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General Electric abbreviated as GE is a multinational corporation based in the United States of America. Thomas Edison founded the company in 1892 through merging of three companies. The companies were Edison General Electric's, Thomson-Houston Electric companies and Canadian General Electronics (Betsy, 2006). The company dealt with technology infrastructure, consumer and industrial, and capital finance. General Electric has approximately 223,000 employees in several countries. In 1900, GE launched an industrial research laboratory where domestic scientists introduced most of their products. General Electric's is the largest producer of electrical appliances, which are branded as General Electric and Hotpoint appliances.
Jack Welch was a graduate of University of Massachusetts Amherst when he attained a Bachelor of Science degree in chemical engineering. He became the chairperson and CEO of General Electric Company for 20 years between 1981 and 2001. He got employment in the company in 1960 as a junior chemical engineer in the plastic department in Pittsfield. It was in GE where he had decided to resign despite working in a friendly environment. Welch decided to retire and work in another company but Reuben Gutoff who worked with him but at a higher rank convinced him to stay because he recognized him as an asset to the company and also received a salary increment (Slater, 1999). In 1972, Welch received promotion as a vice president of GE and later became the vice chairperson in 1979. In 1981, he became the youngest CEO in GE's history at the age of 33 years being a successor of Reginald Holmes (Betsy, 2006).
When Jack Welch became the CEO General Electric was faced with a fundamental change. He decentralized the management of Reginald Jones but preserved the system of categorizing divisions according to their performance. Welch accentuated that great leaders should be energetic in the sense that they should have this mentality for the growth of their businesses (Carlson, 1991). The leaders should believe that business is simple, and should not make it look complicated. They should be ready to face reality, and should welcome change instead of fearing it. He highlighted that the leaders should eliminate bureaucracy that is removing the 'bossy attitude' portrayed by some managers. They should use their employees' ideas to improve their businesses and lastly they should determine the best ideas and use them.
He used two of his basic principle of management while working as General Electric CEO.The principles were, to embrace change rather than fearing it and the principle of acting like a leader not like a manager. Jack Welch put much emphasis on the principle of change because it was a reality in the business sectors (Business Week, 2009). Every day in the business environment there was the introduction of new products and competition. He always encouraged his colleagues on the need for change citing that even if the goal of success is still the same, the tools, and methods of arriving at those goals gradually changes. He applied the principle of not fearing change rather adopt it when he revolutionized General Electric. To improve the company's products and services Welch acquired RCA (Radio Corporation America), which was one of the largest Telecommunication Network and in 1987; he merged GE with Thomson Electric's. He was aware that it was not easy to accept change but he was not dissuaded because he knew it was the best chance to change General Electric's, he rather embraced it with both hands (Betsy, 2006). Welch had a viewpoint that winners were never afraid of change and he pitied losers who could not embrace it and allowed fear to overcome them.
In his principle of being a leader and not a manager, he always stated that managers should look for ideas and use them in their companies. He argued that some managers overlooked their management roles and introduced bureaucracy environment in their companies leading to their downfall (Carlson, 1991). Those managers were believers of the past where they were supposed to monitor, supervise, and control. The managers also did not give the employees a chance to give opinions or have a direct contact with them yet they were the producers of their products. Those managers believed in supervising, monitoring and controlling. Welch made sure that all GE's managers changed their management styles and adopted the company's values and cultures. Instead of junior and senior staff members communicating using memos, he encouraged communication
Other principles that he applied in his tenure as the CEO of GE were making the company behave like a small company instead of a big company. He removed the sectors and the groups that were termed as the second and the third levels of management. He believed that they choked the G.E machine (Business Week, 2009). In this new type of management, people could communicate effectively. Welch noted that there was lack of communication between management, marketing, and the consumers of GE. Welch knew that communication would improve the company's relations with the people working there. According to Slater, Welch knew that 27,000 employees could not absorb what he was communicating to them hence he had to repeat the ideas now and then until the employees understand (1999). This led to the creation of a program that took ten years to be completed referred to "WORK-OUT." The workout system was a motivation to the workers because they had the freedom to air their views to the managers (Betsy, 2006). The workers were also given an opportunity to be able to come up with ideas of solving problems. The main aim of this system was to eliminate the bossy mentality that had engulfed some managers. Welch was aware that if he got more involved with the employees the GE businesses would increase their productivity and ensure job security.
Jack Welch dreamt of increasing growth in the company that he pushed service and globalization to maximize the company's profits (Carlson, 1991). That was a great policy to follow according to his beliefs. According to United States Securities and Exchange Commission, during Welch's reign as the CEO, he increased growth in the capital services and through the acquisition of NBC (National Broadcasting Company) Telecommunication Network; the company's profit grew higher (2006). In financial service sector, the category grew up to twenty-seven businesses where nineteen of them doubled their income. Welch took advantage of globalization and saw it as a great opportunity, thus he purchased two businesses (Betsy, 2006). They were the aircraft engines and plastic to offer services to the international markets.
Employees and suppliers of GE were encourage to increase productivity and in the entire organization. It was in 1995 when Welch introduced an initiative referred to "SIXTH SIGMA." The purpose of this initiative was to improve quality control and initiative whose pioneers were the Motorola, Inc, and Allied signal Inc. The aim of the program was to cut cost and reduce errors and defects. According to Business Week, the concept also meant to increase revenue through the products and services sold to the consumers (2009). Welch adopted a fourth initiative e-business due to the emergence of the internet. He introduced a key to the growth of the company by introducing e-commerce. This was where the customers could purchase their goods and services online. Through this plan the company's revenue were doubled. His achievements were based on four steps that he called "MAIC." MAIC abbreviates of Measure, Analyze, Improve, and Control (Betsy, 2006). They became his driving force while dealing with his fellow workers. It was through the involvement of employees and suppliers that the speed and productivity in the company increased making the company increase its revenue in to two folds.
As he worked, he made sure that numbers were not discussed rather he emphasized the satisfaction of employees and suppliers and the cash flow. Sharing ideas was encouraged since information no matter how little it may seem, can be helpful. He did what no other CEO has ever done in the entire United States by eliminating all managers to avoid bureaucracy in the company (Carlson, 1991). He did this through downsizing, reconstruction, and rationalization and the operation was a success. His main aim was to make General Electric a competitive company even though the company seemed as well built.
In conclusion, General Electric is ranked one of the most successful companies in the world. As stated in the context it is a multinational company based in the United States of America. The company has employed approximately 223,000 employees in many countries. Its founder was Thomas Edison who merged three companies to form General Electric. It was in the era of Jack Wench that GE became more successful. He is a role model to many people in America due to his achievements in reinstating GE successfully in the years he was the CEO. It is evident that Welch had the will and power to change GE and promote it in to a success story. He wasted no time while executing his plans as he made GE more competitive without considering the limited number of employees, management, and business units. He revolutionized General Electric's by eliminating beaucratic managers. These managers could not contact with their juniors directly rather they used memos to communicate. He encouraged them to motivate their workers by listening to their opinions, ideas and use them in the growth of the company. It was in the 1980's when Welch turned his attention to his employees. He knew that the stability of the company was letting the workers take part in making decisions of the company to increase speed and productivity. Welch will be remembered as the most successful CEO of all times in the history of General Electric.