(FORTUNE Magazine) – MANAGING/COVER STORY 40 GE KEEPS THOSE IDEAS COMING It wrote the book on management. Now Jack Welch is rewriting it: Managers will forgo old powers -- directing and controlling -- for new duties helping groups think for themselves. He's betting his sterling name on the new policy. by Thomas A. Stewart

43 THE HARVARD OF CORPORATE AMERICA GE's Management Development Institute may look Ivy, but it's all business.

LOOKING AHEAD 50 HOW SECURE IS YOUR NEST EGG? Probably not as safe as you think. Jeopardizing your retirement kitty are less paternalistic employers, rising corporate bankruptcies, and poor personal planning. by Jaclyn Fierman

AUTOS 56 BMW AND MERCEDES MAKE THEIR MOVE In the big, tough, rich U.S. luxury car market, Germany's premier automakers are slugging it out with the upstart Japanese. It's all a prelude to war in Europe. by Alex Taylor III

60 HERE COME THE 1992 LUXURY CARS American, Japanese, German, and British automakers are rolling out the latest models for the upscale crowd. A Fortune Color Portfolio.

THE ECONOMY 64 THE NEW POWERS Recession always causes permanent shifts and makes some titans rise while others fall. Here's a guide to who won and who lost in America's most recent downturn. by Kenneth Labich

66 SHIFTING FACES IN THE POWER GAME

CORPORATE PERFORMANCE 69 COMPANIES TO WATCH Medical Care International has made a practice of speedy, cheap procedures done on an out-patient basis. by Ret Autry

Also: Tetra Technologies, VeriFone, Photronics.

MONEY & MARKETS 70 DO BANK MERGERS MAKE SENSE? A new wave of mergers could create U.S. banks that will dwarf today's behemoths and sprawl coast to coast. Don't expect borrowers and depositors to celebrate; they'll see bargains disappear in the 1990s. The $400 billion question: Can bankers manage what they create? by Gary Hector

COMPETITION 72 JAPAN'S SMART SECRET WEAPON It's a unique cost-management system, and it helps Japanese companies cut costs, undersell Western competitors, and beat them with new products. Like its famed quality philosophy, Japan's method stands Western practice on its head: First you decide how much customers will pay for a new product. Then direct your engineers and designers to meet that price. by Ford S. Worthy

INNOVATION 76 PRODUCTS TO WATCH Pepperidge Farms cooks up some more-wholesome goodies that pass the taste test (but don't ask us to swear off of Milanos and Brussels), Koss issues speakers for your computer, Sylvania has a bright idea, and more. by Stephanie Losee

TECHNOLOGY 78 BIOTECH FIRMS TACKLE THE GIANTS Traditional pharmaceutical companies once derided these startups as ''gene jockeys,'' but bold entrepreneurs using the biological sciences are turning drug development into a real horse race. The industry won't be the same. by Gene Bylinsky

DEPARTMENTS 4 EDITOR'S DESK 8 INDEX 12 NEWS/TRENDS How twenty-somethings view the economy, taking time off sets a good example in Japan, airline executives rate the airlines, home-delivery workouts, spawn of Genentech, con jobs, and more.

21 FORTUNE FORECAST Profits will fall in 1991, but if you can stand the wait, annual reports for 1992 will make for cheery reading. by Vivian Brownstein

25 PERSONAL INVESTING Picking your way through the stock market mine field to find companies that have high growth potential and will deliver. by Andrew Evan Serwer

Also: Riding Asia's top tiger, how to pick a winning bond fund, and Portfolio Talk with George Yeager of Yeager Wood & Marshall.

36 LETTERS TO FORTUNE

93 FORTUNE PEOPLE A body snatch at GM, the Postmaster and the S&L crisis, Hotel Sparta, and more. by Mark M. Colodny

94 ON THE RISE

97 OFFICE HOURS Tough times make bad chiefs worse. Ready for the idea of employee abuse? by Walter Kiechel III

99 KEEPING UP A number that says it all at the U.N., the great pulchritude plot, the hammering of Carl Icahn, and other matters. by Daniel Seligman

ABOVE: Jack Welch at GE headquarters in Fairfield, Connecticut. Photo by Joe McNally.

COVER: Photographer Peter Gregoire caught up with CEO Welch outside Crotonville, GE's Management Development Institute just north of New York City.