The “#1 or #2; Fix, Sell, or Close” rule was one of the most memorable aspects of Jack Welch’s corporate strategy at GE. (Business units needed to achieve a #1 or #2 market share; if not, they had to fix, sell, or close the unit.) In the 1990s however, this rule was changed to focus on smaller (10%-15%) market share requirements but a requirement that business unit managers demonstrate significant growth potential. What impact did this change in corporate strategy have on the organization design of business units?
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