Leadership in Organizations: A case study of Jack Welch, CEO, GE

This article discusses the leadership style of Jack Welch, CEO of GE, in the context of change management. It examines whether he was a transformational or transactional leader, the type of change he implemented, his characteristics as a leader of change, and his approach to surmounting opposition to change. It also applies Kotter's 8-stage model to Welch's change in GE.

Leadership in Organizations
A case study of Jack Welch, CEO, GE

Table of Contents
Introduction...........................................................................................................................................3
Q1) Is Jack Welch a transformational or transactional leader? Discussion on his demonstration of
the descriptions of either a transformational or transactional leader. Use case study examples
supporting your discussion................................................................................................................3
Q2) Did Jack Welch implement radical or incremental change at GE? Give case study examples in
support of your discussion. Why do you think he chose the approach?.............................................4
Q3) Use key characteristics of leaders accomplishing successful change projects to examine the
description of Welch as a leader of change. Utilise case study instances in support of your answer. 4
Q4......................................................................................................................................................5
a) Discussion of the ways that Welch used to surmount opposition to change during change
implementation within the GE culture. Use the case study examples to support your answer.......5
b) Compare this approach with his structural change implementation in GE when he first became
CEO...............................................................................................................................................5
Q5) Application of 8-stage model (Kotter) to Welch’s change in GE. Cite case study instances for
explanations in relation to the various phases of the model...............................................................6
Conclusion.............................................................................................................................................7
References.............................................................................................................................................8

Introduction
Leadership is a much-required trait of an individual who can either initiate change or
participate in change management programs within an organizational setting. In presence of
leadership, strategic arrangement, planning, and implementation become easy from an
organizational perspective. This article through the study of the case of Jack Welch gives an
insight into the facets of leadership in the context of change management within
organizations.
Q1) Is Jack Welch a transformational or transactional leader? Discussion on his
demonstration of the descriptions of either a transformational or transactional leader.
Use case study examples supporting your discussion
The case study suggests that the personality of Jack Welch resonates with a transactional
leader. Aspects of transactional leadership are more prominent in his personality trait and
leadership style.
Throughout the case study presence of leadership is fairly apparent and when it comes to
classification of such leadership in relation to Jack Welch then transactional leadership is
much evident from the functions carried out by Jack Welch. He took apart most of the
management that was earlier arranged by his predecessor in GE. Welch shortened inventory
for removing perceived inefficiency. He also cut back on payroll along with the closure of
units that happened to be monotonous. Welch laid off bottom ten percent of managers even
though of no apparent performance related issues. Top twenty percent managers were
rewarded by bonus and stocks by him. Welch expanded programs of stock options. Nine –
layer hierarchy of management was abolished by him and he further brought a sense of
informality to the firm (Beck & Cowan, 2014).
Examples of transactional leadership based on the case study
Jack Welch rewarded performers and closed monotonous units. He broke apart earlier
management. Jack Welch fired bottom ten percent of managers under him. He closed
factories and lowered the level of payroll. Moreover, Welch extended options of stocks and
bonus to one-third of all staffs in the company.

Q2) Did Jack Welch implement radical or incremental change at GE? Give case study
examples in support of your discussion. Why do you think he chose the approach?
The case study confers on the idea related to the type of change which is quite identical with
radical kind of change based on the same features reflected in the case study.
Radical change involves innovation and differentiated views from that of others. By nature,
this type of change is new as well as ground-breaking.
Examples of radical change as per the case study
Earlier management formed by predecessor Reginald H. Jones was dismantled by Jack
Welch. Moreover, the system of bureaucracy was destroyed by Jack Welch. He also
abolished the hierarchy of nine-layer management. These examples from the given case study
show the influence of a radical change in GE pioneered by Jack (Welch Higgs, 2010).
The reason for choosing radical change in GE by Jack Welch is to bring more innovation and
modernity for achieving success over a short period of time. Additionally, this aimed to be
different from others’ view causing implementation of the new idea (Goetsch & Davis,
2014).
Q3) Use key characteristics of leaders accomplishing successful change projects to
examine the description of Welch as a leader of change. Utilise case study instances in
support of your answer
The characteristics of good leaders are many, such as the ability to delegate tasks or
responsibilities, communication, honesty, commitment, confidence, creativity, positive
attitude, ability to motivate individuals. These features are more or less existent according to
nature of leadership e.g. Transformational or transactional.
In relation to the case study, Jack Welch has the following set of characteristics for ensuring a
successful change project. Features like positive attitude, confidence, creativity, ability to
motivate others and commitment are present as leadership characteristics of Jack Welch.
Examples
Ability to motivate - program of stock options was broadened by Jack Welch to one-third of
all staffs.

Confidence - he reduced inventory to remove perceived inefficiency, abolished bureaucracy
and formed informality policy at the workplace.
Creativity - Under Welch’s leadership GE’s market worth rose to $410 billion in 1981.
Positive attitude - Welch rewarded top 20 percent managers by stock options and bonuses.
Commitment – Jack Welch permitted all employees to enjoy small-business kind of
experiences in the big corporate house by the policy of informality in the workplace, his
leadership fetched $410 billion worth market value.
Q4
a) Discussion of the ways that Welch used to surmount opposition to change during
change implementation within the GE culture. Use the case study examples to support
your answer
Resistance to change is common in the change process and overcoming resistance is part of
change management. After Jack Welch took over the position of CEO he put effort to bring
change in GE and in the process he performed several actions which helped him to overcome
resistance. Welch introduced the culture of informality in the workplace which gave the
employees an opportunity to feel a sense of empowerment. By closing monotonous units he
attempted to reduce resistance among the employees therein. He resorted to the planning of
motivation which was for performers only by conferring option of bonus and stock to bulk up
the amount of overall compensation (Wagner, 2016). He sensed the possibility of resistance
from manpower engage in underperforming businesses and accordingly sold off the
businesses. Additionally, Welch stressed communication for getting change accepted among
employees and in this pursuit he abolished hierarchy of nine-layer management. This helped
him to ensure informality in the workplace and employees forgot their resentment and felt
more empowered and showed less or no resistance to change.
b) Compare this approach with his structural change implementation in GE when he
first became CEO
Jack Welch’s approach to initiating change process involved the effort of overcoming
resistance. This was complemented by new structural changes he brought in GE at the time
he took over the position of CEO. Earlier structure of management was dismantled by Jack
Welch to initiate a less bureaucratic structure to support a change in GE along with growth
strategy. This helped him to abolish hierarchy of nine-layer management facilitating

communication with staffs and convenience in motivating them to accept change (Anderson
& Anderson, 2010). Welch desired to offer the employees an working experience in small
business even though they are associate of large corporations such as GE. This was possible
for him by abolishing structure of bureaucracy and a hierarchy level such as nine-layer
management. Therefore approach to overcome resistance to change was supported by
structural modification Welch implemented after he stepped up his position as a CEO in GE.
Q5) Application of 8-stage model (Kotter) to Welch’s change in GE. Cite case study
instances for explanations in relation to the various phases of the model
Kotter’s eight steps of planned change model include the following:
1. Creation of a sense of exigency
2. Creation of a guiding alliance
3. Creation of a change image
4. Vision communication
5. Removing of hindrances
6. Creation of temporary victories
7. Consolidation of short-term wins
8. Anchoring of the transformations
Case study reference and application of change model by Jack Welch
Welch created a sense of urgency by creating a convincing mode of communication and for
this purpose, he abolished bureaucracy in GE and brought informality in the workplace to
facilitate better communication with employees (Bolman & Deal,2017).
Jack Welch focused on creating a project team and this was evident from his move of
dismantling management formed by his predecessor.
He tried to present a clear vision of change and this was supported by demolishing perceived
inefficiency and bureaucracy. Furthermore, an act such as factory closure and reduction of
payrolls gave employees a sense of imminent change (Andrews, McConnell & Wescott,
2010).
Removal of nine-layer hierarchy in management was an effort of Jack Welch to initiate better
communication with employees regarding change concept.

Obstacle removal in terms of elimination of impediments to change was apparent from his act
of shutting lackluster units and closing underperforming businesses.
Removal of bureaucracy concept and the introduction of informality in workplaces were
accepted among employees and this could be considered first short-term win in the change
process.
Jack Welch focused on driving the short term win to achieve more change and success in
business. This was supported by the adoption of strategies in quick succession. Expansions of
the option of stocks and bonuses to one-third of all employees, removal of nine-level of
hierarchy in management are examples of consolidation of short wins by him.
Jack Welch tried to introduce change in the culture of the organization for getting it accepted
by the employees. Elimination of bureaucracy and the introduction of informality in the
workplace were parts of change function in the culture of GE. Jack Welch dismantled
management created by his precursor and this was the beginning of a culture of change in GE
initiated by him (Leithwood & Hallinger, 2012).
Conclusion
This present report has followed a case study of Jack Welch and discussed some aspects of
leadership along with change management with reference to the given case study. Leaders
need to have some qualities in order to be effective leaders and in relation to this case study
these qualities have been discussed in this report.

References
Beck, D. E., & Cowan, C. C. (2014). Spiral dynamics: Mastering values, leadership and
change. John Wiley & Sons.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence.
Upper Saddle River, NJ: pearson.
Leithwood, K. A., & Hallinger, P. (Eds.). (2012). Second international handbook of
educational leadership and administration (Vol. 8). Springer Science & Business Media.
Andrews, M., McConnell, J., & Wescott, A. (2010). Development as leadership-led change:
a report for the Global Leadership Initiative. The World Bank.
Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and
leadership. John Wiley & Sons.
Anderson, D., & Anderson, L. A. (2010). Beyond change management: How to achieve
breakthrough results through conscious change leadership (Vol. 36). John Wiley & Sons.
Wagner, W. E. (2016). Leadership for a better world: Understanding the social change
model of leadership development. John Wiley & Sons.
Higgs, M. (2010). Change and its leadership: The role of positive emotions. In Oxford
handbook of positive psychology and work.