General Electric History Lessons

General Electric History Analysis

Jack Welch has taken several innovative steps to reshape General Electric’s (GE) global strategy. They can be characterized by terms such as simplification, adaptability, and self-confidence. He focused the company’s resources and capacity on three sectors, namely “core manufacturing units such as lighting and locomotives, technology-intensive businesses, and services” (Tichy & Charan, 1989, p. 112). Welch made the reporting format and Corporate Executive Council meetings more down to earth and divided the corporation into 14 divisions (Tichy & Charan, 1989). He also fired ineffective and unwilling to change managers, otiose management lawyers, and low-skilled corporate staff (Tichy & Charan, 1989). Moreover, he introduced new corporate values, namely the desire to struggle, self-confidence, candor, openness, and open-mindedness (Tichy & Charan, 1989). Measurements are taken to accelerate many processes in the GE and developed the company’s adaptability. It also helped to pull GE’s locomotive sector out of the crisis in the 80s.

Personal Attitude towards Jack Welch

It is safe to say that Jack Welch is a significant figure in business history in the United States. As the youngest CEO in GE history, he was able to rebuild an entire company and take it to the top in the domestic and global markets (Gryta & Mann, 2018). I can say with certainty that I would work for him. Although newspaper and scholarly articles about GE and interviews with Welch provide detailed information about the reorganization processes that took place, they cannot give the first-hand experience that the company’s employees received back then. It could be a unique opportunity to learn the nuances of working in top corporations and develop workplace adaptability.

GE under Welch and Immelt

The problems Jeff Immelt faced during the 2008 economic crisis stem from the system Welch created. Towards the end of his career in GE, Welch relied heavily on GE Capital and GE shares. According to Gryta and Mann (2018), as of 2001, “much of those profits were coming from deep within Capital, not the company’s factories” (p. 3). Immelt just continued to develop this course of the company. It is also necessary to mention that Immelt “didn’t rein in the lending at Capital, which accounted for 38% of GE’s revenue in 2008” (Gryta & Mann, 2018, p. 3). However, at one time, Welch optimized GE’s organizational structure and innovated its management system. In contrast, Welch could not save the company in crisis by himself and had to seek financial assistance from the Federal Reserve.

John Flannery’s Shorty Tenure

There are several reasons why Flannery’s tenure as CEO of GE was short, namely fourteen months. As soon as he became the head of the GE, he almost immediately set himself up for many members of the GE Board (Gryta & Mann, 2018). Flannery also could not find a common language with shareholders and investors, which is why the GE stock dropped several times during his rule (Gryta & Mann, 2018). The primary reason is that he was inexperienced and still learning how to manage a corporation when it was already in a deep crisis. The fault lies with the GE Board as the company began to lose ground before Flannery and continued after.

Lessons Learned

GE history is an illustrative example of the rise and fall of a top corporation. It shows that companies must be adaptive and always ready for strategic changes. Even if a company is a leader in its industry, it must continuously transform to maintain its position. Systems tend to become obsolete over time, especially the business ones (Gryta & Mann, 2018). Perhaps in the future, GE will be able to revive and give professional economists a new reason to research.


Gryta, T., & Mann, T. (2018). GE powered the American century—Then it burned out. Wall Street Journal, 1-18.

Tichy, N., & Charan, R. (1989). Speed, simplicity, self-confidence: An interview with Jack Welch. Harvard Business Review, 67(5), 112-120.

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