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Sunday, May 8, 2011

“From the Welch way”



Welch management skill:
     As CEO of GE, Mr. Welch's management skills became almost legendary. He had little time for bureaucracy and archaic business ways. Managers were given free reign as long as they followed the GE ethic of constant change and striving to do better. He ran GE like a small dynamic business able to change as opportunities arose or when a business became unprofitable.
   GE saw great growth and expansion under Mr. Welch's leadership. Through streamlining operations, acquiring new businesses, and ensuring that each business under the GE umbrella was one of the best in its field the company was able to expand dramatically from 1981 to 2001.

“Win is Great not just good, when we win we have time to invest and also not just to buy our taxes but we can fined time and money for charities and other social activities”. …. J. Welch
Who can be leader?
From Welch point of view and his experience, the first essential trait of leadership is positive energy – the capacity to go-go-go with healthy vigor and an upbeat attitude through good times and bad. The second is the ability to energize others, releasing their positive energy, to take any hill. The third trait is edge – the ability to make tough calls, to say yes or no, not maybe. The fourth trait is the talent to execute – very simply, get things done. Fifth and finally, leaders have passion. They care deeply. They sweat; they believe.
In Organization behavior
He doesn’t like more layer respect as he said “in a world where faster is not just better but necessary, layers slow everything down. Take decision-making. The more layers, the more people who have to thump their rubber stamp. The more PowerPoint presentations to be made, to bosses and bosses’ bosses before the rubber stamp. Or take communicating change. Layers make that process—hard enough as it is—like that children’s whispering game, telephone.”
An effective performance appraisal system, he said, relies not only on honest feedback but also on meaningful differentiation among employees. At GE, he put these principles into action by implementing a forced ranking system that divided employees into three distinct segments: the top 20 percent of performers, the middle 70 percent, and the bottom 10 percent. Even though GE's "20-70-10" system—which methodically manages out the bottom 10 percent of employees each year—has always been controversial, Welch emphatically defended it.

"You should take the top 20 percent of your employees and make them feel loved," Welch advised. "Take the middle 70 percent and tell them what they need to do to get into the top 20 percent." Managing out the bottom 10 percent of performers is necessary not only for the organization's continued success but also for the sake of employees affected by the rigorous appraisal system. "People need to know where they stand," Welch said. "Failing to differentiate among employees—and holding on to bottom-tier performers—is actually the cruelest form of management there is."
"Excite people. Send them to training. The day you become a leader, your job is to take people who are already great and make them unbelievable."
Welch and the corporate social responsibilities:

What is a corporate social responsibility?
Corporate social responsibility (CSR), also known as corporate responsibility, corporate conscience, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance, is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of
The CSR definition used by Business for Social Responsibility is: "Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business


Does GE under Welch illustrate view of corporate social responsibility?
“The main social responsibility for a company is to win.
A business can only benefit its community, consumers and employees by doing well, or being profitable, whichever way you articulate that. But that one line provides the perfect ammunition for the vast majority of executives who’d rather implement business ideas that promise instant returns, instead of ideas that bring a long-term return on investment.
“We played business like it was a sport,” Welch said of his philosophy heading up GE from 1981 to 2001. “You make a game of it; you field the best team and weed out the weakest. The weeds you’ve got to pull out if you’re going to build a beautiful garden.”

Welch has also received criticism over the years for an apparent lack of compassion for the middle class and working class. By his actions during acquisitions and wholesale shutdowns of GE business units Welch proved that his technique of only keeping the units your company is "good" at you can maximize ROI for the short term.  This however may prove detrimental to the long-term prospects of the company, only time will tell.
The way to social responsibilities is near to Friedman’s view that only social responsibilities are to increase profit while obeying the law. Stake holders and Employees who is first; an issue for Welch
STANFORD GRADUATE SCHOOL OF BUSINESS—According to Jack Welch, companies that develop extraordinary products and services do more than gain market share—they represent the very foundation of society. "Winning companies are the only things that matter—without them, nothing else would work," the former chairman and chief executive officer of General Electric told Dean Robert Joss on April 27.
, Welch’s history at GE is already well documented. His cutthroat style and “eyes on the money” philosophy is routinely booed and praised by members of the corporate world.  He has utilized a very human process to change management to brief through GE's vast organization. Having respect for the individual as a pivotal force in organizational change, Welch created a model of exceptional performance every corporate leader can learn from.
Concepts:
The Welch strategy which is win to bee great, and only win part of your company stand over and shutdown others loose is to trend quickly and act for gain profit, more profit could be a way for CSR and charities organization and helping the society by opining new chances for work and also help schools and governments for more good life
The Welch pressure could be applied for all companies and globalization, the companies that want to raise and grow in the market by looking for more profited should work for win



Resources

2.            The interesting demise of the legend of Jack Welch
3.            An Article from Business Respect, Issue Number 39, dated 22 Sep 2002
By Millen Baker

6.            You could read about Mr. Welch's ideas on his website, www.welchway.com.

7.             www.ge.com
8.            Than Book

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