Ge Case Study
1. Corporate social responsibility is defined in Chapter 5 as the corporate duty to create wealth by using means that avoid harm to, protect, or enhance societal assets. Did GE in the Welch era fulfill this duty? Could it have done better? What should it have done?
I believe that Welch only fulfilled one portion of his corporate social responsibility duty. Financial results for GE show that Welch was very effective in directing a highly profitable company, but he did so at the expense of many of the employees of the business. Over the years, employees were assigned a ranking system comprised of 1’s, 2’s, and 3’s. Each year, the bottom ten percent of workers (ranked 3’s) were relieved of their duties at the company. In a few years, Welch fired one out of every four employees at GE. Laying off such a large part of the population likely devastated thousands financially. The financial stress on workers who were fired, coupled with the psychological effects from being let go had a serious impact on the lives of GE employees and their families.
GE harmed the environment by dumping harmful chemicals from their manufacturing plants into the Hudson River. The Environmental Protection Agency studied the river, and concluded that GE was responsible for the release of the toxins in the river. Eventually, GE paid approximately $460 million to dredge the river in 2001, but only after a media campaign arguing the validity of the EPA’s conclusion divided the Hudson River community. GE could have performed in a different way that could have been better and more socially responsible, and the company would still maintain its competitive advantage in the market. Instead of coming into the company with a “firing quota,” Welch could have evaluated employees and restructured the management hierarchy to include talented employees from other areas of the business. Employees with many years of experience should have been used to try and remedy employee productivity issues
I believe that Welch only fulfilled one portion of his corporate social responsibility duty. Financial results for GE show that Welch was very effective in directing a highly profitable company, but he did so at the expense of many of the employees of the business. Over the years, employees were assigned a ranking system comprised of 1’s, 2’s, and 3’s. Each year, the bottom ten percent of workers (ranked 3’s) were relieved of their duties at the company. In a few years, Welch fired one out of every four employees at GE. Laying off such a large part of the population likely devastated thousands financially. The financial stress on workers who were fired, coupled with the psychological effects from being let go had a serious impact on the lives of GE employees and their families.
GE harmed the environment by dumping harmful chemicals from their manufacturing plants into the Hudson River. The Environmental Protection Agency studied the river, and concluded that GE was responsible for the release of the toxins in the river. Eventually, GE paid approximately $460 million to dredge the river in 2001, but only after a media campaign arguing the validity of the EPA’s conclusion divided the Hudson River community. GE could have performed in a different way that could have been better and more socially responsible, and the company would still maintain its competitive advantage in the market. Instead of coming into the company with a “firing quota,” Welch could have evaluated employees and restructured the management hierarchy to include talented employees from other areas of the business. Employees with many years of experience should have been used to try and remedy employee productivity issues