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Excuse my ignorance, but what happened to corporate America after Jack Welch (if not what you state in the second and third paragraphs)?

by tithe 3y ago

salawat 3y ago
Jack Welch is a bit of a notorious figure in business thinking. He and his adherents playbook were to enter a company, "trim fat" (layoffs), threaten those left with firing if they didn't manage to thrive with their now increased workload, and dumped the "savings" from "getting the juice out of the employees" back onto shareholders. All of that without regard to what it'd do to the long-term health of the company. His management ethos was sadly hailed in business schools for it's genius (for facilitating higher than average returns at a time when most companies operating sanely could only offer modest returns) even as it's fruits began to slowly poison the entire vineyard. What it effectively was was the solidification of short-term gains at all costs in the business zeitgeist for the next 4 decades.
piva00 3y ago
Expanding a little on what the sibling comment said, Jack Welch was also responsible for changing corporate thinking to prioritise shareholders above all else: workers, and society. Before Welch corporate had first a duty to its workers, providing good pension systems, training on (and for) the job, loyalty to employees by avoiding mass firing/layoffs even if it meant cutting other expenses and management salaries (or negotiating pay cuts across the board to whether a storm), taking good care of their workers as a principle; secondly a duty to society by providing and/or producing services and products that benefitted society, funding education to train a new batch of workers but also as a return to the society that created the foundations where the corporation sprung from; and thirdly to shareholders and investors. Welch took over GE and implemented his vision of what we now see as a corporation: trim the "fat" by cutting whatever is considered a cost at the moment, inverted the duties of corporate to prioritise shareholder value above workers and society, what we now see repeated ad nauseum as the only true responsibility of corporations (here on HN is a consistent mantra of the business types), and so on. GE is far away from the powerhouse of R&D from before mostly due to Welch's changes, those have trickled into becoming the zeitgeist of corporate thinking over time when many MBA programs simply adopted his methods as the right way to do business. In my opinion this thinking is what makes almost every contemporary corporation rotten in their cores.

Excuse my ignorance, but what happened to corporate America after Jack Welch (if not what you state in the second and third paragraphs)?

by tithe 3y ago

Excuse my ignorance, but what happened to corporate America after Jack Welch (if not what you state in the second and third paragraphs)?

salawat 3y ago

Jack Welch is a bit of a notorious figure in business thinking. He and his adherents playbook were to enter a company, "trim fat" (layoffs), threaten those left with firing if they didn't manage to thrive with their now increased workload, and dumped the "savings" from "getting the juice out of the employees" back onto shareholders. All of that without regard to what it'd do to the long-term health of the company. His management ethos was sadly hailed in business schools for it's genius (for facilitating higher than average returns at a time when most companies operating sanely could only offer modest returns) even as it's fruits began to slowly poison the entire vineyard. What it effectively was was the solidification of short-term gains at all costs in the business zeitgeist for the next 4 decades.

piva00 3y ago

Expanding a little on what the sibling comment said, Jack Welch was also responsible for changing corporate thinking to prioritise shareholders above all else: workers, and society. Before Welch corporate had first a duty to its workers, providing good pension systems, training on (and for) the job, loyalty to employees by avoiding mass firing/layoffs even if it meant cutting other expenses and management salaries (or negotiating pay cuts across the board to whether a storm), taking good care of their workers as a principle; secondly a duty to society by providing and/or producing services and products that benefitted society, funding education to train a new batch of workers but also as a return to the society that created the foundations where the corporation sprung from; and thirdly to shareholders and investors. Welch took over GE and implemented his vision of what we now see as a corporation: trim the "fat" by cutting whatever is considered a cost at the moment, inverted the duties of corporate to prioritise shareholder value above workers and society, what we now see repeated ad nauseum as the only true responsibility of corporations (here on HN is a consistent mantra of the business types), and so on. GE is far away from the powerhouse of R&D from before mostly due to Welch's changes, those have trickled into becoming the zeitgeist of corporate thinking over time when many MBA programs simply adopted his methods as the right way to do business. In my opinion this thinking is what makes almost every contemporary corporation rotten in their cores.