Sloan Rules: Alfred P. Sloan and the Triumph of General Motors

by David Farber

Alfred P. Sloan Jr. became the president of General Motors in 1923 and stepped down as its CEO in 1946. During this time, he led GM past the Ford Motor Company and on to international business triumph by virtue of his brilliant managerial practices and his insights into the new consumer economy he and GM helped to produce. Bill Gates has said that Sloan's 1964 management tome, My Years with General Motors , "is probably the best book to read if you want to read only one book about business." And if you want to read only one book about Sloan, that book should be historian David Farber's Sloan Rules .

Here, for the first time, is a study of both the difficult man and the pathbreaking executive. Sloan Rules reveals the GM genius as not only a driven manager of men, machines, money, and markets but also a passionate and not always wise participant in the great events of his day. Sloan, for example, reviled Franklin Roosevelt and the New Deal; he firmly believed that politicians, government bureaucrats, and union leaders knew next to nothing about the workings of the new consumer economy, and he did his best to stop them from intervening in the private enterprise system. He was instrumental in transforming GM from the country's largest producer of cars into the mainstay of America's "Arsenal of Democracy" during World War II; after the war, he bet GM's future on renewed American prosperity and helped lead the country into a period of economic abundance. Through his business genius, his sometimes myopic social vision, and his vast fortune, Sloan was an architect of the corporate-dominated global society we live in today.

David Farber's story of America's first corporate genius is biography of the highest order, a portrait of an extraordinarily compelling and skillful man who shaped his era and ours.

Genres: Biography, American History

299 pages, Paperback

First published January 1, 2002

About the author

David Farber is the Roy A. Roberts Distinguished Professor of History at the University of Kansas.

Reviews

[Patrick · Rating 2 out of 5]

A strangely uneven book that took me nearly a month to finish. Well researched and occasionally well written, but in the end I felt that either the subject of Alfred P Sloan and his management practicies at General Motors was not comprehensive enough for the ambitions of the author, or (more likely) that the author was not skilled enough to accomplish what he seems to have set out to do with this book.

I picked this up thinking that I would get a modern perspective on the management decisions and organizational structure that Alfred Sloan instituted at GM in the 1920's and 1930's that enabled GM to overtake Ford as the domestic automobile maufacturer with largest American market share. By the 1950's GM had also become the largest and most significant corporation in American society.

We get a little of this in the first half of the book, mainly in chapters 3 and 4. Prior to that we get a very interesting and at times humorous account of GM under Billy Durant, an entrepreneur who was more interested in making deals than in making cars and showed little administrative or managerial ability. This sets up a nice contrast with Sloan's managerial style as he takes control of GM after Durant is ousted out by the Du Pont interests, and makes his achievements all the more remarkable.

As best as I can tell, Sloan's main accomplishments consist of instituting a proper organizational system to ensure that all of GM's operations reported to corporate managers, and in establishing a committe style of decision making at the head of the corporation to ensure that every division was working towards the smae goals.

If that seems vague, therein lies my major criticism with the first half of the book, and it continued to vex me throughout the latter part as well: we get very little DEPTH in the story behind these decisions and these practices, nor much analysis into how these institutions played out. Sloan introduces a concept, and we kind of learn how he got other managers to buy into his ideas, but not much into how these concepts were actually integrated into the way GM operated.

The issue could be that Sloan and GM didn't leave many corporate records behind that go into that level of detail. More likely, in my opinion, the author, a historian by trade
who does not seem to be especially focused on business, lacked the skill or the interest to analyze what was in the records.

Detailed analysis of corporate management practices is a subject that would not interest many general readers of history, politics, and sociology, and that seems to be whom author Fraber is writing for. And yet Alfred Sloan is the epitome of a business leader who devoted his life to championing the idea that rational decision-making in the style of business corporations is the best way to achieve maximum productivity out of any organization, whether it be an automobile manufacturers or a government agency (or all of American society, perhaps).

So, as a reader looking for that aspect of Sloan's life and work, I felt a bit cheated in that this book didn't go too deeply into how GM instituted Sloan's ideas. These were the real reason for the "Triumph of General Motors" that the subtitle alludes to, in that GM triumphed over Ford as the US's largest automobile manufacturer and at the same time became one of the most respected and profitable corporations in the world.

However, by the time I finished this book I had come to believe that, for author Farber, GM's "triumph" was an ironic reference to how Sloan and GM defeated the efforts of the New Deal, organized labor, and the wartime mobilization organizations of the federal government to encroach on what Sloan believed were his rightful prerogatizes as the head of his corporation. The last four chapters of the book are devoted to this part of Sloan's story, and these are the chapters when the author really warms to his subject. Sloan is made out to be a very narrow-minded and retrograde capitalist who viewed everything issue that America dealt with during the Great Depression and World War II through the lens of GM's corporate self-interest. Though not depicted by author Farber as a total corporate villain, Slaon is nevertheless held up to be an enemy of progress and the right of labor, and a dedicated foe of President Roosevelt.

This was the weakest part of the book for me, and it too forever to get through, in part due to literary excesses that seemed quite out of place in a business history. Much of this section focused on Sloan's personal encounters with people who had differing points of view, and Sloan is often made out to be the bad guy. This is especially the case when the book covers the Flint sit-down strikes of 1936, which was the most significant challenge from organized labor during Sloan's long tenure as corporate head of GM. The federal government intervened in the person of Secretary of Labor Frances Perkins. Relying almost solely on Perkins's account of their interaction, Sloan comes off looking like a deranged idiot, a liar, a weasel, and a man who cares little about anything more than his personal fortune.

To be honest, by the time I got to this passage, over 200 pages into the book, my reaction was that this episode was likely not representative of Sloan the man, but it was a good indicator about how the author felt about his subject. The last half of the book really seemed like a hatchet job on Sloan, as author Farber attempts to use Sloan to show how the narrowly focused corporate instincts of big business blinded them to broader issues of social justice and the national interest.

He makes this especially clear in his afterword, as these quotes attest to:

- "...[A]s Sloan's life demonstrates, at least some of them (corporate leaders) can envision a world - they believe in a world - in which coporate profits alone demonstrate human success.....In part, Sloan failed to recognize these issues as problematic because he was...."a narrow man," in his own words. Sloan was not much ruled by moral vision or a sense of compassion for others

Sloan, in ignoring the moral concerns and questions of social justice for which Franklin Roosevelt condemned him, was doing his job. Sloan's ability to put aside almost all issues that did not directly affect GM's profitability is a part of what made him so extraordinarily good at his job.

....Sloan's genius also made him a dangerous citizen of the United States. When business leaders like Sloan face a difficult, morally charged business decision, they have an obligation - they should have an obligation - to give the benefit of the moral doubt to their enterprise. Sloan certainly gave every moral benefit of the doubt, if he ever had such doubts, to GM's profitability."

So, in the end, this book was more about how Alfred Sloan and GM fit into the political and social world of their times, rather than a history of how the corporation succeeded in business as a result of Sloan's managerial practices. And yet, because Sloan's "narrow self-interest" of achieveing profitability for his company was out of step with prevailing public concerns of the New Deal and mobilization for World War II, this book condemns Slaon for pursuing what he felt was the approriate course of action as the leader of his company.

There may be a good story in all that, but this book was too muddled to tell it. However, I did get a lot of good ideas and sources for further research into aspects of the story that interest me, and so I'd have to say that the thirty pages of endnotes is the most valuable part of the book. Author Farber did a lot of valuable research and left us with a good account of his sources. I look forward to reading many of the other books he used, hopefully to get more perspective on Alfred P Sloan and the history of General Motors.

[Edward Renehan · Rating 5 out of 5]

This will serve as the definitive Sloan biography - at once the story of both a man and a corporation, General Motors - for the next fifty years. Definitive. Elegantly rendered. Extensively researched.