General Motors' Alfred Sloan Was Driven To Succeed

[Slowrider5]

It's amazing the ideas this man had back in the early 1900's...........things that many companies today still can't seem to implement.

Even in the middle of a great expansion at General Motors (NYSE:GM) GM, Alfred Sloan looked beyond the results.

Sloan joined the company as a vice president in 1918. In 1919-20, GM almost doubled its production of cars and trucks from the level of 1917-18.

"I had been struck by the disparity between substance and form: plenty of substance and little form. I became convinced that the corporation could not continue to grow and survive unless it was better organized," Sloan wrote in "My Years With General Motors."

Financial controls were lacking. In October 1920, purchases of raw and semifinished materials exceeded the budget for them by $59 million.

The bill of disorganization came due as 1920 came to a close. "The task before General Motors was reorganization," Sloan wrote. "As things stood, the corporation faced simultaneously an economic slump on the outside and a management crisis on the inside."

It was up to Sloan, vice president in charge of operations, to come up with a reorganization plan. He believed that because American industry hired people from a common pool of technology, the variable was management. And the best management was decentralized.

"From decentralization we get initiative, responsibility, development of personnel, decisions close to the facts, flexibility -- in short, all the qualities necessary for an organization to adapt to new conditions," Sloan said.

He set out to develop an organizational structure that was coordinated from a strong central office without losing the advantages of decentralized management. "I would say that my concept of (management) of a great industrial organization, simply expressed, is to divide it into as many parts as consistently can be done, place in charge of each part the most capable executive that can be found (and) develop a system of co-ordination," Sloan wrote in "Adventures of a White Collar Man," with Boyden Sparkes.

The first year of reorganization was 1922. GM sold 457,000 vehicles vs. 215,000 the year before and netted a $61 million profit. The next year, 800,000 vehicles were sold and GM saw an $80 million profit.

More at link:
http://money.cnn.com/news/newsfeeds/...1-20044164.htm

[CobaltSScrazy]

gosh, and now toyota is the largest automaker (corporation?) in the world. sigh, ahh the glory years of General Motors. I wish I could have experienced them, and the pride in owning vehicles made then. I feel like today, you only get that feeling from toyota, honda, bmw, and MB.

I hope we all get that feeling back w/ domestic automakers instead of thinking they all make ****. its such garbage.

CobaltSScrazy

[LeSabre]

Alfred Sloan was a visionary. GM, Ford & Chrysler should learn from what he did way back then. Seems like some or most if not all of what Sloan did to improve GM cars of the day could still work today. GM is on its way, but there is still much room for improvement. Ford & Chrysler have a long road ahead of themselves.

[Bravada]

Nope, what Sloan did to put GM in gear back then is now hampering GM (and to and extent other stale corporations ran that way). GM just slept through as the business world moved. What Sloan did were some of the most simple things (remember he took a conglomerate that was still little short of a huge business scam cobbled together by W. Crapo Durant) - they all do work and that's how you now do things. But today, to succeed, you need much more than that - and your competitors know that!

[LeSabre]

Well, ok, so I was wrong a bit. Still some of his ideas, though modified could be of use still in todays auto-business world, ya think?

[Bravada]

They are, but it's like Isaac Newton's physics in today's post-Einstein, post-Bohr quantum physics. You can't go anywhere without Newton, but you need so much more than that!

Though actually, contrary to physics, in business administration/management some newer theories make older totally obsolete, so some of Sloan's thinking should not be applied to modern businesses anymore.

I could go about it for ages, but I guess nobody would really want to listen, and I am not getting paid for that anyway