Alfred Sloan joined General Motors as a director and vice-president in
1918 and became president and chief executive officer in 1923, and Chairman in 1937. From
1956 until his death in 1966 he was honorary Chairman of the corporation. During his
period as chairman he was the highest paid business executive and ran the largest business
in the world.
It was in 1963 that he published his famous book My years with General
Motors. This set out in detail how General Motors developed over the decades covered by
his administration and was a complete and thorough analysis of the forces impacting on
General Motors, the outcomes they achieved and the thinking behind their many
ground-breaking innovations.
Sloan's unique contribution to organisational development was the
decentralised divisional structure and the use of financial controls.
Decentralisation led to the formation of autonomous vehicle divisions
(Chevrolet, Pontiac, Buick, Oldsmobile, Cadillac, GM Truck) which persist to the present
day. The challenge then as now was to find a balance between centralised and decentralised
management authority and responsibility. The compromise sought by General Motors was to
give the divisions wide ranging powers but to maintain central oversight by use of
co-ordinating committees. It has been argued that this committee system was partly
responsible for General Motors early failures to respond effectively to the growing
Japanese threat. |
