My Years With General Motors by Sloan - Book Report/Review Example

Running Head: My Years with General Motors My Years with General Motors Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 21 June, 2012 My Years in General Motors’ by Alfred P. Sloan Jr. is one of the most inspiring and well written classic business books I have ever read. In my own opinion, Bill Gates’ tribute on the cover page of this book is very appropriate. According to Bill gates, “My Years with General Motors is probably the best book to read if you want to read only one book about business. The issues [Sloan] dealt with in organizing and measuring, in keeping [other executives] happy, dealing with risk, understanding model years and the effect of used vehicles, and modelling his competition all in a very rational, positive way is inspiring” (Sloan, 1990). After reading this book, I could not help but concur with Bill Gates’ opinion. This book is divided into two sections and in my own opinion; the first section discusses General Motors evolution with respect to the development of basic management concepts. On the other hand, the second section of the book, which starts from chapter 12, discusses more technical and dynamic concepts of the corporation including distribution, engineering, business expansion to overseas markets as well as development of the product among other details (Sloan, 1990). Not only does this book discuss great strategic management concepts, but it is also an autobiography of Alfred Sloan. In my own opinion, this makes the book easier to read even though it is 496 pages long. In my own opinion, this book offers great strategic management advice to Managers in corporations as well as sole proprietors of various business ventures. In the first section of this book [chapters 1 to 12], Sloan shows us the importance of basic business concepts such as systematic organization, planning as well as decentralization. Mr. Sloan started off his career as a draftsman in Hyatt Roller Bearing Company and within no time, he demonstrated great competency in his work and he was promoted to the CEO’s position soon after the company became a standard in the automobile assembling industry (Sloan, 1990). Hyatt Bearing Company later merged with manufacturers of other motor vehicle spare parts to form United Motors Corporation (Sloan, 1990). The company would then later be acquired by The General Motors Corporation, a company which had been created by Durant William in 1908 (Sloan, 1990). It was during the same time period that General Motors acquired other smaller companies in the motor vehicle industry such as Oakland and Cadillac with an aim to compete with Model T from Ford, which was the then Market leader (Sloan, 1990). After several years of working with General Motors, Sloan was appointed as the corporation’s president. In my own opinion, it was during this time that Sloan’s ability as a real leader was revealed. By the time Sloan was appointed CEO, Ford was controlling over 50% of the market share. However, Sloan was able to put in place measures that would help General Motors to Compete with Ford. Sloan recognized a number of intrinsic problems in the Automobile industry and set out to make GM the leader in the automobile business and in the process he ended up transforming the whole industry. He had joined GM at a time in American history when consumers were starting to demand product that suited their exact needs. He recognized the problem with ford’s model of mass producing cars that brought forth many cars at a lower cost, but all the cars were undifferentiated. To change this GM introduced what is called the “Mass-class market” (Sloan, 1990). Sloan introduced changes to make GM’s cars affordable to the ordinary citizen while at the same time keeping non-price sensitive consumers satisfied. Among these changes he initiated in the 1920’s was the selling of cars in instalments where a customer deposited a percentage of the total amount of money the car was worth. This sale arrangement today applies in many businesses and its initial use in the car industry by [Sloan] was a stamp of approval for other managers to adopt it in their own organizations. A second change targeting greater sales volume at GM was the facilitation of used car trade in; clients could top-up the cost of their new GM car with an older used car (Sloan, 1990). This move by GM meant ownership of new GM cars was easier and they could also use the parts from the old cars to manufacture new ones. To make the products of GM more attractive he changed the way cars are designed. He viewed innovation as an essential part of GM’s effort to overtake Ford as the leading organization in sales of vehicles. The engineering department of GM was responsible for coming up with most of the ideas that make today’s car luxurious and appealing in design. Under [Sloan’s] stewardship GM designed and started mass producing cars with closed bodies and included aesthetic features in their designs (Sloan, 1990). He supported his engineers and he introduced an unofficial policy of adding new styles to their annual models (Sloan, 1990). From time to time he would let them showcase their skills in car shows where they displayed to the public the new cars they designed and most importantly obtained feedback on whether the new revolutionary changes were acceptable to the public. Another significant change introduced in GM by him concerned with the relationship between the corporation and its dealers. He views manufacturer-dealer relationship as existing for the benefit of all parties (Sloan, 1990). He recognized the role played by dealers in propagating GM into the top of the automobile industry. During his leadership GM adopted a rational approach of selecting and retaining dealers who could leverage the value created by GM in their cars to increase or maintain sales volume. Conclusion This book by [Sloan] contains valuable lesson for managers whose companies are facing decline or are forecasted to experience some turbulence in a competitive business environment. It contains valuable tactics that the Author applied in dealing with the problem of a firm becoming too complex as it tried to satisfy it customers while staying ahead of the competition. In my opinion the book still remains a must read for any manager and should be made compulsory in management training. References Sloan, A.P. (1990). My years with general motors. New York: Doubleday Dell Read More