Immelt Case - Brooke Galietto February 22, 2011 Management...

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Brooke Galietto February 22, 2011 Management 415 Case 2 Executive Summary: In the Welch to Immelt case, the fundamental management problem at hand is that Welch and Immelt are two very different leaders who will lead under extremely different circumstances due to economic trends. Therefore, Immelt is faced with a challenge on how to lead authentically and establish his credibility from day one without uprooting the impressive organization that Welch created. Under Welch’s leadership, GE established a unique organizational culture that became the powerhouse of the organization and the key to GE’s success. GE’s profits grew, productivity reached new levels, employees were aligned under shared values, and because of all these accomplishments, Welch was recognized as one of the best CEOs nationwide. However, Welch’s success as a leader and tangible presence at GE are the root of the challenge for Immelt. Because Welch’s goals and preferences are so ingrained in GE’s every procedure and day-to-day work ethic it will be difficult for Immelt to transition into his position as CEO. GE employees are committed to the organization Welch created. This is seen in the type of employees who are hired and the general strive for efficiency and increased productivity. Therefore, in order for Immelt to align the GE workforce and establish his credibility he cannot disregard the importance of the existing shared values and corporate culture. However, he also has to appeal to the employees and explain why the changes he calls for are necessary in the face of recent trends such as globalization, and the economic crisis at hand. It is critical that Immelt pursue active participation and communication throughout the transition. The formation of a new vision statement should be not instituted immediately. It should reflect the values and goals of Immelt and those of the workforce at GE alike. Finally, it must serve as a harmonizing tool rather than a statement of Immelt’s personal agenda. Before Immelt can make major changes to daily life at GE he has to gather support and trust from his co-workers. Primary Analysis: Immelt, like previous leaders of GE, uses his position as CEO to steer the company into the businesses it wants to be in at that time. Throughout its history, GE has been accustomed to changing its portfolio of businesses; Welch and Jones both shifted GE’s focus to different businesses. However, GE’s legacy of creating the best managers
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has always been maintained. Welch’s basis for rewarding employees, creating high quality managers, and generating overall GE success was carefully calculated and transparent. Immelt believes that in order to sustain success GE needs to strive for and reward those who take risks and are creative forces in the company; these traits cannot be measured by applying a formula. Instead, success and rewards are measured subjectively rather than objectively. These procedural differences are the root of the challenge Immelt
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This document was uploaded on 10/27/2011 for the course MKT 291 at Miami University.

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Immelt Case - Brooke Galietto February 22, 2011 Management...

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