Empowement in General Electric Case Study

Introduction: Our case today is in general electric company which is a global infrastructure, finance and Media Company takes a challenge from everyday light bulbs to fuel cell technology, to cleaner, more efficient jet engines. It has begun for over 130 years. GE company •SERVICES : financial services such as credit cards ,real stat loans and insurance etc Information services such as electronic messaging, data network service NBC : TV network, tv stations and program production •Technology : aircraft engines such as jet engines and military Plastics.

Aerospace such as electronics, radar and space craft •Core manufacturing : appliances such as refrigerators , dishwashers and micro wave ovens Motors such as air conditioning and heating Transportation systems such as electric wheels and locomotives Jack Welch in GE: When Jack Welch became CEO of GE in 1981, he has made General Electric Corporation (GE) into one of the world’s most successful companies. He grew GE from a $24+ billion company to into a $74+ billion company. his management and motivation approach included three main areas:

1.) Goal setting and preparing the company on a corporate level for its competitive challenges; 2. ) Empowering employees at all levels of the organization; and 3. ) Communicating his new goals and visions through the entire organization, using such tools as extensive training programs, newly formed teams and 3600 review processes. Different aspects of Jack Welch’s management tactics, in terms of motivating employees to bring about change, can be compared and contrasted with some of the cases analyzed during this quarter. a reduction of bureaucracy and secrecy.

Some of Welch’s other tactics includes an analysis of resources, sources of power, allies, locations within communication networks, reciprocation, formal authority, reputation, and performance J. Welch Goals & competition: – Competency: Early on in Jack Welch’s career with GE, he exercised the use of goals and competition to drive above average performance. -Motivation : Another way of looking at Jack Welch’s attitude towards management and motivation in terms of goal setting may be compared to what is often referred to as “the boiling frog syndrome”.

When a frog is placed in a pot of water in which the heat is slowly turned up, it will not recognize the rising temperate, remain complacent and eventually boil to death. Analogously, Welch sees GE as being the frog placed in the world pot of water. The water temperature around GE is slowing rising and GE is getting hotter. If GE does not react to the temperature increases related to competition, it will boil to death as does the frog. If GE leads the market however, throws itself right into the pot of boiling water, it will jump right back out, just like a frog would do, if thrown directly into a pot of boiling water.

While others may sit and wait complacently, slowly letting the heat rise around them, Jack Welch prefers throwing GE right into its challenges, shocking the system and forcing immediate reactions. (relate it to the lecture : The frog example) •What do you think of the frog approach? Do you agree with the sudden change he did? The slope of satisfaction: The slope of satisfaction (pictured in the diagram below) refers to the incremental level of satisfaction a person gains for each additional unit of effort towards a goal. The slope increases as the person approaches the goal.

Therefore, as a person gets close to reaching a goal he is more motivated to try to close the gap between the current level of performance and the target. However, if the goal is seemingly unachievable, the likelihood of the person undertaking or completing the task is reduced. (Draw the satisfaction Axis on board with explanation: see page 7) He rewarded people by giving bonuses if they made great progress towards the goals, even if they did not reach them (which is an important principle of an empowered workplace which is: recognizing accomplishments and used the reward power S12).

Rewarding employees on their effort they exert even if they did not achieve the main goal aiming to motivate and enhance employees performance. •From your point of view does this rewarding method will affect the organization’s main goal? Empowerment: When Welch took over GE, he had a vision of creating an organization where people at all levels could be held responsible for their own work, and in the end make decisions for the betterment of their job. The goal was not to control workers, but instead to liberate them.

Welch characterized this as creating a boundaryless organization in which empowered employees were self directed and motivated to effectively reach their goals. What did welch do to communicate directly to his employees? When Welch became the CEO of GE he found that the company was represented by an overwhelming nine layers of management between the shop floor and the CEO. This bureaucracy lead to an unresponsive, inward focused company whose employees found great difficulty in communicating with one another. How did he react to this situation?

Welch addressed this issue by eliminating whole layers of management, consolidating overlapping jobs and business units, and forcing employees at every level to take more responsibility for their own work. Do you think that welch’s behavior was idealistic when removing all management layers between CEO and the employees to make a direct contact between the worker or employee and his CEO? If something was not absolutely necessary they eliminated it. They stopped gathering unnecessary financial data and eliminated unnecessary reports.

In the past, it had not been unusual for business managers to request daily reports that contained so much detail by reducing the need for inspectors. In effect, employees were given the ability to eliminate those aspects of their job that were unproductive and thus unnecessary. •Work out: • As stated in the lecture, in order to make employees obey an order, they should accept it. Though the “work out’ concept apply that. It has been an empowerment concept greatly favored by Welch.

Where Thousands of GE employees get an opportunity to get together and share their ideas, thoughts and know-how, while building and fostering a more creative and team oriented atmosphere. The Work-Out encourages communication and accountability with the ultimate goal being to drive above average team performance. By providing each team member with the opportunity to contribute his ideas to the decision making process. Do you think that employees can easily adopt to change Or employees are stable and like machines?

Under Jack Welch, GE began to realize that human beings are not machines and that each person has the potential to enhance productivity. Knowing how to use this resource can not only give the company a competitive edge, it can make each employee feel more important in the production process and thus more motivated. How empowerment can benefit the organization? 1. By empowering people, an organization gives employees the ultimate responsibility for their own work. If they share the company’s goals, they do not need much supervision. Cost will be reduced and layers of management will become unnecessary.

2. Employees become motivated to perform their jobs optimally. The old managerial habit of imposing ideas on people has the result of turning those ideas into rules, stripping them of their vitality. When a person develops his own ideas for how the work should be done, he will take ownership of his work and will perform that work with energy and enthusiasm. Welch understood that the power of command could not get him the loyalty he sought. He strove to liberate the minds of his subordinates and let them come up with the best ideas for getting the job done.

3. Large productivity improvements will often accompany the empowerment of employees. For years management had assumed that they always knew the best ways to do things. They forced workers to do things the way they wanted, so the workers succumbed to the wills of their bosses and did as they were told. However, what management often overlooks is the fact that the workers, who spend much more time than management actually doing the work, have great ideas for improving the processes and productivity of the work they are performing.

When given a chance to implement these ideas, the company will often experience large productivity improvements. 4. The organization will be able to implement new ideas faster and will be much more responsive to the market. In the old GE, ideas had to be approved by many layers of management and had to be entombed in facts and research if they had any chance of being implemented. In the new GE, the person who comes up with the idea will have much more power and latitude to implement the idea without having to battle the bureaucracy.

Empowerment now take us to an important question come to mind.. The Key question of the case: how leaders like Welch decide that empowerment is the right strategy? (here we may show a two videos concerning both situations(authoritarian organization & empowering company) and audiences give their expectations on the results of each video)

One way to decide on this is to envision a very hierarchical organization and an empowering organization. Our studies of Lyndon B. Johnson are a demonstration of a very authoritarian organization (proxy for the characteristics of a hierarchical organization). Johnson did all of the thinking and expected his subordinates to do exactly what he told them. He motivated his subordinates through fear, intimidation, and need.

He hired them to do his bidding, not to think for themselves. In contrast, an example of an empowering company is the Body Shop. Anita Roddick believed that she could get the most out of her employees if she sold them on her vision but then encouraged free thinking within the organization.

The result of her philosophy is a group of very happy and motivated employees and a creative and customer focused organization. Though Lyndon Johnson may have been successful in some terms, there can be little doubt that, especially in today’s society, most would prefer to work for an organization such as the Body Shop, where employees feel that their knowledge is being leveraged and combined in the most useful way. And how he can balance the empowerment concept (making employees take decisions and feel involved) and at the same time obey their leaders’ orders?

Communication

•“Boundaryless behavior” is the elimination of unnecessary communication filters are the key phrases to describe Jack Welch’s attitude towards communication. •Free thinkers: To facilitate goal setting and empowerment within GE, Welch needed to establish clear lines of Communication in the organization. He realized that employees come to GE with many different experiences and backgrounds. He did not want to take away from the benefit of those various backgrounds, as much as reshape them with GE philosophies. This is not to say that he wanted a workforce of robots.

Just the opposite actually, he wants free thinkers. One of his objectives was to motivate people to think outside the box and challenge the status quo. •Two ways of communication: Open communication channels between Welch and his employees have been an important tool in this regard. These channels work in both directions, giving employees the ability to air their concerns and work towards a consensus for action. They also help motivate employees, because once again employees feel that they are directly contributing to the success of the company.

He has done everything in his power to communicate directly with employees, including face-to-face meetings with subordinates as often as possible and participating in the Work-Out (previously discussed). •Training management: Another major component of Welch‘s communication philosophy has been his approach to the training of management. ?Crotonville training center” : Education and the “Crotonville training center” are a critical part of Jack Welch’s communication philosophy at GE. Crotonville is no ordinary training center, though.

In addition to lectures, attendees participate in team building exercises and mandates to tackle real GE problems. Welch uses Crotonville as a hub for communication throughout the GE organization. At Crotonville, all GE managers are indoctrinated with the GE goals and value system. They are allowed to be frank with their opinions and concerns, while challenging policies and strategies of the company. Crotonville is the place where mangers learn about GE and get to experience the face-to-face debate and problem solving that is a cherished part of GE’s culture.

Servant leadership: •A calling to serve begins with the feeling deep down inside that one cares about people and wants to help others through: 1. Access: Employees to see recognition & appreciation from their leaders. People need to have access with their leaders to contact them. Related to GE, it was applied by face to face meetings. 2. Communication: through meetings provide valuable opportunities to share information lay out the work and solving problems. GE applied this communication through work out 3. Support: when you have a feedback. Criticism: