# kaal:claim:3808852-012

**Claim.** Organizational decentralization can raise economic performance without new technology: Jack Welch's separation of GE business units, each with its own profit-and-loss statement and full accountability, allowed efficient and profitable operation and GE's market value skyrocketed as a result.

**Type.** empirical  **Support.** evidenced

**Holds when.**

- pre and post internet era corporate structures

**Source quote.**

> Welch's method enabled each business unit to be run efficiently and profitably, while allowing unit heads significant flexibility and independence. GE's market value skyrocketed as a result of its decentralization of business units.

**From.** Wulf A. Kaal, *Decentralization and Feedback Effects* (2021), III. Organizational Decentralization, page 10

**Cite as.** Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852

**Verify.** sha256 of source PDF `31e91158fdeefebc2f0be54ebf89751f7cdd4c89ecea932888f5ba9be6b1caba` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202021%20-%20Decentralization%20and%20Feedback%20Effects.pdf

**Topics.** ai-and-agents, decentralization, institutional-design

**Keywords.** general-electric, business-unit-autonomy, accountability, organizational-decentralization

**Related claims.**

- extends: https://wulfkaal.github.io/claims/3411897-005

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