Transcript THE LEADERSHIP STYLE OF JACK WELCH

THE LEADERSHIP STYLE
OF JACK WELCH
Group 5
Fromen Bensing
Ruel Caisip
Caesar tongo
John Francis "Jack" Welch, Jr.
Born November 19, 1935 was CEO of General Electric
between 1981 and 2001. He remains a highly-regarded
figure in business circles due to his innovative
management strategies and leadership style.
Who is he? And why do we
need to know?
• At age 45 became the youngest ever CEO of GE.
 A prominent model of business leadership in the
resurgent US economy of the 1990’s
 Led his company through one of the most revolutionary
and far-reaching changes ever witnessed in modern
business history. Under Welch’s leadership, GE rose to
be ranked No. 1 among the world’s most valuable
companies based on a combination of revenues,
profits, market value, and assets.
 Increased stock price of GE shares by 1,155% from
1982 to 1997
 Described by Business Week magazine as the “Gold
Standard” against which other CEO’s are measured
What he did at GE
 Quickly pioneered continuous restructuring,
process streamlining and employee downsizing
 Trimmed GE’s workforce from 412,00 to
229,000
 Sold $12B low profit businesses but acquired
$26B new and competitive businesses
 In the early 1980s, GE had about $25 billion in
sales and profits of $1.5 billion
 In 1997, GE posted a phenomenal net income
of $8.20 billion on revenues of $90.8 billion
On the very first day he
became CEO…
A decade from now we would like General Electric to be
perceived as a unique, high-spirited, entrepreneurial
enterprise…a company known around the world for its
unmatched level of excellence. We want General Electric to
be the MOST PROFITABLE, HIGHLY DIVERSIFIED
COMPANY ON EARTH, with world-quality leadership in
every one of its product lines.
The winners in this slow-growth environment will be
those who search out and participate in the real growth
industries and insist upon being number one or number
two in every business they are in - the number one or two
leanest, lowest-cost, worldwide producers of quality goods
and services or those who have a clear technological edge,
a clear advantage in a market niche.
The Six Rules Jack Welch
Lives By
 Control your Destiny or Someone else will
 Face reality as it is, not as it was or as you
wish it were
 Be candid with everyone
 Don’t manage lead
 Change before you have to
 If you have don’t have competitive advantage,
don’t compete
Pioneering works
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Business reengineering
Boundaryless organization
Leading others to lead themselves
Employee empowerment
Competitive advantage
Downsizing or rightsizing
The other view..
 To him Human beings are comparable to commodities.
Hence, adherence to values such as mercy, loyalty,
compassion or equity was marginalized at GE
 Massive employee dismissals led to the common
perceptions within the company that workers were
expendable
 One executive confided that going of to work in the
morning at GE was like going of to war
 The push for success cultivated an institutional culture
that was susceptible to institutional misconduct
 GE corporate meetings were legendary for their
severity and the demeaning, ridiculing and humiliating
of the corporate leadership by the BOSS
The other view..
Some people believe that Welch is given too
much credit for GE's success. They contend that
individual managers are responsible for the
company's success.
 Gary C Wendt led GE capital to contribute
nearly 40% of the company's total earnings
 Robert C Wright worked to effect a turnaround at
NBC, leading it to five years of double-digit
earnings and the No.1 position in prime time
ratings.
 GE enjoys a 16% annual earnings growth
during the tenure of his predecessor, Reginald
H. Jones.
Leadership Style
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FOR
Transformational
Charismatic
Collaborative
Empowering
Results oriented
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AGAINST
Narcissistic
Excessive
Inhumane
Confrontational
Teleopathic
More contrasting views
Love him or hate him, there is no denying that Jack
Welch is an exceptional manager and improved the
General Electric company dramatically. His management
ideas and leadership skills are both admired by business
commentators and imitated by business leaders
worldwide.
Jack Welch’s management system is morally
questionable. Fortunately, Welch’s personal influence has
declined some in the past couple of years. Some
business commentators have questioned the source of
G.E.’s vaunted profitability, while others observe that
many of Welch’s epigones are not producing the
anticipated results when they have directed other
corporations.
References
 Thompson, P. M. (2004). The stunted vocation:
Analysis of Jack Welch's vision of business leadership.
Review of Business, 25 (1), 45-56. Retrieved March
22, 2004, from ProQuest database.
 Strohmeier, B. R. (1998). Resolving Conflict at the
Highest Corporate Level: Literature Review on the
Leadership Style and Tactics of General Electric CEO
Jack Welch. PPG Industries, Inc. Journal of
Management Systems, 10(3) 73-90. Retrieved June
14, 2006, from AT&T Personal web page of Brian R.
Strohmeier. http://home.att.net/~strohmeier/welch.PDF
 Jack Welch’s Profile on
http://www.amcantalent.ca/speakers.htm