One of the example that he did was “In his early years, he helped GE Plastics explode from a $28 million after-thought into a billion dollar business. (Answer) Promoting personally from the internal organisation will have its positive effects, as they will have known the organisation structure, culture and also the employees’ working attitudes and behaviour towards their job and the organisation. And will have the awareness of what is the current problem of organisation is facing and the cause of it. Which can be shown by Jack Welch decided to quit due to “frustrated by the organisation’s bureaucracy…” (Answer). This could save the time of finding out of the current practices, culture and procedures of the organisation.
And know which of the manager of the organisation can entrust. This provides a morale boast to the front line employee who is suffering from the current situation; a mutual understanding will be form between the employees and the new CEO as they might have worked together before. Knowing the structure of the organisation inside out, will let the new CEO to know which part of the structure is in flaw and require fixing whether it is the corporate between two departments of within the department itself or even the flow of process a project or working procedure.
With the time spent in the organisation, the CEO will have known the culture of it like; knowing the time of employee’s lunch hour and tea break sessions. He will be able to make necessary changes to it to boast the productive of the worker. And knowing the employees’ working attitudes caused by the culture, for example a manager picking on every small mistake and carry heavy punishment will cause the employee to work in fear and lower morale which lead to lower productive.
With the knowledge of problems that is causing the organisation to function poorly, the internal promoted CEO, he will know who he can entrust to do fix the problem and knowing which products/services that organisation manufactured/provided are with flaws. As an insider of the organisation, the CEO will have known that the weakness of the product and will able to cut off the production and switch the organisation focus on other type of product. Which is something, as a CEO hired from other place, cannot carry such actions.
As this is will because chaos will break out in the organisation, as this will give a feeling or message to the employee that they will lose the sense of belonging to the work as they will feel that they don’t have the skill or knowledge to cope with it. As for the promoted CEO from within might have problem to create a revolution for the organisation as he might have a fix mind set of following the currents culture and structure, which will only make the situation more worse as the employee will not able to see any changes in their work regards for better or worse.
As CEO is hired from other organisation, this will bring in a different view and will able to bring in other organisation strengths to help improve the current situation of the organisation. The new CEO will not bind down with the relationship of the current staff and thus he will not hesitate to replace the current staff with the more capable new staff. This will give a clear message to the current staff to change their working attitude towards their job. With new top management, this will change the culture of the organisation might have a positive effect as changes is for the good.
However, by bringing new culture or replacing with new staff, this might have a side effect on the organisation, as the current staff might felt left out and the suddenly change to culture can create new problem as the current staff might not able to cope with it. An internal leadership will prove a better solution for the organisation that is going for a change. As this shorten the process of understanding the organisation and pointing out problem faster than a CEO hired from other organisation.
And also they are more accurately to identifying the correct person with their hearing from others. With the case of Jack Welch, he was able to turn one of the GE’s business from million to billion worth. “An internal placement could result in multiple inside promotions. ” (Sullivan 1999) Since there is an open slot for promotion, as people are moving up, this can serve as a reason for people to show what they can do for the organisation. Thus improve the organisation productive.