Jack Welch was to build an organization that can provide the advantages to its employees as well its customers at the global scale along with diversity exclusive of inflexibility of bureaucratic controls, hierarchical authorities as well as managerial power to increase self-perpetuation. Moreover, the business strategy of Jack Welch’s was highly focused towards increasing the transformation level in various stages including the technical systems as well as people engaged with its entire operational processes (Tichy & Charan, 2012). The corporate strategy of Jack Welch was also deliberately focused on the efficiency and performances of each employee of GE. During the period of his 20 years as the CEO of the company, he persistently drove his workforces according to their capabilities, encouraging subordinates in various levels of the organization to embrace determined objectives and continuously augment their performances. Jack Welch was also well-known for making difficult decisions along with resolving conflicts in various situations in accordance to the various processes of GE (Bucifal, 2009). Conclusion From an overall perspective, it can be argued that organizational success factors depend largely on the decisions taken by the leaders which in turn depicts that the leadership qualities possessed by these decision makers play a fundamental role in confirming organizational efficiencies. For instance, the strategies implemented by Jack Welch during his leadership era focused on earning sustainable growth where his management philosophy can be identified to emphasize principally on the augmentation of employee productivity with the belief that it would further contribute to the overall organizational efficiencies. Apparently, these values considered by Jack Welch reflected not only within GE’s operational processes and systems, but also within its products and/or services which were instigated through the company’s simple and highly functional designs. During the tenure of Jack Welch in GE, the stakeholders of the organization were consistently benefited from his legendary leadership. Conclusively, it can be affirmed that Jack Welch established his capability to articulate as well convey his values with notable dedication and clarity throughout the various levels of the organization. References Bartlett, C. A. & Wozny, M. (2005). GE's two-decade transformation: Jack Welch's leadership. Retrieved from http://www.scribd.com/doc/66146668/01-Jack-Welchs-Leadership Bucifal, S. (2009). Corporate strategy analysis: General Electric Co. (1981–present). Retrieved from http://www.uni-erfurt.de/fileadmin/public-docs/Mikrooekonomie/Vorlesungsmaterialien/Management/Strategy%20GE.pdf Doh, J. P. & Stumph, S. A. (2005). Handbook on responsible leadership and governance in global business. United Kingdom: Edward Elgar Publishing Limited. Dulberg, M. Paschen, J., Sprindis, S. & Stawski, S. (n.d.). Jack Welch and the motivation of GE. Retrieved from http://www.sstawski.com/download/GE.pdf Froud, J., Johal, S., Leaver, A. & Williams, K. (2005). General Electric: The conditions of success. Retrieved from http://www.cresc.ac.uk/sites/default/files/wp5.pdf Tichy, N. & Charan, R. (2012). Speed, Simplicity, Self-Confidence: An Interview with Jack Welch. Retrieved from http://hbr.org/1989/09/speed-simplicity-self-confidence-an-interview-with-jack-welch/ar/1 Read More