The Effective Executive

by Peter F. Drucker

As to Sloan’s decentralization of General Motors, it still stands—but it is becoming clear that it will have to be thought through again soon. Not only have basic principles of his design been changed and revised so often that they have become fuzzy beyond recognition—the autonomous automotive divisions, for instance, increasingly are not in full control of their manufacturing and assembly operations and therefore not fully responsible for the results. The individual makes of car, from Chevrolet to Cadillac, have also long ceased to represent major price classes the way Sloan originally designed them. Above all, Sloan designed a U.S. company; and though it soon acquired foreign subsidiaries, it remained a U.S. company in its organization and management structure. But General Motors is clearly an international company today. Its great growth and major opportunities are increasingly outside the United States and especially in Europe. It will survive and prosper only if it finds the right principles and the right organization for the multinational company. The job Sloan did in 1922 will have to be done over again soon—it will predictably become pressing as soon as the industry runs into a period of economic difficulties. And if not done over fairly drastically, Sloan’s solution is likely to become a millstone around GM’s neck and increasingly a bar to its