Concept of the Corporation: Difference between revisions

Revision as of 12:39, 3 March 2007

Revision as of 14:42, 1 June 2007

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In writing and researching the book, Drucker was given unprecedented access to General Motors resources. He was paid a full salary, he accompanied CEO [[Alfred Sloan]] to meetings, and he was given free run of the company.

Druckers interest wasn't focussed on the 'outside' of a company, but on the inside: he focussed in contast to his contemporaries on what happened inside a company to make it succeed or fail. Facinated by this question he studied management to find out what really made a business tick.

The book strongly praises General Motors for its vision in developing management techniques, programs, and infrastructure. Yet despite this praise, the company, and Alfred Sloan in particular, was disappointed by the book and even angered by some of the criticisms made by Drucker.

Until then mangement had been seen as a no-brainer: the CEO would simply give the orders, which others would follow. But Drucker was interested in the human interactions within a company, and more specific on what way a power structure, political environnement, information flow decisionmaking and managerial autonomy would contribute to succes.By shifting his focuspoint he was able to explain why General Motors was such a success.

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GM was very pleased with all Druckers work, until Drucker had the nerve to publish his book, Concept of the Corporation. The book strongly praises General Motors for its vision in developing management techniques, programs, and infrastructure. But GM interpreted the suggestions Drucker to decentralise the company in order to even become more succesful,as betrayal.

For Drucker this was completely unexpected: he found GM a great company, which he had even compared with the U.S. governement. Drucker used the term 'federal decentralization'to describe it, as he felt that a company should be organized in a number of autonomous businesses.Paralle to the way the U.S Governement gave power to the states, GM should give divisions its autonomy.

===External links===

* [http://www.johnkay.com/strategy/418 Article about Concept of the Corporation] by [[Financial Times]] columnist [[John Kay]]