Management by the numbers
Alfred Sloan was the first to manage decentralised divisions 'by the numbers'. He
demanded detailed reports on a variety of measures (e.g. revenue, market-share, inventory,
costs, etc.) and made these numbers the subject of management reviews.
New professions - finance and marketing - were developed to work alongside
production, each had its own measures to work to.
Working this way solved the problem that Sloan was confronted with - how
to create order in a seemingly complex group of organisation structures. It was not
apparent at that time that `working to the numbers' would itself be a cause of sub-optimisation.
See: Attention to output. |
