Q1 Challenges faced by Welch in 1981:Us economy was in recession High unemployment rate Welch inherited a big company having

10 groups , 46 division and 109 departments which very difficult to manage and aiming at best performance. Very difficult for GE managers to achieve top position in recessionary environment under constant and strong competition from Japanese competitors Major strategies adopted by Welch to kick start the change: Fix, sell or close strategy: Welch set the standard for each business to become the 1 or 2 position holder or disengage. Businesses were categorized into core (with priority of reinvesting in productivity and quality), high technology( stay on the leading edge by investing in R&D),and services (required to add outstanding people and make continuous acquisitions) Scores of business were sold including air conditioning, house wares and coal mining because it was very difficult to get top position under recessionary environment it freed 11 billion dollar of capital Company made 370 acquisitions Welch focused at disciplined de staffing resulting into reduction of cost to company welch mainly focused on how does he add value and how does he make people effective and competitive? Welch replaced laborious strategic planning system of GE replaced it with the real time planning build around a five page strategy play book each business was revolving around five questions: Current market dynamics Competitors key recent activities GE business response Greatest competitive threat over next 3 years

Welch reduced number of hierarchical level from 9 to 4 and ensured all business reported directly to him Welch also removed different layers of employees thus by de staffing, delayering resulted into increase in operating profit from 1.6 billion dollar to 2.4 billion dollar For drastic restructuring Welch got name neutron jack

Q2 What is he trying to achieve while implementing a series of strategic initiatives in late 1980s and early 1990s? And- Welch tried to achieve following by implementing strategic initiatives:Sustain high productivity with the help of cultural change. He introduced management style based on openness, candor and facing realty He tried to get organizational culture characterized by speed, simplicity, and self confidence. Welch tried to create a culture of a company where each one is everyone had a voice. Employees could not only speak their mind but also get immediate responses their ideas. Tried to reduce bureaucracy and helped participation of each and employees in decision making Welch tried to provide momentum to internationalization effort by making paolo fresco as head of international operations. Fresco became the locator and champion of new opportunities by initiating jvs and acquiring different companies Welch took advantage of European economic downturn and invested 17.5 billion dollar between 1989 and 1995 on new plant facilities and acquisitions Leadership development:Welch tried to spent 70% of the time on people issues most of that teaching and developing others. Welch formulated different training and development plan for employees he also frame worked the best succession plan Focus on developing those leaders who delivers on commitments and shares the values of the company. 360 degree feedback where each employees were judged on five point scale by superior, subordinates, peers etc. Boundryless behavior: It is characterized by open ended anti parochial environment, friendly towards seeking and sharing of new ideas regardless of origin of employees. Boundryless culture removed barriers among varios departments say for marketing , sales , manufacturing, engineering etc Achieving impossible:Stretch targets are those targets which are difficult to achieve but can be achieved. It gave confidence that we can do things faster. Services business:Welch tried to reduce GE dependence on traditional industrial products. GE acquired other non traditional services also like different financial services. Welch tried to reduce effect of slowing growth of its products by supplementing with value added services. GE explored in medical equipment services.

Q4 transformational leadership style