The last decade has witnessed the rise of some very charismatic leaders. One of them, Jack Welch, CEO of General Electric (GE) from 1981 to 2001, was among the most admired and respected leaders. Named in 1999 by the Fortune magazine as ‘Manager of the century', Jack Welch was more than a good manager with impeccable knowledge and skills; he was also considered as a great leader. He had vision and a real passion to achieve his goals, but more importantly, he had the ‘ability' to lead his team. All this allowed Jack Welch to succeed in his profession by injecting enthusiasm and energy into his team.
In this paper, we'll analyze the different management and leadership theories. We'll try to highlight the main differences and characteristics of a transformational leader in comparison to a transactional one. Furthermore, we'll apply such theories to Jack Welch's leadership and try to analyze his leadership style and determine his approach towards General Electric.
[...] This type of structure delegation is very popular. The different steps in delegation are presented in the chart below. According to Andrew DuBrin, a well-known author of leadership and management books, “Flat structure with only one or two levels of management emphasizes a decentralized approach to management that encourages high employee involvement in decision making process. The purpose of this structure is to create independent small businesses or enterprises that can rapidly respond to customers' needs or changes in the business environment.” (DuBrin, J., Andrew, 2006) In contrast, bureaucratic organizations are driven by a well-established level of management. [...]
[...] Welch had established a set of ‘4E' to maintain player' and weeded out unsuitable persons; it may seem cruel but it really worked. Welch's Management Strategies Welch was a man with a strong vision that reflected in all the business practices models that we mentioned earlier. During his stint at GE, he followed an important rhythm of changes step by step in order to reinforce GE's growth. Jack Welch never followed his predecessors' thoughts: he saw things in another light, for instance, he pushed GE to globalize its activities in the late 1980s, during a time of overseas market slump. [...]
[...] According to him, there are two types of changes: Organizational Development, which is based on the assumption that it is possible to align corporate objectives with the individual employees' objectives. Re-engineering is known as corporate transformation or business transformation. It is the more radical form of management change, since it challenges all aspects of processes or structures that have evolved over time. Leadership Theories Who is a leader? Various definitions from well-known authors Before analyzing the two different leadership styles, it is important to have an overview of the different definitions of leadership as proposed by well-known authors. [...]
[...] These technology investments have greatly increased GE's relationship with customers, in 1995, GE realized 60% of its revenue from service business. Moreover, Welch implemented the Six Sigma program in 1995: Six Sigma simply means a measure of quality. "Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process from manufacturing to transactional and from product to service. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma opportunity is then the total quantity of chances for a defect. [...]
[...] What we can learn from Jack Welch is his ability to face reality. I think a vital part of being a good business leader is the ability to acknowledge the reality of the situation and change accordingly. A leader should have a strong vision of business; winning businesses and satisfying customers can provide the job security. A leader should be able to tackle any impediments that slow down the company or endangers its growth. Bureaucracy is the death of companies; people should not talk about numbers or should focus too much on the numbers. [...]
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