Abstract

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. 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 mid 2006.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the relationship between leadership and growth in large and diversified companies. Study the effects of a change in leadership on company strategy and culture. Compare the leadership styles of two leaders of a large business conglomerate and to

Keywords

Jack Welch, Jeffrey Immelt, General Electric Company, Leadership, Strategy, Culture, Strategic Planning, Matrix Corporate Planning System, Six Sigma, Honeywell Inc., Motorola, AlliedSignal, Number One Number Two, 4Es of Leadership, Corporate Restructuring, Portfolio Restructuring