Jack Welch - Corporate Social Responsibility

Jack Welch's leadership strategies are the main focus of "The Jack Welch Era at General Electric." Welch is commonly known as a "big-businessman" of his generation and he is the ex-chairman and CEO of General Electric. Welch did not come from a wealthy family which means all that he earned throughout his whole career was all earned on his own; his mother's teachings of hard-work did play some role in his success. Even though the reconstructing plan that Welch started was very beneficial (financially) for the company, it did not provide efficient results for the society. However, Welch did show some fairness for the employees under his strategies such as "the workout session." The workout session gave an opportunity to employees to speak their honest opinion about their managers. Employees were able to take out their frustration and also provide some suggestions which would make things better between managers and employees. Overall, even though his plan did well for the company, I believe it was very unfair for the society as a whole.

According to chapter 5 in the text, corporate social responsibility is the corporate duty to create wealth by using means that to avoid harm to, protect, or enhance societal assets and even though Welch made GE the most valuable company in the world, as the CEO, Welch failed to fulfill the duty of social responsibility. He failed to fulfill that duty because of the following: pollution in the Hudson River, job cuts in the United States, subcontracting with other employees from outside the company, subcontracting to other countries, a defective evaluation system, unfair pension funds for the retried employees, and criminality at GE.

Under Welch's leadership, environment was damaged at a large amount in the areas where the GE products were produced. Hudson River was heavily polluted by the GE; river was polluted by a large amount of PCBs. According to the EPA website, PCBs have been demonstrated to cause cancer, as well as a variety of other adverse health effects on the immune system, reproductive system, nervous system, and endocrine system. We can imagine how critical the situation would have been for our environment because according to the text, "for 35 years several GE manufacturing plants in New York released polychlorinated biphenyls (PCBs) into the Hudson River." Thirty five years is a large amount of time for consistently polluting a river. After the Environmental Protection Agency (EPA) looked in the river, they were able to figure out the possibilities which can help remove the PCBs from the river. EPA held GE liable for the expenses because after all, the GE was the one and only main cause of that pollution. But it was not as easy for EPA to take that money from the company, at first, the GE denied paying those expenses and hired some of the former government officials that they thought can help but after none of those ideas worked, they agreed to pay an estimate of $460 million for dredging. But once again, the fact that even after it was proven that the GE is the only cause of all that pollution, the company was still focused mainly on their personal profit makes my point even stronger that the GE under Welch's era failed to fulfill the duty of social responsibility.

In addition, I think Welch failed to fulfill that duty because his plan included huge job cuts. As mentioned in the text, "there were 404,000 GE employees before he took over the top management position, but only 313,000 left when he retired." If he was concerned about the duties of social responsibility at all, he would have kept a fair amount of local employees but instead, in order to decrease his company costs, he started subcontracting after laying off his workers. Subcontract is when a person outside of your company working for you under a contract at lower costs and for a short period of time. Policies were already unfair enough for the society but to make things even worse, Welch created a defective evaluation system which adds up to my reasons explaining why his polices were