When Jack Welch succeeded General Electric (GE) as president in 1981, almost no one inside or outside the company thought that the company needed to be reorganized, because the company had always been a well-known company respected around the world. , GE's stock is still a blue-chip stock among the blue-chip stocks of listed companies. However, Welch believed that GE's director Xiao Gui Cao was good at adhering to the past, but bad at pioneering. When the external environment began to change drastically, many of GE's procedures and systems became outdated and embarrassed, and the company's managers gradually lost their usual confidence. If it continues to develop without any adjustments and reforms, this seemingly sound and prosperous company may suffer the same fate as Chrysler Automobile Company within 10 years.
Welch believes that a strong enterprise must have sustained growth in revenue and profits. The increase in revenue comes from a steady stream of new ideas and product innovation; the growth in profits comes from the continuous improvement of productivity. One cannot exist without the other. GE already has obstacles that prevent it from improving its earnings and profits. Threats to earnings growth are the company's highly developed bureaucracy and the corporate culture that underpins it. This organization used to be so efficient, but now it has become rigid and unable to adapt to environmental changes. It delays decision-making, ignores reactions, and suppresses knowledge, making GE unable to keep up with other companies in launching new products. For supervisors, mastering those red tapes has become an essential art and necessary condition for gaining official status and promotion to glory. As a result, many GE's outstanding managers spent most of their energy dealing with internal trivial matters instead of focusing on the real needs of customers and the opportunities and threats that environmental changes may bring to the company's development. In fact, while Japanese companies' productivity increased by 8% per year, General Electric's productivity increased by less than 1.5% per year.
Welch was determined to reform GE's current situation, even despite the opposition of most employees.
1． Business restructuring. Welch believed that all GE companies must be ranked first or second in their product markets. Companies that cannot meet this standard will be reorganized, closed or sold. To this end, he promoted the reorganization of General Electric's business areas, selling businesses worth $11 billion, including coal mining, semiconductors, and televisions; and buying new businesses worth $26 billion, including Kidder Investment Bank. , Employers Reinsurance Company and National Broadcasting Company (NBc) backstage boss RCA.
The purpose of business restructuring is actually to reorganize GE's profit sources so that the company can return shareholders and society with a higher rate of return.
2. Management restructuring. Welch insisted that GE managers must break through the constraints of traditional management concepts themselves and embrace the 21st century. Welch believes future success will belong to organizations that are "lean and agile." This kind of organization has a smooth and concise organizational structure, can quickly adapt to changes in the environment, is relatively democratic in spirit, and replaces rigid authoritative leadership with openness, frankness, and the use of different functions and hierarchies. But employees within the organization must learn to work as a team and take responsibility for themselves. GE should eliminate supervisory and management positions as much as possible and give employees more power to control their own work and take responsibility for their work, so that employees no longer accept orders from their parents like children, but interact with their superiors like adults or peers. .
Welch often asked operating managers to prepare a few simple slides to briefly describe the current operating status of each company. The content of the slides roughly includes the following basic questions:
What is the global competition like?
What have your competitors done in the past 3 years?
What are your corresponding measures during the same period?
How might they attack you in the future?
3． achievements brought about by the reform.
Before Welch took over, General Electric, along with Westinghouse Electric and AT&T, were so-called "GNP companies" because their profits grew at almost as much as the gross national product (GNP). The annual growth rate is 1.5 times, which is not easy for a company as large as General Electric. The full-year turnover in 1991 was US$60 billion and the profit was US$4.4 billion. In terms of earnings per share, a key indicator of the company's operating performance, it was as high as 20, which was much higher than the 12 of the top 500 large companies in the United States. In April 1992, GE's market capitalization exceeded US$67 billion, making it the third-largest company in the United States, much improved from the eleventh place in 1980. Except for Exxon and Philips Morris, American companies and foreign companies, except for Dutch Shell and Japan's NTT, are all behind. Based on a comprehensive evaluation of revenue, profits, market value and assets, "Happiness" magazine ranked General Electric as the most competitive company in the world.
1． The fundamental reason why Welch wants to reform General Electric Company is:
A. Use reforms to eliminate dissidents and consolidate your position as president.
B． The company's current performance is not good.
C. Improve the company's innovation capabilities, pioneering capabilities and adaptability to the environment.
D. There are three things a new official needs to do when he takes office. Failure to burn them is not enough to demonstrate his ability and establish his prestige.
2. Welch's decision to reorganize the business is:
A. Tactical decisions.
B． strategic decisions.
C. Programmed decision-making.
D. business decisions.
3． The starting point for General Electric's business restructuring is:
A. Improve profit margins and return on investment.
B． Avoid intense competition with other companies.
C. Reduce business risks.
D. Reduce staff and reduce wage costs.
4. Welch asked the company to "eliminate supervisory and management positions as much as possible and give employees more power to control their work and take responsibility for their work, so that employees no longer accept orders from their parents like children, but like adults or peers." Cooperate with your boss." What assumptions about human nature is his approach based on?
A. X hypothesis.
B． Y hypothesis.
C. Homo economicus hypothesis.
D. Employee assumption.
5. Based on the relevant information that can be identified in this case, General Electric Company is likely to adopt the following organizational structure:
A. Network organizational structure.
B． Matrix organizational structure.
C. Business unit system.
D. Functional system.
Reference answers: 1. C 2. B 3. A 4. B 5. C