Principles and Practice of Management

Case (20 Marks)

General Electric Company (GE) was a major conglomerate and one of the biggest companies in the world. One of the factors that was believed to be responsible for the company\’s steady growth for more than a century was its tradition of stable and long-term leadership. One of the most successful phases in GE\’s history began when Jack Welch became its CEO in 1981. Welch attempted to make GE one of the top companies in every segment in which it operated. He also supervised several acquisitions that added value to the business portfolio and was instrumental in creating a performance-oriented culture at the company. Welch retired in 2001 after 20 years at the helm. He was succeeded by Jeffrey Immelt, who was chosen by GE\’s board after a long and careful succession planning activity supervised by Welch himself. In September 2001, Jeffrey Immelt (Immelt) became the Chief Executive Officer (CEO) of the General Electric Company (GE). He succeeded Jack Welch (Welch), who was acknowledged as one of the most

successful CEOs in business history for his management of GE in the twenty years he headed the company (1981 to 2001). Welch studied chemical engineering at the University of Massachusetts, from where he graduated in 1957. He then moved to the University of Illinois, where he received his Master and Ph.D. in chemical engineering. Welch joined GE in 1960 as a junior engineer. After a year, Welch wanted to leave the company, unhappy with the bureaucratic culture of the company but was convinced by his superior to stay back… This case discusses the strategic and cultural changes at GE as a result of the change in leadership. It compares GE\’s strategy and operations under Welch, with those under Immelt. It also talks about the changes in the company\’s culture under Immelt. The case concludes with a discussion on the challenges facing Immelt, as of mid2006.

Answer the following question.

Q1. Discuss the relationship between leadership and growth in large and diversified companies.

Q2. Debate the effects of a change in leadership on company strategy and culture.

Q3. Compare the leadership styles of the two leaders in the above case.

Q4. Analyze the effectiveness of their styles.

 

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