Concept of the Corporation

"The Concept of the Corporation," written by Peter Drucker in 1946, explores General Motors' operations and examines the broader societal impact of large corporations. Drucker gained extensive access to GM, including meetings with CEO Alfred P. Sloan, allowing him an insider perspective on management dynamics. Unlike his contemporaries, he focused on internal company processes, such as decision-making and power structures, rather than just top-down management.

Drucker's book praised GM for its innovative management techniques but suggested decentralization for greater success. GM initially welcomed Drucker's work but reacted strongly upon publication, viewing his suggestions as betrayal. Sloan responded with his memoir, "My Years with General Motors," as a rebuttal. Drucker was surprised by this reaction, having admired GM's structure, which he likened to the U.S. government's federal system.

GM took decades to adopt decentralization, while Japanese companies embraced Drucker's ideas, surpassing many American firms. This highlights the delayed but significant influence of Drucker's insights on corporate management.