Analysis Of Jack Welch

1044 Words5 Pages
Jack Welch joined General Electric in 1960 as a junior engineer. Although he threatened to leave the company soon after because of his personal conflict with the bureaucracy in the company; he was promoted to Vice President in 1972. In 1981, Welch became the youngest CEO of GE. Jack Welch is now regarded as one of the most successful business leaders of the century because of his business acumen, leadership abilities and charisma. He rearranged GE’s management and worked to streamline the company by changing the company’s organizational structure, motivating the management with his position power and trying to create an informal working environment for his employees rather than an unfriendly company with barriers to upper management. Welch’s management philosophy, which was later adopted at other large companies, helped GE to increase the company’s market value from $12 billion in 1981 to approximately $280 billion in 2001. When Jack Welch first began the implementation of his plans to change business at GE, he faced challenges and opposition from his employees. His biggest challenge was facing criticisms that his policies were too harsh like when he cut the bottom 10% of managers each year, reduced payrolls, and shut down line units that weren’t producing competitive products. Welch was a tough competitor because he wanted GE to be #1 or #2 in any industry that they were in and quickly cut the product lines that weren’t. Often he was called “Neutron Jack” because he was like a bomb that eliminated employees and yet kept buildings intact, indicating that some employees viewed the company as having a toxic organizational culture. But soon, his referent power grew because employees respected him more as the company became more successful. Welch didn’t just punish his employees for poor performance; he especially liked to reward employees for good performance and to
Open Document