Monday, January 21, 2019

The concept of the corporation............

Why did Sloan dislike Drucker’s book so much?  It was certainly not because it was hostile to GM: the overall tone is one of admiration for the company and respect for the men who had built it.  However, Drucker raised questions that Sloan and his colleagues did not wish to discuss, and attempting to bury the book was their response to this challenge.  Professional managers did not derive their power from the ownership of the means of production.  So what gave legitimacy to the power that Sloan and his colleagues exercised?  What was the proper scope, and necessary limits, of that authority?  What defined the social role of the modern, professionally managed corporation?  These were the issues which  Drucker sought to open in The Concept of the Corporation; Sloan’s response was to close the book.

-John Kay, as extracted from this essay

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