Summary of David Gelles's The Man Who Broke Capitalism

Everest Media

Description

Please note: This is a companion version & not the original book.
Sample Book Insights:
#1 In 1980, Ronald Reagan was elected president with the slogan Let’s Make America Great Again. The new president’s economic policy, Reaganomics, prioritized lower taxes, decreased regulation, and a favorable attitude toward Wall Street.
#2 When Welch took over as CEO, he was very different from Jones. He was impatient, impulsive, and crass. He spoke with a thick Boston accent, and when he grew angry, a stutter flared up. He loathed hierarchy and bureaucracy, and didn’t care what people thought of him as long as he was making money for the company.
#3 In the mid-1970s, Welch went on tour with a GE joint venture in Japan, where he was shocked by the manufacturing process. When America’s standing in the world was questioned in 1980, Welch and Jones wrote a letter to shareholders acknowledging the need for urgent change.
#4 Jack Welch, the iconic chairman of GE, drastically overcorrected when he took over. He abandoned American manufacturing and began shutting down factories around the country.

Sujets

• Business History
• Corporate History
• Economics
• Business

Informations

• Publié par: Everest Media LLC
• Date de parution: 23 juillet 2022
• Nombre de lectures: 0
• EAN13: 9798822546912
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

Insights on David Gelles's The Man Who Broke Capitalism
Contents Insights from Chapter 1 Insights from Chapter 2 Insights from Chapter 3 Insights from Chapter 4 Insights from Chapter 5 Insights from Chapter 6 Insights from Chapter 7 Insights from Chapter 8
Insights from Chapter 1

#1

In 1980, Ronald Reagan was elected president with the slogan Let’s Make America Great Again. The new president’s economic policy, Reaganomics, prioritized lower taxes, decreased regulation, and a favorable attitude toward Wall Street.

#2

When Welch took over as CEO, he was very different from Jones. He was impatient, impulsive, and crass. He spoke with a thick Boston accent, and when he grew angry, a stutter flared up. He loathed hierarchy and bureaucracy, and didn’t care what people thought of him as long as he was making money for the company.

#3

In the mid-1970s, Welch went on tour with a GE joint venture in Japan, where he was shocked by the manufacturing process. When America’s standing in the world was questioned in 1980, Welch and Jones wrote a letter to shareholders acknowledging the need for urgent change.

#4

Jack Welch, the iconic chairman of GE, drastically overcorrected when he took over. He abandoned American manufacturing and began shutting down factories around the country.

#5

General Electric was a company that Welch wanted to blow up. It was the culmination of nearly a century’s worth of innovative engineering breakthroughs and careful financial stewardship. The devices they invented and commercialized ushered in modern life as we know it.

#6

During the 1920s and 30s, Gerard Swope, the chief executive of GE, practiced what he called welfare capitalism, using the company’s vast resources to take exceptional care of its employees.

#7

The Golden Age of Capitalism, which lasted from the postwar boom to the stagflation of the 1970s, was characterized by many great American employers.

#8

In the Golden Age, companies were not just talking a good game; they were actually sharing their profits with their employees. From 1948 to 1979, worker pay grew alongside worker productivity.

#9

During this period, America’s middle class grew, consumer spending increased, and many new companies were founded, which created more jobs.

#10

Jack Welch was a restless, argumentative person who was well suited for an increasingly competitive economy. He learned how to throw his weight around and developed a reputation as an aggressive athlete. He was not blessed with a lot of grace or athletic ability, but he trounced people by trying harder.

#11

Welch had a Darwinian attitude towards business, believing that the best teams came from differentiation, rewarding the best and removing the weakest. This attitude sometimes led him to push GE to the limits.

#12

Welch was now in the race to succeed Jones, but he was hardly the obvious choice. Other, more conventional candidates were presumed to be front-runners. Welch’s mettle was tested when he was given the responsibility of planning the company’s expansion into appliances. He decided to cut costs by layoffs.

#13

Jack Welch, who had been hired to cut costs, became enthralled with the finance division of the company he took over in 1977. He began boosting the division’s staff and looking for ways to grow it.

#14

Welch was shocked to hear that Jones had taken such a critical stance toward him. He felt that he had won over the crowd, and thought Jones was being prudish.

#15

Welch’s speech in 1980 announced a new era for GE, one defined not by electric light bulbs, but by quarterly earnings. Welch envisioned a world where companies were either dominating their industry or sliding into irrelevance. He wanted GE to be the most competitive enterprise around.

#16

Welch’s speech was a flop. The analysts were expecting a conventional update on how GE’s various businesses had performed over the past year, not some grand new philosophical framework.

#17

The 1970s saw the birth of the modern corporate culture, as Friedman’s New York Times essay and Powell’s speech to Southern businessmen became the intellectual justification for a wholesale rewriting of the social contract.

#18

The idea that companies exist solely to enrich their shareholders continued to gain traction throughout the 1970s. In 1976, two professors wrote a paper that radically transformed the way executives thought about their responsibilities. They argued that CEOs should be richly rewarded with stock to align their own incentives with their company’s financial performance.

#19

The Powell memo began to come alive in the 1980s, as companies began to act in the best interests of only their shareholders. Rather than look out for the well-being of all their employees, companies were now allowed to cast them aside in the name of better margins.