General Electric during the era of Jack Welch engaged itself in a number of ways that did create wealth while at the same time avoiding harm to the society. According to the case of study, Jack Welch ensured that the company did follow the regulations of the land. Furthermore, the company did enrich the society through grants to schools and other public institutions and the provision of employment to the communities around its area of operations. As such, the company did fulfill the definition given in chapter five regarding corporate social responsibility. On the other hand, the company had the capability of doing this in a better manner.
Jack Welch states that only healthy companies can benefit the society. With this statement, he justifies the massive wealth acquisition of the company without regarding the society. In case of PCB’s waste, the company would have portrayed better responsibility by accepting the effects of the products and offer cleaning the mess. In addition, though evaluation is necessary for the success of any company, the company failed to implement a system that was sensitive to human beings working for the company. Hence, though the company did make profits while in the confines of the law, it could have done this in a better way.
General Electric during the time of Jack Welch as the CEO would be a narrower expression of Friedman’s statement that the only social responsibility of a company is making profits. As far as the interest of the business is safe then other responsibilities will not be essential to a business. It was evident that during the time of Jack Welch, the company would protect its interest at all costs regardless of the repercussions. In the case of PCB poisoning, the decision makers were ready to poison their customers to increase profits for the company.
Many reports indicate that the company operated under the law. Loosely reported is that the company was too powerful and was able to twist the regulations to their advantage. An example is the fact that it would threaten counties and municipalities that it would relocate in case they maintained stringent rules. Hence, the interest of the company was not the society of its operations but its focus was to accumulate more wealth. Its employees were under suppression such that employees that were overweight had to hide lest they lose their jobs while others undertook surgeries. In accordance to this, it is clear that in deed has narrower view of the concept that was close to that of Friedman.
In some instances, the company portrays willingness to conform to the principles of social responsibility. On the other hand, it generally does not follow the general guidelines of the concept. According to the provision by the principle, each company will have to conform to the law of the land. The company opts to alter the laws in some cases casing a major division in the society. In addition, the list of violations on the part of the company is endless.
The only provision of the principle that the company did succeed in attaining is that being a profitable institution. In this era, the company did fail in meeting one of the most basic requirements of the principle, that of complying with rules and regulations that underlay the social contract. It is for this reason that the company faced litigations from its former employees. The intentions were to increase the revenues of the company thereby enriching the corporate employee of the company at the expense of others. As such, the company did not protect the interest of the society from its employees to the immediate community. This is evident from the fact that instead it tried to protect its PCB River poisoning.
Evident from the case of General Electric placing shareholders above employees will have benefits and demerits. One of the benefits is increased investor confidence of hence leading to an increase in the stock price of the company and reputation of the company. On the other hand, it leads to pressure and disregard of the employees. Placing stakeholders below the shareholders leads to reduced loyalty of employees and hence lack of conviction to propel the company to prosperity. In addition, it would result in constant conflicts with the society that could have negative impact on the country.
It is wrong for any company to view employees as mere costs of production. This leads to coming up with methods of reducing this cost without necessary taking into account the human aspect. General Electric under the guidance of Jack Welch made the decision of viewing human labor as only a cost of production leading to social responsibility failure and litigations. As such, the company should have come up with a balanced mode that considers both the profit of the company and the societal aspects of the stakeholders. Many regard Jack Welch as a model manager but reports indicates that his mode of leadership lead to a huge societal jeopardy.