Freedom and Informality: The Concept of the Corporation Chapter 2

This chapter begins with a disturbing thought. It claims that GM was once an informal and relaxed company. I have gotten used to the idea that GM was once the largest defense contractor and that Detroit was once the wealthiest city in the country, though I suspect that claim wilts a bit when you look at New York carefully. Still, the GM I knew in my youth was not a bastion of casual activity.

Still, that is what Drucker claims: “There is little emphasis on title, rank or formal procedure. Indeed, the one thing that is most stressed by all executives is the “informality” that exists in the relationships among the members of this group and in the division of their work.” (p 63)

It is a description that reminds me of the early days of Silicon Valley, when news reports were full of casual clothes and undisciplined hours. At the time, I thought that this approach came from a combination of California weather and money from the military industrial complex. In fact, it probably had more to do with the fact that the reporters were describing engineering complexes rather than production facilities. Engineers have a different relationship to their tools than workers.

Still, this picture of Detroit in the 1940s is not Detroit in the 1970s. If it was true, and I will assume that it was, Drucker is clearly using it to claim that the management of General Motors was a good. It was a good place to work, he is saying, so the management must be good.

Tale of Two Buildings : The Concept of the Corporation Chapter 2

There is a General Motors Building in both New York City and Detroit. Or at least their once were buildings of the same name in both cities but then GM moved into the Renaissance Center on the Detroit River and the original General Motors Building was renamed Cadillac Place. OF course in 1946, the year of this book, the GM Executive Offices were in 1775 Broadway, now 3 Columbus Circle.

The point is that General Motors had a strong presence in both cities. Detroit was the industrial hub, the home of operations. New York was the financial center, the place where the company raised funds and dealt with the corporate world. The separation mirrored the corporate structure of GM, though the physical locations don’t perfectly map onto the company structure. By 1946, GM had 30 divisions and each was almost a complete company. The corporate office provided certain central services – legal, financing, etc. – that held the group together.