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Jack Welch – Key Management Themes

Jack Welch – Key Management Themes. Informal Communicative Environment Cut Bureaucracy Build Efficiency Foster Creativity Develop People Clearly Communicate Visions & Expectations Cut Your Losses from Mediocrity Six Sigma Methodology. Historical Parallels. Jules Henri Fayol (1841-1925)

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Jack Welch – Key Management Themes

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  1. Jack Welch – Key Management Themes • Informal Communicative Environment • Cut Bureaucracy • Build Efficiency • Foster Creativity • Develop People • Clearly Communicate Visions & Expectations • Cut Your Losses from Mediocrity • Six Sigma Methodology

  2. Historical Parallels • Jules Henri Fayol(1841-1925) • Began Career in Engineering • Elevated to General Manager Level • Closed or Reorganized Non-productive Business Units • Acquired New Business Units to Promote Diversification and Integration • Pioneer in Management Theory • Managerial Ability vs. Technical Abiity • Developed 1st Principles of Management

  3. Fayol’s Key Elements of Management • Planning – Define & Communicate Objectives • Organizing – Providing Knowledge and Resources to Achieve • People and not structure make the difference • Promoted Management Training • Command – “Get the optimum return from all employees” • Coordination – Harmonize Activities for Success • Control – Measure Performance and make Adjustments

  4. Fayol: Key Command Concepts • Thorough Knowledge of Employees • Eliminate Incompetent Employees • Make Unity, Energy, Initiative, & Loyalty Prevail

  5. Chester I. Barnard – Executive Functions • Formulate a Purpose • Provide Systems of Communication • Promote & Secure Essential Efforts • Recruit compatible employees – Group Dynamics • Maintain morale & “Informal” environment • Maintain inducements & rewards • Maintain controls – training and performance measures

  6. Henry A. Murray (1893-1988) Developing People - Factors of Motivation • Power – Welch empowered Managers & Business Units to control their own destiny • Affiliation – CEC sessions (top 500 execs), Crotonville training sessions (rising stars) • Achievement – 25% pay increases, 20%-70% bonuses, stock options (27,000 employees)¹ ¹ - Source: Business Week – June 8, 1998 (http://www.businessweek.com/1998/23/b3581001.htm)

  7. Scientific Management & The Hawthorne Studies • Linked to Six Sigma Methodology • Statistically define, measure, analyze, design, verify • Create the best environments to accomplish work • Eliminate factors that reduce quality and that waste time & energy • Implement conditions with the best opportunity for Success • Six Sigma goes maximizes employee contribution and the effectiveness of designs, systems, and processes.

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