Born in 1892, with the merger of the Edison General Electric Company and the Thomson-Houston Company, a competing manufacturer of dynamos and electric lights, today GE is ranked among the Fortune 500, as one of the world’s largest corporations. Headquartered in Boston, GE has become a multi-business company operating in a range of industries including additives, aviation, capital, digital, healthcare, lighting, power, energy infrastructure, renewable energy, and global research.

“GE can trace its roots to the early power industry. GE originally focused on power- industry related items, such as electric lamps, generators, alternators and motors” (ETHW.org, 2015). 1879 brought the world’s first electric light. Invented by Thomas Edison, it was the first commercially practical incandescent lamp capable of sustaining light for more than 40 hours. Additionally, later that year, Edison and his team began to manufacture the first dynamos, devices that allowed for the conversion of mechanical energy into electric energy – “capable of powering neighborhood-wide lighting systems” (General Electric, 2013).

Fast forward 100 years, GE Lighting is responsible for the creation of fused quartz ingots – marking the beginning of the fiber optic revolution. There is the birth of a MRI machine, Signa Magnetic Resonance Imaging System, which “produces cross- sectional images of internal body structures with unprecedented detail and clarity, particularly of soft tissues” (General Electric, 2013). And five years later, in 1989, GE’s NBC launches CNBC – the Consumer News and Business Channel.

During the nearly 125 years that General Electric has been in business, it’s endured “two World Wars, the Great Depression, several other major recessions” (Heller, 2015). The company can be credited with the trans-oceanic radio system and selling kitchen appliances such as “The Hotpoint” – the first electric range, the toaster, dishwasher, and refrigerator – all inventions which were aimed to make the lives of housewives more convenient, which today have become an integral part of day-to-day life for many people around the world.

It is the company’s commitment to innovation and ability to produce what’s needed, even when overall as a society we may not know exactly what is needed which has allowed GE to overcome the impact of many disruptive historical events. It’s their “Imagination at work” which will in turn allow them to be around for another century (General Electric, 2013).

References

ETHW.org. (2015). General Electric (GE). Retrieved August 11, 2019, from https://ethw.org/General_Electric_(GE)

General Electric. (2013, October 01). 1878-1904. Retrieved August 11, 2019, from https://www.ge.com/in/about-us/history/1878-1904

General Electric. (2013, October 01). 1878-1904. Retrieved August 11, 2019, from https://www.ge.com/in/about-us/history/1971-1985

General Electric. (2013, October 01). 1878-1904. Retrieved August 11, 2019, from https://www.ge.com/in/about-us/history/1986-1997

Heller, S. (2015, July 12). From Light Bulb to Industrial Powerhouse: A Brief History of General Electric Company. Retrieved August 11, 2019, from https://www.fool.com/investing/general/2015/07/12/from-light-bulb-to-industrial-powerhouse-a-brief-h.aspx

               Charles Coffin was the co-founder and the first President of General Electric from 1892 to 1912. He became Chairman of the Board of GE from 1913 to 1922 and is often referred to as one of the greatest CEO’s of all time for his tenacity and leadership skills. Charles was not always in the electrical engineering field; at 18 he joined his uncle’s shoe manufacturing company and later founded his own company of the same trade. In 1883, he was approached by a businessman to help a struggling company, American Electric Co., which eventually merged with Thomas Edison’s Thomas-Houston Electric Company, thereby forming General Electric in 1892, now known as one of the most famous companies in the history of the United States. Coffin was named the President and CEO of General Electric in the same year and he has since become a household name in leadership.

After becoming the first president of GE, Coffin “was one of the first leaders to use a style of leadership that allows workers to develop their own ideas. These people were given the freedom to create their own products and test them out. It took great vision to understand that by himself Coffin probably couldn’t think of as many inventions as Edison did by himself. With this new development system GE could get a higher volume of ideas from their scientists. Coffin essentially created the modern ideology of what a CEO needs to do and how a company should operate. Coffin was a pioneer for business leadership and his practices are still used frequently” (“Charles Coffin was one of the,” 2019). Coffin was very trusting of his employees and gave them the freedom to create a culture within the company which ultimately led to its success. He realized that although innovation was important, harboring an entrepreneurial spirit and gaining the trust of his employees was also equally important to the success of his organization

Coffin practiced a transformational leadership style. He was known as “a man born to command, yet who never issued orders” (“Charles Coffin was one of the,” 2019) and had a charismatic personality. He inspired his employees but also gave them the space and creativity to contribute to the company’s core values. “Coffin’s associates (and he always made a point of calling them ‘my associates’ not ‘my subordinates’) knew him as a gracious gentleman and delightful companion” (“Charles A. Coffin,” 2019). He practiced the ideals of inspirational motivation and intellectual stimulation, challenging his followers to think for themselves and pursue their own vision. Coffin set the principle for not only highlighting the products of his business, but also putting value on organizational design and managerial talent.

Charles Coffin made numerous leadership decisions that positively impacted the growth of General Electric, even boosting the company’s market capitalization from $35 million to $184 million during his tenure in the company. One of his most important impacts on the company was “during the depression of 1893. A cash shortage threatened GE’s existence and he negotiated a deal with J.P. Morgan whereby New York banks advanced the needed money as payment for utility stocks that GE held. The tactic saved the company and made possible its rapid recovery and growth during the remainder of his tenure. He retired from the board chairmanship in 1922 and it remains his greatest monument” (“Charles A. Coffin,” 2019). His ability to quickly think on his feet, as well as figure out a solution that was mutually beneficial to both companies, saved General Electric from collapse and bolstered it into the company it is today.

Charles Coffin was named as one of the greatest CEO’s of all time for good reason; he set the precedent for letting employees utilize their creativity while gaining their trust and admiration. He was highly respected by his employees, them often saying “no man exercised his leadership with greater simplicity, greater humility, greater regard for others. He dominated but never domineered. His dominance sprang from the confidence which other placed in him” (Graham, 2011). He was highly respected and recognized by his peers and colleagues for his leadership style which has carried on a century later.

References

Charles Coffin was one of the first leaders to use a style of leadership that | Course Hero. (2019). Retrieved 3 August 2019, from https://www.coursehero.com/file/p5gm74u/Charles-Coffin-was-one-of-the-first-leaders-to-use-a-style-of-leadership-that/

Charles A. Coffin. (2019). Retrieved 29 July 2019, from https://www.ge.com/about-us/leadership/profiles/charles-coffin

Graham, J. (2011). Charles Coffin, The Man Who Electrified GE. Retrieved 29 July 2019, from https://www.investors.com/news/management/leaders-and-success/charles-coffin-the-man-who-electrified-ge/

• August 2019

Reginald Jones was a former CEO and chairman of GE from 1972 to 1981. Born in the United Kingdom and raised in the United States, Jones was the seventh man to lead GE and considered a model executive. He got his Bachelor of Science degree in economics in the year 1939 from the Wharton School at the University of Pennsylvania. “In 1939, he joined the Company Business Training Group Course and served as a manager for various business units such as consumer, utility, industrial, construction and distribution fields. After working in different sectors, he worked his way from CFO to SVP before becoming president then chairman and CEO of GE in 1972. By becoming the president of GE, Jones brought new vitality and fresh strategic direction to the most diversified company in the entire world. Besides serving as the president of GE, Reginald was a voice to develop international trade and contributed to the restoration of U.S. competitiveness” (“Reginald H. Jones,” 2019).

During his tenure as CEO, Reginald was able to develop a new strategic organization that enabled the company to ensure more accountability and implementation of a system of control for specific large industry sectors. Jones was even well-liked by his business peers with 1,439 American leaders calling him the ‘most influential leader’ in a survey conducted by the U.S. News & World Report (Barmash, 1979). Even when he took control of GE in most critical moments, Reginald had a clear vision on how to boost the company’s share by redesigning its organizational model. Despite the difficult times, Jones reached his expectations by more than “doubling revenues to $19.6 billion and tripling earnings to $1.23 billion” (Barmash, 1979).

Throughout his tenure, Jones had implemented a bureaucratic leadership style, “a system for controlling or managing a country, company, or organization that is operated by a large number of officials employed to follow rules carefully” (Martin, 2017), where his decisions were rarely met with opposition. In an instance of the decision to acquire Utah International, none could have opposed his view. To emphasize his bureaucratic style, Ralph Lazarus, a long time GE director and chairman of the Federated Department Stores chain stated the following “he had all the facts on Utah International so well developed that no one could dispute them” (Barmash, 1979). Even when he did not yet retire, he early declared his successor from the pool of twelve vice presidents that already ran the company.

In addition to a bureaucratic style to run GE, Jones practiced some transactional style when running GE. Transactional leadership is defined as “someone who values order and structure. They are likely to command military operations, manage large corporations, or lead international projects that require rules and regulations to complete objectives on time or move people and supplies in an organized way” (“What is transactional leadership,” 2018). Jones always prioritized the company’s interests without taking into consideration many of the effects. When Jones was about to cut losses during the struggle of the company, he had not expressed much feeling for workers even being quoted as saying “now I was convinced there was only one way to cut our losses that is, simply get out” (Barmash, 1979). Before firing workers, he always started the discussion that related to one’s performance, Jones giving his feedback, and, in the end, the employee would usually come to the conclusion to leave the company on his own accord, without Jones verbally dismissing the employee. Despite some controversial views on the adoption of the bureaucratic leadership style, Jones had some amazing accomplishments being head of GE.

Not only had Jones positively impacted the iconic company by doubling its sales and tripling its net income during a critical time, but he was different from his predecessors. During his passage, Jones had completely transformed GE’s business nature which was originally focused on electric equipment and appliances and shifted toward materials, natural resources, services, and transportation. 

Although the type of leadership style Jones practiced during his time running GE might have had a bad reputation, Jones impacted his time at GE by defining a new direction to the iconic company. He established managerial innovations by moving the company into scores of strategic business sectors, which even today these reforms he made are still existing.

References

Barmash, Isadore (1979). American’s most influential Jones. Retrieved 27 July 2019, from https://www.nytimes.com/1979/09/16/archives/americas-most-influential-jones-jones.html

Martin (2017). Bureaucratic leadership guide: Definition, qualities, pro & cons. Examples. Retrieved 29 July 2019 from https://www.cleverism.com/bureaucratic-leadership-guide/

Reginald H. Jones. (2019). Retrieved 29 July 2019, from https://www.ge.com/about-us/leadership/profiles/reginald-h-jones

What is the transactional leadership? How structure leads to results (2018). Retrieved 30 July 2019 from https://online.stu.edu/articles/education/what-is-transactional-leadership.aspx

John F. Welch Jr. was General Electric’s 8^th chairman and CEO from 1981 to 2001. Before becoming CEO, Welch started off as a chemical engineer for GE in Massachusetts. Welch attended the University of Massachusetts in 1957 and received his B.S. degree in chemical engineering. He then achieved his M.S. and Ph.D. in chemical engineering from the University of Illinois in 1960. Welch is known for being one of the most successful business leaders in the world. Welch had an aggressive mentality when it came to firing employees who were not meeting his expectations. Even though he was a ruthless leader, he knew how to motivate his employees.

John Welch left a huge mark on General Electric in his 20 years as CEO. His leadership style is what makes him stand out from other CEOs. Welch encouraged a more laid-back environment in the workplace. He allowed employees to dress more comfortable when at the office. One thing Welch pushed for was “the elimination of bureaucracy at the office” (Chris, 2015). When problems arose, he wanted members to communicate with one another instead of one department dealing with the problem. Another trait that made John Welch so great was his ability to change. Welch made drastic changes to GE as CEO and this has helped with the company’s success. One of them was his willingness to give up manufacturing to focus on financial services from acquiring other businesses.

People would say Welch’s leadership style was both brilliant and cruel, but this mind set is what made the company so successful. Welch was not worried about taking time to hear new ideas from all employees. He actually encouraged his employees to do this. Welch, “went beyond traditional functions and pointed out that ideas should be searched” (Chris, 2015). John made sure that employees were able to perform to their full potential. He encouraged workers to brainstorm ideas with all different employees in the workplace. Welch also gave his employees the ability to make decisions on their own while also supplying them with the skills and tools needed to succeed at their position in the company. Another thing Welch was known for was firing employees that he believed were not needed. Welch looked for quality over quantity when it came to workers.

Welch made an impact on the way General Electric ran their company but did even better at helping the company thrive financially. “During his 20 years of leadership in this position, Welch increased the value of the company from $13 billion to several hundred billion” (Welch, 2012). The recorded revenue at General Electric was at $26.8 billion before Welch became CEO of the company. The last year that Welch worked for GE the recorded revenue had increased to $130 billion. John Welch left a historic mark on General Electric and is known for being one of the most historic business leaders of all time. He was named “Manager of the Century” by Fortune in 1999.

It is hard to imagine General Electric’s success without the help of John Welch. His leadership style helped influence employees and kept them alert. He also left a positive mark on GE by increasing their revenue and market value by the billions. Welch continued to leave his mark on the world after GE by writing an international best-selling autobiography. He also started an online MBA program through Strayer University. “Princeton review ranked the MBA program as one of the best” (Clifford, 2017). Even though Welch has been both recognized and criticized for his leadership style, you have to admire the good he has done for General Electric.

References

Chris, J. (2015, August 18). 11 Jack Welch Leadership Style Axioms. Retrieved August 2, 2019, from http://www.josephchris.com/11-jack-welch-leadership-style-axioms

Clifford, C. (2017, November 17). Jack Welch: This is the No. 1 Key to Success as a Leader. Retrieved August 2, 2019, from https://www.cnbc.com/2017/11/17/former-ge-ceo-jack-welch-how-to-be-a-great-leader.html

John F. Welch, Jr. (2012, December 17). Retrieved August 2, 2019, from https://www.ge.com/about-us/leadership/profiles/john-f-welch-jr

• August 2019

The leader of an organization can either have a positive or negative impact on a company. A great leader can influence their employees to do their best, this includes guiding them in a positive direction instead of criticizing their mistakes. A leader must learn to adapt to new situations to help the firm succeed. A leader’s style is also important, one leadership style may work for one company but not another. It is important for a leader to embrace their leadership style while also recognizing how to adapt that style to what employees need to succeed.

Throughout this exercise, we have learned a lot about the impact that a leader has on an organization. “When good leadership is in place, it can be felt throughout the entire organization. With good leadership, corporate culture isn’t forced, it is developed” (Anderson, 2013). Under good leadership, communication is open, and employees understand the vision and goals of the company and they feel that they are an important part of the organization. Leadership means motivating people to do their best, working at full efficiency and in the best interest of the company. Leadership can impact a company in several ways. Positive leadership can increase sales, production and influence culture. With bad leadership, “there is a lack of clear, consistent communication from leaders to the employees. Employees are uncertain of the company’s goals and objectives for success and they have no idea how they fit into that picture” (Anderson, 2013). In that respect, the company could see increased turnover, reduced productivity and a lack of trust in management and the company as a whole.

            In the case of Charles Coffin, we see that his impact was letting employees have the freedom to be creative. He wasn’t an overbearing leader and by giving the employees the ability to create, adapt and manage themselves, he was able to boost the company’s market value to over $184 million. John Welch practiced some of the same values of Coffin and also saw increased value of the company in the billions during his tenure. He also encouraged employees to brainstorm while supplying them with the tools they needed to succeed. Without these two leaders, it is safe to say that General Electric would not be the company that it is today.

            This exercise showed us how important leadership style is and greatly increased our knowledge in understanding the different leadership styles. All leadership styles can be effective if used appropriately. We were able to see how the leadership styles at GE evolved from 1892 to 2001 while our selected leaders were in command. At the beginning of GE, ideas and creativity were greatly valued and encouraged. Over the next several years, a more bureaucratic leadership style was used, which aligns with how most companies were functioning at that time. Although they were still doing well, it was when John Welch came in, and again used the idea of putting power and creativity back in the hands of the employees, that we really saw the business take off and reach new heights of success. Reginald Jones was one of those using a bureaucratic leadership style throughout the seventies and early eighties, which was common and successful throughout that time period. Each of our leaders experienced massive success throughout their tenure by adapting and challenging the business culture they oversaw.

Leaders of an organization and their leadership style have an enormous impact on the companies they work for for many reasons. In Management: An Integrated Approach, author Ranjay Gulati says it best when he says:

“By the nature of their role in the organization, leaders are held responsible for results. They also significantly influence the manner in which those results are achieved as well as the values that are upheld. Employees at all levels look to leaders for guidance about what is important, what is measured, and what is rewarded in the organization. Given that employees look to leaders for clues about appropriate behavior, leaders at all levels in an organization must comprehend the implications of what they say and do. In other words, as role models, leaders must be vigilant that their actions do not result in adverse consequences. The leaders of an organization often have the responsibility to ensure that the culture reinforces positive behavior.”

Leaders are the driving factor to success in all organizations. With their direction, support and communication, employees are able to meet goals, cultivate a company culture and set the standard for achieving success in the organization. General Electric, and their many leaders throughout the centuries, have fostered this idealization of leadership and thus, has contributed to their many accomplishments.

References

Anderson, A. (2019). Good Leaders Are Invaluable To A Company. Bad Leaders Will Destroy It. Retrieved 3 August 2019, from https://www.forbes.com/sites/amyanderson/2013/01/14/good-leaders-are-invaluable-to-a-company-bad-leaders-will-destroy-it/#4d81b0a81138

GULATI, R. (2018). MANAGEMENT + MINDTAP V2 MANAGEMENT, 1 TERM 6 MONTHS ACCESS CARD (pp. 216-217). Boston, MA: SOUTH-WESTERN