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Alfred Sloan

Life

Alfred P. Sloan Jr. (1875–1966) was an American business executive who revolutionized corporate management as president (1923–1937) and chairman (1937–1956) of General Motors. Born in New Haven, Connecticut, he earned an electrical engineering degree from MIT in 1895. Sloan joined Hyatt Roller Bearing Company in 1899, which later merged into General Motors in 1916. Under his leadership, GM surpassed Ford to become the world's largest automaker by implementing revolutionary organizational and marketing strategies.

People Who Influenced Their Thought

  • Pierre S. du Pont: Du Pont's financial control systems at DuPont Chemical inspired Sloan's accounting reforms at GM.
  • Frederick Taylor: Taylor's scientific management principles influenced Sloan's efficiency-focused production methods.
  • Henry Ford: Ford's assembly line innovation motivated Sloan's competitive "a car for every purse" strategy.

Main Ideas and Publications

  • Divisional Structure: Created GM's decentralized operating divisions with centralized financial control (implemented 1920s).
  • My Years with General Motors (1963): The seminal management autobiography detailing his corporate innovations.
  • Annual Model Changes: Institutionalized planned obsolescence to drive consumer demand (1920s).
  • Market Segmentation: Developed GM's multi-brand strategy (Chevrolet to Cadillac) to cover all price points.

Controversies around his main work or thought

  • Over-engineering Criticism: John Kenneth Galbraith argued Sloan's system created unnecessary product complexity and wasteful consumerism.
  • Labor Relations: United Auto Workers leaders like Walter Reuther criticized Sloan's resistance to unionization during the 1936-37 Flint Sit-Down Strike.
  • Financialization Critique: Later management theorists argued Sloan's focus on financial metrics over engineering excellence contributed to GM's later decline.

Key People Influenced by Their Thought

  • Peter Drucker: Called Sloan's GM "the most successful corporation in history" and based much management theory on his work.
  • Jack Welch: Adapted Sloan's decentralized model at General Electric in the 1980s.
  • Robert McNamara: Applied Sloan's quantitative management approach at Ford and the Pentagon.

Legacy

Alfred Sloan created the blueprint for the modern multidivisional corporation while transforming GM into a global industrial powerhouse through innovative organizational design and marketing strategies. ```