Introduction ! Before this assignment I had never even heard of the name Alfred Sloan before. I

was shocked when I learned what an important and influential business man he was. Without his knowledge or will power General Motors would not be what it is today, in fact it might not even exist today. He took over General Motors at their most vulnerable time, re-organizing the management system and creating new ideas that put them well ahead of Ford. Sloan was a savvy business man that cared about the well being of his employees as well as his customers.The name Alfred Sloan should be more recognized then Christopher Columbus in this country. We owe this man a lot more credit then he is given. Our factories would not be what they are today without him. Background ! Born in New Haven, Connecticut, on May 23, 1875. His Father was a partner in a

wholesale tea, coffee, and cigar business, with a firm called Bennett-Sloan & Company. In 1885 he moved the business to New York City, on West Broadway and from the age of ten Alfred grew up in Brooklyn. His fatherʼs father was a school teacher, and his mothers father was in Methodist minister. He excelled as a student at Brooklyn Polytechnic Institute where he completed the college-preparatory courses. He was the oldest of five children, one sister, Katharine, and three brothers, Clifford who worked in the advertising business; Harold who was a college professor; and Raymond being the youngest was a professor, writer, and expert in hospital administration. One thing that the Sloan children all had in common was that they had a capability for being dedicated to their own separate respective interests. The Sloan children saw how their father ran

his business and I believe this is where they learned the inʼs and outʼs of what it takes to run a successful business. (Farber, D. (2002). Sloan rules. University of Chicago press0 ! In 1892 at the age of 17 Alfred graduated from the Massachusetts Institute of

Technology with a B.S. in electrical engineering. He was the youngest member of his graduating class. This was also the same year that the Duryeas opened the first gasoline-automobile manufacturing company in the United States. Upon graduation Alfred obtained a job at the Hyatt Roller Bearing Company of Newark, New Jersey. This was also the same year he married Irene Jackson of Boston. Sloan oversaw the production of the Hyatt anti-friction bearing which later became a component of the automobile. Although the Hyatt Company was successfully producing the anti-friction bearings the firm was rapidly failing. Alfredʼs father and a partner of his saw opportunities within the failing firm and decided to buy it putting Alfred in charge. By the age of 26 he became president and general manager. His first goal was to revive the firm by changing the anti-friction bearings to steel roller bearings for the ever expanding automobile industry. This move increased profits as high as $4 million.(Sloan, A. (1964).

My life with General Motors. New York: Garden City.)
! Then rumors began to spread to General Motors might give them a run for their

money and produce their own automobile bearings. William C. Durant, the energetic builder of GM, instead approached Sloan with an idea to merge the two firms and make United Motors Corporation making Sloan vice president. Sloan accepted the offer and in 1918 he became vice president and a member of the GM executive committee. Under Durantʼs leadership the company acquired an enormous amount of debts. Pierre Samuel du Pont approached Durant with an agreement to resign as president in 1920,

leaving himself president. There was one problem with this plan, he knew very little about automobiles. He then made Sloan vice president in charge of operations. Three short years later Sloan rose to the top becoming president of the General Motors Company. The company flourished under his leadership. Soon GM became the largest corporation in the world. One of Sloanʼs greatest ideas was to change the model of a car each year. This idea was called planned obsolescence. Sloan realized that each car model will eventually become obsolete as technology improves or as people get sick of it and want something new. He also gave customers more of a selection of cars which allowed him to attract a wider portion of cliental. Some of his other accomplishments include four-wheel drive and the crankcase ventilation system. (http://www.myhero.com/ go/hero.asp?hero=Alfred_Sloan_06) ! Sloan made a great philanthropic contribution in 1937 when he decided to start

the Alfred P. Sloan Foundation with $10 million. The foundation makes grants in support of original research and education in science, technology, engineering, and mathematics. In 1956 when Sloan retired the GM market share stood at 52 percent. (http://www.sloan.org/about-the-foundation/) Leadership Style ! The leadership style I see fitting Sloan the best is the transformational style. The

transformational leader enhances the motivation, morale, and performance of followers through a variety of mechanisms. From all my research Iʼve conducted I feel that Sloan was a fair man. I would also classify him as an entrepreneur because he had the ability to produce innovations that put GM at the top of their game.Durant was the man who invented GM, and Sloan was the one who made it work. As a true leader, he had a high

level of self confidence that helped him to make right decisions at the right times. Sloan participated in group thinking and wrote GMʼs annual report himself. He wanted to be fully in control of GM. (The Are of Leadership Part 5 Chapter 10 p. 184) ! Unlike Durant, Sloan believed that GM had to be a group organization. He was

the first to realize that the major obstacle to organization growth is the limited capacity of management and that as companies increase in size, problems of coordination, communicated, and outside representation increase faster than the ability to cope with them. He felt that each executive, including the man at the top, must realize that he needs help and that every person in any position can make a contribution, or to obstruct, should be consulted before a decision is made. Sloan enlisted all executives in a real partnership in the interests of the cooperation as a whole. He did this by utilizing their abilities to the fullest, he created a fair policy promotions, he offered incentives and used persuasion rather then command. (Dale, E. (1956). Contributions to administration by Alfred P. Sloan, Jr.and GM. Administrative) This is what made Sloan such a great leader, the fact that he was stern like a dictator, but neutering like a mother. Itʼs a remarkable ability to poses both of these traits. Sloan used reward power to motivate his employees, he had the ability to influence the allocation of incentices inside his organization. (http://smallbusiness.chron.com/5-sources-powerorganizations-14467.html) ! ! ! Development of Leadership

GM was disorganized when Sloan took control, he believed that the corporation

could not continue to grow and survive unless it was better organized. Sloan quickly came up with a reorganization plan called the centralized organization plan. (Dale, E.

(1956). Contributions to administration by Alfred P. Sloan, Jr.and GM. Administrative Science Quarterly, 1(1), 30-62) The plan relied on one individual to make decisions and provide direction for the company was a whole. (http://smallbusiness.chron.com/ centralized-vs-decentralized-organizational-structure-2785.html) He then set up a “standard procedures” concept. He had a vision to break down GM into smaller divisions, something we see in almost all companies today. He created a structure so people could be more creative with their time and have it be well spent. He first redefined the functions and values of various divisions as a part of the corporations activities. He then set up the divisions up into four groups; car, accessories, parts, and miscellaneous. Sloan saw a major improvement in production after reinforcing this change. He crowned the phrase “centralized management.” (http:/www.inventhelp.com/ Alfred-Sloans-Concept-of-the-Corporation.asp#.UWr0_HBkjS8) He wanted his employes to be able to work freely and be creative and only have to worry about answering to him. ! He also felt that senior executive should exercise some central control but should

not interfere much with the decision making in each operation. His market-oriented rules for defining management effectiveness enabled GM to overtake Henry Fordʼs auto company. (COMPARISON OF TWO LEADERS:POWER GAINED AND LOST (CP8) DOC )Sloan believed in giving people the cars they wanted. Ford thought he could pick out the single best car for every Americans. Which is where he went wrong. He was one of those people who saw what needed to be done, and knew hoe to accomplish it. As I had mentioned before, his father had the same niche. I feel that the success of his

father had a lot to do with his personal success. (http://www.melodiesinmarketing.com/ 2008/01/28/alfred-sloan-and-organizational-management/) Recognized Facts ! I have noticed some facts that appear in the assessment exercises that apply to

Alfred Sloan. One of them being that he rules with free-rein style. He presented problems with some boundaries and let his employees decide how to come up with a solution. Sloan had a vision from day one. His vision was that the automobile industry was about creating a new transportation system in the United States. He also believed that change and growth were the key drivers to sustain a competitive environment. Has had a gift to motivate his employees with innovative ideas, skills, and values to achieve a common mission. Alfred Sloan was one of the most empowering individuals of the 20th century. He had the ability to increase effectiveness by sharing power, thus igniting the energy and liberating the talent of the group. I would also describe him as being achievement oriented. They are successful, competent, skillful and productive leaders. A true leader understands the power of this authority and exercise this with wisdom. His integrity and sense of charisma led GM to the top. ! Three topics discussed in class that fits Alfred Sloanʼs leadership style are that

he is transformational leader, his used reward power to manage, and he believed in centralized management. (http://www.mindtools.com/pages/article/newLDR_84.htm) ! Out of all the leadership styles I see the transformational leader producing the

most results. This theory is difficult to be trained or taught because it is a combination of many leadership styles. It is laid back, yet firm. These leaders are born being this way. Alfred Sloan is one of the most successful leaders to use this style. He was able to

befriend his employees along with giving them firm orders. He knew what needed to be done and he knew hoe to do it. ! He used reward power to govern his organization. He had to capacity the ability

to persuade people into wanting to accomplish goals. He believed in offering incentives as a way to help motivate and show appreciation towards his employees. To rule with reward power is to understand that in every transaction there is a potential for exchange. He recognized that there was always something he wanted from his employes and vis versa. He should that he respected him and in return they should the same appreciation. (http://reward.ezinemark.com/reward-power-the-fastest-way-topersuade-4cd11a8fe05.html) He had the charisma to attract people and the authority to get those people to work. He focused on using and not abusing the power that came with the leadership position. The successful leader masters the use of power to influence the behavior of others, this is why he was so well liked. One of the traits a reward power leader is that they are open to new idea. They can accept criticism along with taking a chance to try and fail. (The Are of Leadership Part 6 Chapter 8 p. 82) ! As I had mentioned before when Sloan took office the entire GM company was a

disorganized mess, Sloan organized everything by assigning teams different tasks. The most important element of teamwork is commitment to a common purpose. With a clear, motivating purpose and positive norm of behavior, people can pull together as a powerful force to achieve extraordinary results. Sloan knew this and he knew how to execute this successfully. We still see this practice of group work not only in today's factories but in the office as well. (Stewart, T. (1999). The businessman of the century.

Fortune, 140(10), 108-128.)

What I learned ! As I had mentioned before, he is an alumni of Massachusetts Institute of

Technology. (MIT) One way the university has chose to recognize his accomplishments was to create the MIT Sloan School of Management. Their mission is to develop principled, innovative leaders who will improve the world and to generate ideas that advance management practices. The program was started in 1950 when the Sloan Foundation donated over $ 5 million to establish a school of Industrial Management. The concept was that Alfred was interested in further developing the close associate between science and industry. He wanted to correlate the complex problems of management in modern technical industry with science, engineering, and research. He wanted to be able to help other people that were in this situation when he was just beginning his career at GM. Prior to doing this research, I was not aware of this program. I am seriously thinking about applying for my graduate degree There (http://mitsloan.mit.edu/about/history.php) Conclusion ! Try and picture what our world would be like today if Alfred Sloan did not take

over as president of General Motors. Imagine if the company did fail. Today our factories would still be a disorganized mess, and American probably wouldn't be able to compete with the demands of consumers forcing even more goods to be imported. We owe all of these achievements to Alfred Sloan. He brought about a transformation in the automobile industry with his innovative management approaches and customers concern. He was one of the most influential leaders of the 20th century. Alfred Sloan

was a cunning business man with a understanding heart. A rare combination for a man of his demeanor. (Farber, D. (2002). Sloan rules. University of Chicago press.)