General Electric is a mainstay among American business. It has been around for a long time, supplying America and the world its share of light bulbs, appliances, and more. Starting in the 1980’s and continuing for about twenty years, it was led by a CEO by the name of Jack Welch. He led GE with the simple mantra that one thing, and only one thing mattered: Maximizing earnings per share and increasing stock price, and he was ready to do whatever necessary to achieve this goal. The negative impact of such an approach to business is highlighted in this book, The Man Who Broke Capitalism.What this book sets out to do is expose Welch’s style of business leadership as one that isn’t suitable for the long term and for the most part, it succeeds. What the GE CEO did ran contrary to what was considered normal, ethical business practice when he took over GE. Most companies considered employees to be their greatest asset, but during Welch’s reign, he turned that idea on its head and was constantly looking for ways to eliminate jobs, regardless of the repercussions. He was more concerned about meeting and exceeding Wall Street expectations and had no real vision for the future.If you judge Welch’s style, as outlined in the book, based on expectations for shareholder gains, then what he did might make sense, even if it was less than ethical and quite damaging to employee morale and the communities in which GE had a significant presence. On one hand, he was cutthroat in his approach to running a company. He had no qualms at all when he came to his views that employees are disposable and he had no ethical issue with treating employees like a number. But on the other hand, his measures did achieve the goal of increasing shareholder value. He did increase the market cap of GE and he did turn it into the most valuable company in the world at one point.But like the book says, these short- term gains were just that and nothing more. GE is no longer the most valuable company in the world, not even close. The lack of investment in the company, distrust by employees, and other concerns have sent GE into a tailspin. This stock price, shareholder approach might have worked for a while, but it didn’t work long term. And almost every one of his proteges that went on to lead other companies ultimately failed. They quickly learned that this cost cutting, downsizing approach will not work in other businesses.Besides sending employees to the unemployment offices without any regard, this book also addresses other areas where GE overstepped its boundaries and where reform may be needed. Share buybacks is one. Another is dividend payments. These actions require enormous outlays of cash, which could possibly be put to use internally by increasing wages and benefits or by increasing research and development. The book seems to take the position that these are both bad ideas and should be curtailed. One solution suggested is to levy a tax on these actions. It will be interesting to see how the U.S. government handles this in the coming years.I like that the book points out the shortfalls of GE’s type of leadership. And I like that it points out how other companies, like pay pal, have taken a radically different approach; investing in their people and even raising pay so that the lowest paid individuals can still make a decent living. Whether this is a sign of things to come remains to be seen. One can only hope that the GE method is one for the history books and that business leaders can now see its shortfalls more clearly than before.GE isn’t quite the behemoth it once was. The company has stumbled upon hard times and many would say that the blame should be placed squarely on the leadership that was in place for the 1980’s and 1990’s. The Man Who Broke Capitalism is a good read for exposing this type of misguided leadership and showing that, other than benefitting large shareholders in the short term, it doesn’t bode well for any company over a longer span of time.