Case Analysis Assignment
Case 1
How Jack Welch runs General Electric (GE)
If leadership is an art, then surely Jack Welch, chairman and CEO of General Electric (GE) , has proved himself a master painter. Few have personified corporate leadership more dramatically. Fewer still have consistently delivered on the results of that leadership .For 17 years, while chief companies and their chieftains tumbled like dominoes in an unforgiving global economy, Welch has lead GE to one revenue and earnings record after another. “The two greatest corporate leaders of this century are Alfred Slaon of General motors and Jack Welch of GE,”says Noel Tichy, a longtime GE observer and university of Machigan management professor. “ And Welch would be the greater of the two because he set a new, contemporary paradigm for the corporation that is the model for the 21^st century.”
This business week case study describes the leadership talents and styles of General Electric CEO Jack Welch. It describes the personal characteristics that seem to make the Welch one of America’s greatest corporate leaders. The article also examines how Welch motivates and inspires people to be more creative and stretch their current capacity to perform. Read through this business week case study at www.mhhe.com/mcshanel 1 e and prepare for the discussion questions below.
Discussion Questions

1. What personal characteristics of Jack Welch are described in the business week case study that seem to represent his leadership competencies?
2. Jack Welch is always described as transformational leader. what evidences does this case study provide to support or weaken this view?
3. The romance perspective of leadership suggest that the leaders take more credit than they deserve for organizational success. Does the romance perspective seem to occur for Jack Welch at GE?

Case 2
Is It Unethical to Lie and Deceive During Negotiations?
It has been said that the whole notion of negotiation is built on ethical quicksand: To succeed, you must deceive. Is this true? Apparently a lot of people think so. For instance, one study found that 28 percent of negotiators lied about a common interest issue during negotiations, while another study found that 100 percent of negotiators either failed to reveal a problem or actively lied about it during negotiations if they were not directly asked about the issue.
Is it possible for someone to maintain high ethical standards and, at the same time, deal with the daily need to negotiate with bosses, peers, staff, people from other organizations, friends, and even relatives?
We can probably agree that bald-faced lies during negotiation are wrong. At least most ethicists would probably agree. The universal dilemma surrounds the little lies—the omissions, evasions, and concealments that are often necessary to best an opponent.
During negotiations, when is a lie a lie? Is exaggerating benefits, downplaying negatives, ignoring flaws, or saying “I don’t know” when in reality you do considered lying? Is declaring that “this is my final offer and nonnegotiable” (even when you are posturing) a lie? Is pretending to bend over backward to make meaningful concessions lying? Rather than being unethical practices, the use of these “lies” is considered by many as indicators that a negotiator is strong, smart, and savvy. When are evasiveness and deception out of bounds? Is it naïve to be completely honest and bare your soul during negotiations? Or are the rules of negotiations unique: Is any tactic that will improve your chance of winning acceptable?
Case 3
Emailing “Lazy” Employees
Imagine receiving the following email from your CEO: We are getting less than 40 hours of work from a large number of our EMPLOYEES. The parking lot is sparsely used at 8 a.m.; likewise at 5 p.m. As managers, you either do not know what your EMPLOYEES are doing or you do not CARE. In either case, you have a problem and you will fix it or I will replace you. :-{{
NEVER in my career have I allowed a team which worked for me to think they had a 40-hour job. I have allowed YOU to create a culture which is permitting his. NO LONGER. :-| The note (paraphrased) continues: “Hell will freeze over before any more employee benefits are given out. I will be watching the parking lot and expect it to be substantially full at 7:30 a.m. and 6:30 p.m. on weekdays and half full on Saturdays.
Questions
1. What impact would this message have on you if you received it?
2. Is email the best way to convey such a message?
3. What problems might arise if people outside the organization saw this email?
4. What suggestions, if any, would you make to the CEO to help improve communication effectiveness?
5. What conflict-handling style is this CEO using? What might be a more effective style? Why?
Case 4
Buggy Wars
Two friends and neighbours arrange to go into business together and then become bitter rivals: This is the story of Bob Bell and Michael Sharpe, who once lived just four houses apart on Oxford Street in Guelph, Ontario. Bell and Sharpe thought they had a good idea for a new business venture—a bicycle trailer—but the good idea turned into a long, sizzling struggle.
Bell invented the bicycle trailer. Shortly after coming up with the idea, he began to design and build the bicycle trailer in his garage. Once he shared his idea with Sharpe, both thought they could form a successful partnership by drawing upon each other’s expertise. Bell, an engineer by trade, would take on research and development; Sharpe, a former computer software sales manager and career manager, would focus on marketing. Sharpe put together the business plan—but before it was finalized, the deal fell apart.
The major point of conflict between Bell and Sharpe was royalties. Bell wanted to license the bicycle trailer design to Sharpe and collect a fee for each bicycle trailer produced. Sharpe wanted Bell to invest more in the venture and share the financial risk. However, Bell did not see any grounds for negotiation. Bell considered the bicycle trailer his idea. He had designed it, he had bought the materials to build it, and he had put in the time to develop the final product. When both parties hired lawyers and Bell demanded intellectual property rights, the great Canadian buggy war began.
Bell planned a slow, steady campaign, working from the basement of his home with one employee. He started selling his cargo trailer, the WIKE, at the local farmers’ market.
His goal was to sell 20 trailers the first year and 500 in the coming year. Bell continued his “go slow, get it right” campaign, selling locally and fine-tuning his trailer to carry children. However, he eventually decided that making every bicycle trailer himself was not a good strategy. By 2002, Bob Bell just wanted his life back. Meanwhile, Sharpe had his own grand plan. He established his new company, Greenways, mortgaged his home, took a bank loan, rented a factory, and hired five employees. Sharpe began mass production of his version of the trailer, the Wonder Wagon, which accommodated small children. He projected sales of 2500 nationwide for the coming year. By the spring of 1994, Sharpe was selling to big specialty retailers and Toronto’s largest sporting goods store. Later, bike shops across the country and two national retailers were selling his wagon. He was even a corporate sponsor in Vancouver’s Ride for Life.
So how did this end? Bell won the patent infringement case against Sharpe. Bell’s company has expanded to six different versions of the bicycle trailer. It also has a licensed manufacturer in China, from whom Bell collects royalties.
Sharpe eventually abandoned the whole buggy idea, and switched careers to . . . the fitness industry.
Questions
1. What were the sources of conflict between Bell and
Sharpe?
2. Which of the five conflict resolution techniques does each man prefer in handling his conflict? Is there another conflict resolution approach you would recommend? Why?
3. How would you have handled the conflict? How would your personality have affected your approach to resolving the conflict?
Case 5
Gourmet Foods Works on Employee Attitudes
Gourmet Foods is a huge grocery and drug company. It has more than 2400 supermarkets, and its Premier and Polar brands make it the fifth-largest drugstore company in North America. In a typical year, shoppers will make 1.4 billion trips through its stores. Gourmet Foods competes against tough businesses. Wal-Mart, in particular, has been eating away at its market share. In 2001, with revenues flat and profits falling, the company hired Larry Johnston to turn the business around.
Johnston came to Gourmet Foods from General Living Medical Systems. It was while he was at General
Living that Johnston met a training specialist named Roger Nelson. Nelson endeared himself to Johnston when the latter hired Nelson to help him with a serious problem. At the time, Johnston had been sent to Paris to fix General Living’s European division. The division made CT scanners. Over the previous decade, four executives had been brought in to turn the division around and try to make it profitable. All had failed. Johnston responded to the challenge by initiating some important changes—he made a number of acquisitions, he closed down inefficient plants, and he moved factories to Eastern European countries to take advantage of lower labour costs. Then he brought in Nelson to charge up the troops. “After we got Roger in,” says Johnston, “people began to live their lives differently.
They came to work with a spring in their step.” In three years, the division was bringing in annual profits of $100 million. Johnston gives a large part of the credit for this turnaround to Nelson.
What is Nelson’s secret? He provides motivation and attitude training. Here is an example of Nelson’s primary program—called the Successful Life Course. It lasts three days and begins each morning at 6 a.m. The first day begins with a chapter from an inspirational handout, followed by 12 minutes of yoga-like stretching. Then participants march up a hill, chanting, “I know I can, I know I can.” This is followed by breakfast and then a variety of lectures on attitude, diet, and exercise. But the primary focus of the program is on attitude. Says Nelson, “It’s your attitude, not your aptitude, that determines your altitude.”
Other parts of the program include group hugs, team activities, and mind-control relaxation exercises.
Johnston believes strongly in Nelson’s program. “Positive attitude is the single biggest thing that can change a business,” says Johnston. He sees Nelson’s program as being a critical bridge linking employees with customers: “We’re in the business of maintenance and acquisition of customers.” With so many shoppers going through his stores, Johnston says there are “a lot of opportunities for customer service. We’ve got to energize the associates.” To prove he is willing to put his money where his mouth is, Johnston has committed $10 million to this training. By the end of
2006, 10 000 managers will have taken the course.
They, in turn, will train all 190 000 Gourmet Foods “associates,” with the help of tapes and books.
Nelson claims his program works. He cites success at companies such as Allstate, Milliken & Co., and Abbott Labs. “The goal is to improve mental, physical, and emotional well-being,” he says. “We as individuals determine the success of our lives. Positive thoughts create positive actions.”
Questions
1. Explain the logic as to how Nelson’s three-day course could positively influence Gourmet Foods’ profitability.
2. Johnston says, “Positive attitude is the single biggest thing that can change a business.” How valid and generalizable do you think this statement is?
3. If you were Johnston, what could you do to evaluate the effectiveness of your $10 million investment in Nelson’s training program?
4. If you were a Gourmet Foods employee, how would you feel about going through Nelson’s course? Explain your position.
Case 6
The Dennis Kozlowski story could be titled “The Good, the Bad, and the Ugly.” The good: As CEO of Tyco International, Kozlowski oversaw the growth of a corporate giant. At its peak, Tyco was gobbling up 200 companies a year. Under his leadership, the value of Tyco increased 70-fold. In 2001,
Kozlowski proclaimed his desire to be remembered as the world’s greatest business executive.
The bad: Things turned sour when Kozlowski and his former chief financial officer were accused of running a criminal enterprise within Tyco. The two were charged with stealing $170 million (US) directly from the company and pocketing an additional $430 million through manipulated sales of stock, and found guilty in June 2005.
The ugly: Kozlowski’s actions almost destroyed the company where he worked for 27 years. In 2002 alone, the value of the company’s stock dropped $90 billion!
To understand Kozlowski’s behaviour, we should look at the events that shaped his personality. He spent his early years in humble circumstances. He grew up in the 1950s and 1960s in Newark, New Jersey. He said he was the son of a Newark cop turned police detective. Only after he was indicted did it come out that his father was never a police officer in Newark or anywhere else. However, his mother did work for the Newark Police Department as a school crossing guard. His father, in actuality, was a wheeler-dealer who was a practised deceiver and an effective persuader. He had a strong personality but, for the most part, kept his misdeeds to little white lies. Friends remember Dennis as an easygoing kid who did well in school without trying very hard. He was elected “class politician” by his high school graduating class in 1964. He went to
Seton Hall, paying his way through college by playing guitar in a band. He served in Vietnam, held a few accounting jobs, and eventually joined Tyco in 1975.
Over the course of the 1980s, Kozlowski’s happy-golucky demeanor disappeared. As he climbed the ladder at
Tyco, he became a corporate tough guy, both respected and feared. He eventually become CEO in 1992 and oversaw the rapid expansion of the company.
Meanwhile, Kozlowski learned to live big. He had a $17 million apartment in New York, a $30 million mansion in Florida, and a $15 million yacht. He spent $20 million on art for his luxury homes. He took extravagance to the extreme—for instance, spending $6000 on a shower curtain! The more he made, the more he spent—and the more he allegedly stole. Although his total compensation was
$170 million in 1999, it was not enough. He manipulated the company’s employee relocation fund and Key Employee
Loan Program (the latter created to help executives pay taxes due on stock options) to take hundreds of millions in interest-free funds. In 2001, for instance, he gave his wife $1.5 million to start a restaurant, spent $2.1 million on a birthday party in the Greek Islands for his wife, and gave away $43 million in corporate funds to make philanthropic contributions in his own name.
A former Harvard professor suggests Kozlowski was undone by a rampant sense of entitlement: “By entitlement
I mean an aspect of a narcissistic personality who comes to believe that he and the institution are one” and thus “that he can take what he wants when he wants it.”
Questions
1. How did Kozlowski’s past shape his personality?
2. Does this case contradict the view that personality is largely genetically derived? Explain.
3. What does this case say about corporate ethics?
4. In the movie Wall Street, Michael Douglas’s character says, “Greed is good.” Is this true? How does this apply to Kozlowski?
5. “Kozlowski just did what anybody would do if they had the chance. The people at fault in this story are
Tyco’s Board of Directors for not controlling their CEO.” Do you agree or disagree? Discuss.