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‘My Years with General Motors’, Fifty Years On by Sloan
The General Motors under Sloan’s management realized remarkable achievements that seemed impossible from the onset and was least expected from the company during that challenging period. General Motors was in a serious mess during the 1920s when Sloan took over the leadership and management responsibility at the company. This followed the fact that Mr. William Durant, the founder of the General Motors, created a corporation by simply cobbling together dozens of smaller engines as well as part manufacturers, which has logic. The problem of General Motors was made worse with the fact that none of the company’s products was competitive enough in the industry fairly to compete with the already established manufacturers such as Ford Motors both on price and quality. The T-model cars produced by Ford Motors were relatively affordable and of high quality, thus making them be preferred over General Motor’s products that were of low quality and highly priced. Given the stiff competition from other established car manufacturers in the industry, the General Motors continuously incurred losses, thereby losing money and was unable to operate in the industry. The General Motors was, therefore, on the brink of collapsing as it was not able to break-even in this highly competitive industry and only needed some miracles to rescue the company from liquidation and bankruptcy.
In a period of slightly more than a decade after Sloan had taken over the management of the General Motors, each of the General Motors’ product was turning profitable, the miracle of the decade. Sloan made changes to the management policy and philosophies at General Motors that changed the face of the company in the 1930s. From the verge of collapsing, the General Motors established itself as a leading premier automaker globally as well as becoming the U.S’s largest single employer; what a remarkable turnaround from the GM. Sloan transformed the GM to a profitable and leading employer through major changes in the organizational mastery with little engineering breakthrough, the alternative that much thoughts was the only feasible and sustainable alternative of reviving the collapsing General Motors. Although Ford still manufactured some of the best automobile engines for the money, the GM trounced other manufacturers including Ford Motors as it produced the market’s best product lines. It was after these changes in the organizational and management mastery that the company made a breakthrough in the automobile industry and has since then dominate the industry, competing fairly with other manufacturers in the industry. There is no doubt that Sloan’s appointed as the CEO of GM was the beginning of a brighter future for the GM and its stakeholders, despite the fact that Sloan had little management experience in the automobile industry. As at 1960, the GM provided employment to over 500,000 globally, making it the leading employer in the world.
Despite the changes in the organizational leadership and theories at GM under the leadership of Sloan, a number of lessons can be learnt from the revolution of GM. The book “My Years at General Motors” clearly points out the strategies of realizing success in a competitive industry through relentless and obsessive organizational permutations. The book reveals the management strategies and approaches of building as a competitive organization in a competitive and compelling business environment. One of the fundamental messages that managers can learn from the success story of Sloan at the GM is the identification of the market gap. Alfred Sloan succeeded by capitalizing on Ford’s mistakes. Ford, in its single-minded theory, only focused on the value for money as its main marketing strategy. Having in mind that it was difficult beating Ford in the game Ford has specialized in, that is the Model T cars, Sloan opted for an alternative to this model that would meet the demands and needs of the uncovered customers. Acting on his dream of creating a “car for every purpose and purse,” Sloan introduced model changes by bringing in Hollywood designers to help in designing and shaping new cars such as Fortune. This revolutionized the car industry in the U.S and increased competitiveness of the automobile sector that was once dominated by Ford. The new car models increased the efficiency and reduced the cost of owning a car in the U.S. However, it is worth noting that this success was founded on a big dream that Sloan had. Therefore, a successful management and leadership start with having a vision and dream for success. Modern managers should have dreams and visions if they are to succeed.
The other success factor behind Sloan at the GM was his ambition to succeed and overcome the odds. This was evidenced by his consummate organization-builder ability. This trait was evidenced by the move taken by Sloan to restructure the GM into functional and active multidivisional units and segments. Through the market segmentation, Sloan engineered the production of automobile engines that are market tailored. The market segmentation created room for price differentiation, hence the production of both low-priced and high-priced cars. Therefore, the managers of today should equally learn to understand the demands of their customers and produced products taking into account the income variations of the potential consumers.
