Overly rational and profit-driven orientation According to O'Toole (1995), Sloan built a very objective organization, one that paid significant attention to "policies, systems, and structures and not enough to people, principles, and values. Sloan, the quintessential engineer, had worked out all the intricacies and contingencies of a foolproof system." But this system left out employees and society. One consequence of this management philosophy was a culture that resisted change. Proof that the system did not remain foolproof forever was seen in GM's problems of the 1980s, 1990s, and 2000s. In fact, Sloan's memoir and management treatise,
My Years With General Motors, As these words of Sloan (1964) show in juxtaposition with the words of
Peter F. Drucker (1946), Sloan (and his fellow GM executives) never agreed with the lessons Drucker drew from his study of GM management during the war. But unlike many GM executives, Sloan did not put Drucker on his blacklist for writing the 1946 book; Drucker, in his new introduction to the 1990 republishing of Sloan's memoir, said, "When his associates attacked me in a meeting called to discuss the book, Sloan immediately rose to my defense. 'I fully agree with you,' he said to his colleagues. 'Mr. Drucker is dead wrong. But he did precisely what he told us he would do when we asked him in. And he is as entitled to his opinions, wrong though they are, as you or I. Drucker related that for 20 years after that meeting, Sloan and Drucker had a good relationship, in which Sloan invited Drucker to lunch once or twice a year to discuss Sloan's philanthropic plans and the memoir Sloan was working on (what became
My Years). Drucker said, "He asked for my opinions and carefully listened—and he never once took my advice." O'Toole described Sloan's style as follows: "[W]hereas
Taylor occasionally backs off to justify his ardor for efficiency in human terms, not once does Sloan make reference to any other values. Freedom, equality, humanism, stability, community, tradition, religion, patriotism, family, love, virtue, nature—all are ignored. In the one personal element in the book, he makes passing reference to his wife: he abandons her on the first day of a European vacation to return to business in
Detroit. His language is as calculating as that of the engineer-of-old working with calipers and slide rule, as cold as the steel he caused to be bent to form cars: economizing, utility, facts, objectivity, systems, rationality, maximizing—that is the stuff of his vocabulary." Essentially, the criticism is that by using Sloan's methods a company will value inventory just the same as cash, and thus there is no penalty for building up inventory. Sloan was far from the sole author of GM's financial and accounting systems, as GM later had many trained minds in accounting and finance; but regardless of authorship, GM's financial controls, at one time considered top-notch, eventually proved to have latent drawbacks. Systems similar to GM's were implemented by other major companies, especially in the United States, and they eventually undermined the ability to compete with companies that used different accounting, according to Waddell & Bodek's 2005 analysis. indicates that Sloan and GM appreciated the financial dangers of excess inventory even as early as the 1920s. But Waddell & Bodek's 2005 analysis During the war, GM's Opel Brandenburg facilities produced
Ju 88 bombers,
trucks,
land mines and
torpedo detonators for Nazi Germany. Sloan's memoir presents a different picture of Opel's wartime role. According to Sloan, Opel was
nationalized, along with most other industrial activity owned or co-owned by foreign interests, by the German state soon after the outbreak of war. But Opel was never factually nationalized and the GM-appointed directors and management remained unchanged throughout the Nazi period including the war, dealing with other GM companies in Axis and Allied countries including the United States. Sloan presents Opel at the end of the war as a black box to GM's American management, an organization with which the Americans had had no contact for five years. According to Sloan, GM in Detroit debated whether to even try to run Opel in the postwar era, or to leave to the interim West German government the question of who would pick up the pieces. Defending the German investment strategy as "highly profitable", Sloan told shareholders in 1939 that GM's continued industrial production for the Nazi government was merely sound business practice. In a letter to a concerned shareholder, Sloan said that the manner in which the Nazi government ran Germany "should not be considered the business of the management of General Motors. ... We must conduct ourselves as a German organization. ... We have no right to shut down the plant." ==Postwar==