Pioneering 'Select and Concentrate' Management
John F. Welch, Jr. introduced the "select and concentrate"
management style that has transformed GE into a preeminent global
business group. The concept revolves around aggressive M&A activity
and the sale of selected divisions. His ideas led to the approach
of concentrating management resources on core competencies, a
necessity now facing Japan's corporate sector.
Soon after becoming CEO in 1981, Mr. Welch carried out several
mergers/acquisitions and divestitures in rapid succession: GE
acquired NBC, one of the three U.S. networks, to diversify into
broadcasting, while selling its TV and VCR manufacturing operations.
These moves often involved layoffs and more than once were the
target of harsh criticism. But during the 18 years up to 1998,
GE quadrupled sales and expanded net profit by a factor of six.
There is little doubt that the leadership of Mr. Welch is a driving
force behind GE's continuing success as a highly profitable company.
Mr. Welch is committed to constant change and this spirit is
reflected in his management slogans and the way in which they
cleverly take on lives of their own. The "Number One Number Two
Strategy" is based on the belief that businesses which are not
one of the two top firms in their industry should be rebuilt,
closed down or sold off. "Work-Out," another well-known Welch
strategy, calls for spreading change throughout the whole organization.
Mr. Welch, 63, received a B.S. in chemical engineering from the
University of Massachusetts in 1957. He earned a Ph.D. in chemical
engineering from the University of Illinois in 1960.
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