Jack Welch is undoubtedly one of America’s most controversial and influential business leaders of the 20th century. During Welch’s 20-year reign as CEO of General Electric, from 1981 to 2001, the company underwent great change and saw immense growth and profitability, becoming one the most valuable companies in the world. Fortune magazine even hailed that under Welch, GE was “the best-managed, best-regarded company in America.” However, despite Welch’s strong leadership, the frequently debated question is, did GE fulfill its corporate social responsibility during his tenure. According to chapter 5 in the text, corporate social responsibility (CSR) is defined as, “the corporate duty to create wealth by using means that avoid harm to, protect, or enhance societal assets,” and by this definition GE under Welch failed to fulfill its duty of corporate social responsibility. While during the Welch era GE was successful in achieving a corporation’s primary economic responsibilities, generating immense profits, sharing the wealth with shareholders, and paying taxes, it did so in a way that did not protect societal assets, or avoid harm to the environment.

GE failed to fulfill its duty of CSR by causing environmental damage in areas where the company manufactured its products. The prime example of this is GE’s 35-year pollution of the Hudson River in New York. Between 1945 and 1977, GE is accused of releasing approximately 1.5 million pounds of a toxic substance known as polychlorinated biphenyls (PCBs) into the river. When confronted with the wide spread consequences of its actions, after scientific evidence linking PCBs to cancer and other illnesses was revealed, and a study conducted by The Environmental Protection Agency (EPA), concluded that dredging the bottom was necessary to remove the dangerous deposits, GE refused to accept responsibility for the pollution of the Hudson. Instead, to avoid the cost of clean up, the company sponsored studies to show that PCBs were not harmful to health, and undertook extensive public relations campaigns in the Hudson River region, to convince the public that dredging would be an ineffective nuisance. Though eventually GE lost to the EPA and dredging was ordered in 2001, the efforts and capital spent by GE in order to avoid accepting responsibility for its pollution of the Hudson show the company’s unwillingness to protect society from toxic substances and disregard for the environment. GE should have fulfilled its CSR duties by being more conscious of the impact its operations have on people and the environment and took responsibility for the consequences of their actions.

Another way of how GE under Welch did not fully fulfill its social responsibility is the company’s failure to protect societal assets. While GE did pay taxes that eventually benefited the society, and engaged in philanthropy and community activities, at the same time, the company engaged in activities that went against societal good. An example of this can be seen in GE’s conduct when it came to paying taxes. The company was known for pressuring the cities, counties, and states in which it operated to lower taxes by threatening to relocate operations, and this was often to the detriment of the local community. Further examples of GE’s failure in regards to protecting societal assets, are highlighted in the strategies executed by Welch in order to maximize GE’s profits, and transform the company into an industrial super power on a global scale. One of Welch’s first strategies to increase profit margins was the conducting of massive layoffs and plant closers. In a matter of only 5 years under Welch’s leadership, GE closed 73 plants, sold 232 businesses, and eliminated 132,000 workers from its payrolls. Another one of Welch’s strategies, which ignored societal good, and was focused only on his desire to cut the company’s costs, was the pressuring of suppliers to lower prices. This pressuring of suppliers by GE had far-reaching consequences that affected Americans all through out the country. As companies followed GE in the pursuit to lower costs and began moving their facilities abroad to countries with lower wage markets, the end result was countless of U.S. jobs eliminated. Eliminating jobs and influencing other companies to do the same just to increase profits, show how GE under Welch applied social responsibility in a manner that favored its business, while completely lacking concern for the protection of societal assets.

All in all, it is clear that under Jack Welch’s leadership GE failed to fully fulfill its duty of corporate social responsibility. While GE was able to achieve its primary corporate objectives of making profit and satisfying shareholders financial interests, the company failed to do so in a way that protected societal assets or avoided harm to the environment. Furthermore, like every corporation GE was required to abide by corporation laws, civil and criminal laws in the countries it operates in, government regulations as well as, international laws. However, GE under Welch’s leadership failed to maintain business ethics in the course of its operations. This saw the company attract a long list of law violations, court-ordered remedies, and fines for various violations such as environmental damage, consumer fraud, and deceptive advertising, among others. Even when confronted with its wrong doings such as the release of PCBs into the Hudson River, GE failed to maintain ethical practices by refusing to accept liability for its actions and the costs of correcting them. This lack of interest on actions that achieved social responsibilities beyond the production of profits, and ensuring the achievement of economic goals, is the reason GE failed in fulfilling its duty of corporate social responsibility.