Ge's Two Decade Transformation Case

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GE’s Two-Decade Transformation Case 1. How difficult a challenge did Welch face in 1981? How effectively did he take charge? Welch faced various challenges when he became the chairman and CEO of General Electric in April 1, 1981. His predecessor Reg Jones had left with a vast network comprising of 10 groups, 46 divisions, 190 departments, and 43 strategic business units, which Welch inherited. Reg Jones was also proclaimed as a management legend by the Wall Street Journal. During Reg’s CEO’ship, sales were doubled up to $22 billion and earnings grew fast. When Welch was made the chairman and CEO of GE, the US economy was not in its most stable state. With the economy in recession, high unemployment rates, and high interest rates proved very challenging for Welch to run GE. The challenges faced from inside the company were massive information and inefficient macro-business models. Amidst all the challenges, Welch took them on with a motto, which was to be “Better than the Best” (Bartlett & Wonzy, 2005). Welch took a stand to restructure the company and identified managers who would fit in areas that could assist to restructure the company, while other managers who did not bring value to the company were let go. By eliminating the sector level, about 123,450 jobs, and also eliminating addition of new jobs, Welch implemented lean and agile methodologies, as well as real-time-planning strategy. Welch also sold as many as 200 of the company’s businesses and also invested in others. The investment brought increased revenue and profits. Welch acquired over 370 businesses. 2. What was Welch’s objective in the series of initiatives he launched in the late 1980s and early 1990s? What was he trying to achieve in the round of changes he put in motion that period? Is there a logic or rationale supporting the change process? Welch had visions that in order for

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