Concept of the Corporation
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| Concept of the Corporation | |
| Author | Peter Drucker |
|---|---|
| Country | United States |
| Language | English |
| Publisher | Transaction Publishers; Reprint edition (January 1, 1993) |
| Publication date | 1946 |
| Pages | 329 |
| ISBN | 1560006250 or 978-1560006251 |
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Concept of the Corporation is a book by management guru Peter Drucker published in 1946. It is widely held to be the first book of its kind.
The book studies and analyses General Motors as a large social institution involved in business activities. It describes what management is, how managers are selected, how they act, and how a corporation is organized into management units at different scales (e.g. divisions, sections, etc.). It also seeks to explain the role and position of large corporations in modern society.
In writing and researching the book, Drucker was given unprecedented access to General Motors resources. He was paid a full salary, he accompanied CEO Alfred Sloan to meetings, and he was given free run of the company.
Druckers' interest wasn't focused on the 'outside' of a company, but on the inside: he focussed in contrast to his contemporaries on what happened inside a company to make it succeed or fail. Fascinated by this question he studied management to find out what really made a business tick.
Until then management had been seen as a no-brainer: the CEO would simply give the orders, which others would follow. But Drucker was interested in the human interactions within a company, and more specific on what way a power structure, political environment, information flow, decision making and managerial autonomy would contribute to success. By shifting his focuspoint he was able to explain why General Motors was such a success.
GM was very pleased with Druckers' work, until Drucker had the nerve to publish his book, Concept of the Corporation. The book strongly praises General Motors for its vision in developing management techniques, programs, and infrastructure. But GM interpreted the suggestions that Drucker makes to decentralise the company in order to even become more successful, as betrayal.
For Drucker this was completely unexpected: he found GM a great company, which he had even compared with the U.S. government. Drucker used the term 'federal decentralization' to describe it, as he felt that a company should be organized in a number of autonomous businesses. Parallel to the way the U.S Government gave power to the states, GM should give divisions its autonomy.
It would take GM several decades to listen, by then he had helped the Japanese, who embraced his intentions and the hybrid organization form.
