Harvard Business: Did Professional Management Cause the Fall of GM?

By John T. Landry

The recession has intensified calls for making management a profession. On top of the threat of global warming, we've seen how narrow-minded, self-serving behavior by executives can grievously damage the financial system. To inject more social responsibility, students and professors at several prominent schools are promoting a version of the Hippocratic Oath for graduating MBAs.

Yet professional management involves more than social responsibility. Doctors, for example, are trained to collect facts, analyze them objectively, and make impersonal decisions based on deep expertise. That sort of rational work has many clear benefits, but also dangers for large organizations. General Motors is a prime example.

To see why, let's go back to 1964, when HBR published "The Great GM Mystery," by Harold Wolff. GM was at the peak of its success. Longtime leader Alfred Sloan may have retired, but the company was still posting growing profits and market share. And Sloan had just published My Years with General Motors, which executives by the thousands read not as a memoir to be enjoyed but as a guide to success. (more)