Organizational Leadership

This article discusses the leadership style of Jack Welch and his strategies for transforming GE into a successful and profitable company. It also explores the characteristics of a change leader and the steps involved in implementing change. The article provides examples of Welch's leadership style and the changes he made to the company's structure and culture.

Running Head: ORGANIZATIONAL LEADERSHIP 0
Student’s Name:
Organizational Leadership
January 11
2018

ORGANIZATIONAL LEADERSHIP 1
Q.1 Difference in between transactional and transformational leader:
Transactional: Transactional leadership is an instructional leadership mode. It is about the
management and deployment of resources and people to get results.
Transformational: It is a theory of leadership where frontrunners encourage, inspire and
motivate employees to identify needed change, creating a vision to guide the change through the
vision (White, 2018).
Hence, Welch as a transformational leader because he believes in success as growth in an
individual, and leadership as a success in others growth (Cobo, 2017).
a). Leadership and not Management
Leadership is about empowering, and not dictating employees. Welch is not in support of
the term ‘manage’. To him, the word ‘manage’ indicates the environment of controlling people,
keeping them in the dark and it creates a negative image somewhere. Leadership is easy to find
in people contributing good ideas, a capability to energize others and creating an exciting
environment. Management is a term of craft where leadership is a term of art (Cobo, 2017).
b). The change gives an opportunity, it is not a threat
Change does not mean to make things worse or upset, Change can give an opportunity,
can provide new ideas, business, and new products (Cobo, 2017).
c). Intellectual is important not hierarchy rules
Running a business in manager’s rule and staff does what managers want them to do. It
controls people to provide good ideas and providing creative solutions to the problems. Welch
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ORGANIZATIONAL LEADERSHIP 2
had created an environment of learning organization in which intellect and ideas rule over
hierarchy and tradition (Cobo, 2017).
d). Put values First, not Numbers
Jack cares for the numbers, but he puts values first rather than figures or numbers. Values
include pleasing customers; to balance the attention of numbers let the values rule by lead the
examples (Cobo, 2017).
Q.2 April, 1981 US was in a downturn and that was the time when Jack was announced as a
GE’s CEO. Strong dollar resulted in the country’s highest unemployment rates. He challenged
everyone to be “better than the best” and planned radical change across the company under his
observation or guidance, the company expanded dramatically from 1981 to 2001 (Kirdahy,
2008).
Incremental Change: It refers to relatively minor adjustments and a thought of a work process
that mainly occurs via a series of small steps.
Radical Change: This refers to simplifying the work process and a significant shift behind the
fundamentals of a company’s products, practices, and norms.
Below are the examples:
a). Right investment at right time: He differentiated all the unprofitable companies or
businesses and acquired companies during the recession. And this clever decision he had taken
when buying a company was really cheap.
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ORGANIZATIONAL LEADERSHIP 3
b). Implement a culture of innovation and learning: He created a culture of innovation
and learning for everyone in the organization to get the fundamental rights.
GE increased market value increased from $12 billion in 1981 to $410 billion when he
retired; this is itself a great success and support towards his radical change strategy (George,
2017).
Q.3 There is a wide variety of different people with different characters who inspired the
world to do their best, Jack is one of them.
Below is the list of characteristics of leaders that jack can demonstrate as a change leader-
a). Leader as a change leader instead of maintaining status quo: Leaders hold change
and always find a better way to go ahead even if things are working. And they also are in support
the fact that changes whether to the system or in the behavior of working frequently create
waves. And Jack was one of them.
b). Demonstrate courage: By challenging reality and compliant accountability Jack can
demonstrate courage inside the workplace.
c). Empowering employees to empower themselves: Being a leader always believe in
employees and believe in their capacity to assume responsibility or to take decisions.
d). Assimilate and articulate values that promote adaptability: Being a leader
understands the organizational principles and articulating the values and promotes the acceptance
of the change initiatives to coat a convincing visualization for the future and encourage or
motivate employees to shadow.
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ORGANIZATIONAL LEADERSHIP 4
e). Recognize and learn from their own mistake: Committing a mistake and then
admitting it is an ability of a leader or a wise person. People can only learn from their own
mistakes and they know the progress quickens when they do.
d). The capability of managing complexity, uncertainty and ambiguity: A leader should
be capable to manage the complexity of work, uncertainty of sudden change and ambiguity of an
excess of statistics that is less and less flawless to make it flawless or define it in a clear view.
e). Describing the vision for the future in vivid terms: Every individual have their own
vision towards their goal but a leader describes that vision in vivid terms for the future to avoid
the assumptions and a risk factor.
Q.4 (A) In April 1981 Jack Welch became the CEO of GE. He transformed the most
struggling and complacent company into energized and the biggest corporation as well as the
most profitable in the entire world, ready to face world competitions with his unique ideas and
goal settings, encouragement, and empowerment.
Examples:
a). Face reality: Where other people were in a dilemma for the GE, Jack had faced the
reality to take the decision to provide GE a different environment for its growth.
b). Look at things with a fresh eye: Employees at GE were in under observation of
Management, and Jack started to let them come up with their own ideas and strategy for reaching
the goal.
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ORGANIZATIONAL LEADERSHIP 5
c). Simplify workplace: He provided everyone in the organization with an environment of
openness, simplicity, speed, self-confidence, where people were free to give their thoughts over
the change in business process.
d). Inspire others to perform: Inspiring and motivating people as a role model.
e). Make others enthusiastic for doing their job: By providing or implementing new
ideas, keeping success on priority and sustained commitments was the key to make people
passionate to do things.
(B) Structural Change: Structural change includes overall goals, internal and external
factors, purpose and strategy of an organization.
Welch had done a drastic change in the earlier management and formed it in
simplification and consolidation in 1982. Every year, bottom 10% of Welch’s managers would
have fired except excellent performers (Cohan, 2012). GE’s employee value got decreased by
1985, at the end of 1980 it was 411,000 employees and remained 299,000 at the end of
1985(Wikipedia, 2012). In 1980, GE’s revenue of $26.8 billion which is recorded later on nearly
$130 billion in 2000, the year before he left (Wikipedia, 2012).
Q.5 1). Establish a sense of urgency: Jack believes that sense of urgency is the first
make or break level of the change process. He had provided an environment of excitement and
energizing people to get onboard. The sense of urgency is not to do more but to reprioritize.
Providing a reason to leave their comfort zone and be uncomfortable over the short term.
Willingness to sacrifice when needed.
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ORGANIZATIONAL LEADERSHIP 6
2). Create the guiding coalition: There are few points that must include in the effective
guiding coalition such as expertise, ability to encourage and motivate people; proven leaders like
Jack Welch had proved himself as a leader, position power, significant level of trust, Jack
believes in their employees he trusted them for their given tasks and on their ability of doing
things and shared objectives.
3). Develop a change vision: Best leaders are visionaries who never get obsessed over every
detail, instead they inspire others to execute on their goals as a vision. Jack used to be flexible
and desired, feasible, communicable, an inspiration to others and focused towards his goals. He
transformed the GE with his simplicity and unique vision.
4). Communicate the change vision: Jack used to do discussions instead of emailing and
presentations. His strategies to make people understand about his vision were very acceptable,
convenient, inspired and powerful.
5). Empower employees to act on the vision: He believes that management includes
system and process which is kind of an obstacle in an openness of people’s vision and strategies.
He acted cleverly by acquired companies during the recession.
6). Plan for and create short-term wins: Achieving goals without clear vision and
strategies is not that easy for any organization. To make staff feel accomplish, he had given an
opportunity to people to provide views for achieving the short-term goals and come up with an
individual’s identity.
7). Consolidate improvements and produce more change: For achieving goals
improvement in work process and system is Important. Promotions, practices, encouragement,
inspirations, self-motivation are included in it.
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ORGANIZATIONAL LEADERSHIP 7
8). Embed new approaches: Rewards and encouragement are one of the key factors to the
new behaviors or approaches to embed into new culture and process.
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ORGANIZATIONAL LEADERSHIP 8
References
Cobo, S.R. (2017). Jack Welch: the master of transformational leadership theory. Retrieved
from: https://www.linkedin.com/pulse/jack-welch-master-transformational-leadership-
theory-r%C3%B3denas-cobo
Cohan, P. (2012). Why Stack Ranking Worked Better at GE Than Microsoft. Retrieved from:
https://www.forbes.com/sites/petercohan/2012/07/13/why-stack-ranking-worked-better-
at-ge-than-microsoft/#4b02b9303236
Forbes (2018). Jeff Bezos. Retrieved from:
https://www.forbes.com/profile/jeff-bezos/#1acc1d591b23
Forbes (2018). Warren Buffet. Retrieved from:
https://www.forbes.com/profile/warren-buffett/#24882b884639
George, B.(2017). The tragic history of GE’s disastrous decline. Retrieved from:
https://www.cnbc.com/2017/11/17/ges-john-flannery-lacks-vision-strategy-and-passion-
to-rebuild-company-commentary.html
Kirdahy, M. (2008). What Made Jack Welch Jack Welch. Retrieved from:
https://www.forbes.com/2008/02/22/reading-baum-executives-lead-manage-
cx_mk_0222welch.html#3eeab11315b5
Sheetz, M. (2018). Jeff Immelt's refusal to give or take bad news defined his leadership at GE.
Retrieved from: https://www.cnbc.com/2018/02/21/jeff-immelts-refusal-to-give-or-take-
bad-news-defined-his-leadership-at-ge.html
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ORGANIZATIONAL LEADERSHIP 9
Sheetz, M. (2018). Jeff Immelt's refusal to give or take bad news defined his leadership at GE.
Retrieved from: https://www.cnbc.com/2018/02/21/jeff-immelts-refusal-to-give-or-take-
bad-news-defined-his-leadership-at-ge.html
White, S. K. (2018). What is transformational leadership? A model for motivating innovation.
Retrieved from: https://www.cio.com/article/3257184/leadership-management/what-is-
transformational-leadership-a-model-for-motivating-innovation.html
Wikipedia (2012). Jack Welch. Retrieved from:
https://en.wikipedia.org/wiki/Jack_Welch#cite_note-21
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