Study the Jack Welch at General Electric case on page 147 of course text. "What are the pros and cons of ranking shareholders over employees and other stakeholders? Is it wrong to see employees as cos

In April 1981 John Francis “Jack” Welch, Jr., became chief executive officer of General Electric. He held the position for 20 years until retiring in September 2001. During that time, he transformed GE, turning a solidly profitable manufacturing company into an exceptionally profitable conglomerate dominated by service businesses. If you had invested $100 in GE stock when Welch took the reins and held it for 20 years, it would have been worth $6,749. Welch is lauded for his creative management style and became a national business hero. A fawning BusinessWeek article called him “America’s #1 Manager.” 1  Fortune magazine gushed that GE under Welch was “the best-managed, best-regarded company in America.” 2 Yet the intense, aggressive Welch made fortunes for GE shareholders using methods that had mixed impacts on employees, unions, com-munities, other companies, and governments. As a result, not everyone sees the GE performance as a model for corporate social responsibility. Upon Welch’s retirement, the Multinational Monitor, a progressive magazine founded by Ralph Nader, devoted an entire issue to making “The Case Against GE.” The lead editorial branded Welch as a corporate titan opposed to rules of society and said his actions were “disastrous” for workers and communities. 3 Did General Electric under Jack Welch carry out the full range of its duties to society? Did it fall short? Readers are invited to decide.

Most top executives come from backgrounds of wealth and privilege. Jack Welch is an exception. He was born in 1935 to working-class Irish parents in a small Massachusetts town. His father was a quiet, passive man who endured as a railroad conductor punching tickets on commuter trains. Welch’s mother was a dominating woman who caused her husband to wilt but instilled a powerful drive in her son. Welch was an outstanding student at the University of Massachusetts at Amherst and went on to get a doctor-ate in chemical engineering at the University of Illinois. After graduating, he started working at a GE plastics factory in 1960. His tremendous energy and ambition were very apparent. He was so competitive in weekend softball games that his aggressive play alienated co-workers and he stopped going. After one year, he threatened to quit when he got the same $1,000 raise as everyone else. His boss cajoled him into staying and as the years and promotions flashed by he never again wavered. As he rose, Welch exhibited a fiery temperament and expected those around him to share his intensity. He was blunt, impatient with subordinates, and emotionally volatile. He loved no-holds-barred discussions in meetings but frequently put people on the spot, saying, “My six-year-old kid could do better than that.” 4 With every promotion, he sized up his new staff with a cold eye and purged those who failed to impress him. “I’m the first to admit,” he says, “I could be impulsive in removing people during those early days.” This was just preparation for the big leagues to come. GE had a polished corporate culture reflecting the Eastern establishment values of its leadership over many decades. Welch did not fit. He was impatient, frustrated by the company’s bureaucracy, and lacking in deference. With this mismatch GE might have re-pulsed Welch at some point, but his performance was outstanding. Several times he got mixed reviews for a promotion, but because of exemplary financial results he was never blocked. In 1981 he took over as CEO of one of America’s singular companies.