Strategy and Structure: Chapters in the History of the by Jr. Alfred D. Chandler

By Jr. Alfred D. Chandler

This booklet indicates how the seventy biggest organisations in the USA have handled a unmarried financial challenge: the powerful management of an increasing enterprise. the writer summarizes the historical past of the growth of the nation's biggest industries in the past hundred years after which examines intensive the fashionable decentralized company constitution because it was once constructed independently by means of 4 companies--du Pont, common cars, common Oil (New Jersey), and Sears, Roebuck. This 1990 reprint incorporates a new creation through the writer.

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107 As the Vice-President in charge of Finances stressed, these annual, like the short-term four months' forecasts, were scrutinized by the central office and compared with current and past performance, attention of the proper officials being called to any abnormalities or marked deviations from what might be deemed a conservative sales expectation. Experience has led to the establishment of standards or working capital requirements in relation to volume of business and the forecasted investment in receivables and inventory are carefully checked :against such standards, allowance being made for seasonal fluctuations.

Pratt. Sloan, then, stressed the continuing autonomy of the operating divisions whose managers would retain full authority and responsibility: The General Manager formulates all the policies of his particular unit subject only to the executive control of the President. The responsibility of the head of each unit is absolute and he is looked upon to exercise his full initiative and ability in developing his particular operation to the fullest possible extent and to assume the full responsibility of success or failure.

Each car division now receives from its dealers every ten days the actual number of cars delivered to consumers, the number of new orders taken, the total orders on hand, and the number of new and used cars on hand. Each ten-day period the actual results are compared with the month's forecast, and each month, as these figures are received, the entire situation is carefully analyzed to see whether the original estimate was too high or too low. If it is decided that the estimate was too high, the production schedule is immediately reduced.

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