Case Study: Ge & Jack Welch

1. Which organization level would you place GE strategy in?

GE’s strategy is definitely a CORPORATE STRATEGY. It’s a holistic and global strategy which takes into consideration every single stakeholder there in order to make the Company GROW.

1. Why did managers decide to strongly diversify the business? You must consider that at that time the U.S. were in the midst of a significant recession with high interest rates and a strong dollar difficulting exports.

The first step was to eliminate the business lines with the fewest profits, mainly electronics. The second step was to diversify the existing lines of business in order to share and minimize risks.

1. Do you think it was a good idea to focus on the services and set aside the manufacture of electronics?

It was a good idea. It was a very ambitious and risky idea but it came out to be great. Most of people/companies never implement changes when things are going well. All lines of business in GE were making money, but for Jack Welch it was just not enough. He wanted to GROW and to create the most profitable company in the world and yes, he succeeded.

On the other hand, US crisis was very obvious at the time and it became especially hard to export manufacture. It was an intelligent idea to focus on services.

1. What do you think was the key to the implementation of the strategy of GE?

I think the key element to the implementation of the strategy was Jack Welch’s ability to manage the human factor. His self-confidence and intelligence created great energy and drew employees to accomplish their goals. He cut down the amount of layers of management to allow more contact between the top management and the bottom of the pyramid.

1. Explain what CRONTONVILLE is. Would you like to study there? Explain whether this kind of initiative is an American company thing or is it an international phenomenon.

CRONTONVILLE is a corporate learning campus. It’s like a university, but it was created by GE, a private company. It would be interesting to study there, in terms of experience and the practical teaching model they probably use. I guess it started as an American thing (like most of these things), but now it is definitely an international well-know phenomenon.

1. Do you think it was necessary so much noise for the succession matter? Was it a good idea choosing Jeff Immelt as a CEO? Find on internet information about the company’s strategy adopted to overcome the crisis. Explain if this is a radical or an evolutionary change

I don’t think it’s important to debate if it was a good idea to make noise about Jack Welch’s replacement. Whether it was a good idea or not, GE is one of the most important companies in the world, so any big changes within the company will be spread all over the news.