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Jack Welch Case

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1) Welch practices a hard-nosed management style. How can such a no-nonsense approach create a motivational atmosphere? Does Jack Welch use negative reinforcement, goal setting, or behavioral self-management? Or does he use a combination of techniques?

Jack Welch has gained the reputation of one of the best CEOs in the nation. His style might have seemed quite rigorous, but he managed to motivate his employees very well and made GE highly competitive in the global market. Jack Welch created a motivational atmosphere by encouraging employees to eliminate those aspects of their jobs that were unproductive and thus, unnecessary. By flattening the organization and by removing unnecessary layers of bureaucracy, Welch liberated employees and empowered them to make decisions that affect their jobs, as well as the company as a whole. 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.

Welch encouraged an open communication. One of the first things he did to increase communication was to cut out all managers that simply gathered information from their subordinates and passed it up the line to senior management. Welch was used to going directly to the source when he wanted a question answered, so he did not want middle management standing in the way of such direct communication. By gaining such a great deal of access to personnel throughout the company, employees had the ability to perform their jobs much better and were motivated by their successes.

Jack Welch set an ultimate goal for all his employees - to achieve the above average performance. He believed that each person has a potential to enhance productivity. This idea made his employees more motivated and self-confident about what they were doing.

Thus, Welch was using a combination of such motivational techniques, as negative reinforcement, goal-setting, and behavioral self-management, by eliminating layers of employees that were unproductive, setting specific and challenging goals, and encouraging employees to participate in decision making and be open to new ideas.

2) Jack Welch has set goals to be number one in various markets. Assume that it's both a difficult and an assigned goal. What does goal-setting research say about the effect of such goals on performance?

According to the goal-setting theory, goals that are more difficult increase the level of performance, because it makes it clearer for an individual to understand his responsibilities. People feel engaged into reaching challenging goals and work harder, which improves productivity. At the same time, goals still have to be realistic and commensurate with employees' skills and abilities. It is also important that goals are specific and workers know what techniques to use in order to achieve



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