The Decline and Fall of General Motors

North Star Writers Group ^ | November 24, 2008 | Llewellyn King

[Invisigoth]

The seeds of decline are sewn when great corporations are at their zenith. It is then that they become bureaucratic and wasteful, and start promoting management based on committee approval rather than creative dynamics. At their peak, corporations are dismissive of creativity. Team players are valued over inventive mavericks. Consultants and systems are revered because they absolve managers of making hard decisions. The conditions for failure are thus assured.

Sometimes corporations disappear like the once dominant Pan American Airways, or they struggle on in diminished state like Western Union. Creative people leave companies when they suspect that the arteries are hardening, that management is more interested in its perks than in new products and services.

General Motors is in sorry shape because it was once in an invincible position: the most profitable and highly managed corporation in the world. At its apex, GM was regarded not only as a model of profitability but, under its legendary chairman Alfred P. Sloan, it also became known for its management and reporting structure. It was the first huge corporation to introduce complex reporting that measured everything from labor productivity to return on equity. These administrative controls were the work of a GM executive, Donaldson Brown, but they were often credited to Sloan himself.

[ken21]

there were articles in the 1970s in newspapers and since

concerning gm’s bloated and ignorant management.

[technically right]

Get a copy of “On A Clear Day You Can See General Motors” by John Delorean. Although Delorean portrays himself in the best light possible the book does provide a very good insight into the operations of GM in the 60’s, and 70’s. It was evident even then that GM was heading for the iceberg.

[USS Alaska]

I worked in the computer industry for almost 40 years and most of the companies I worked for have long since gone out of business.

Many were bought by larger companies and some went out of business but the reasons were always the same.

Greed and protectionism.

Senior management would make decisions that they knew were long term harmful for the company but short term would protect their little empire.

The attitude was, I'll get mine, screw the future.

The future is here and for GM and others it's time to pay the piper.