Organizational Theory

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April 10, 2026

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April 10, 2026

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"It was at the microeconomic level, however, that the output war was really won. For the biggest wartime advances in mass production and management were made in vast factories like Ford's mile-long bomber assembly line at Willow Run, Boeing's B-29 plant at Seattle or General Motors' aero-engine factory at Allison. At peak, Boeing Seattle was churning out sixteen B-17S a day and employing 40,000 men and women on round-the-clock shifts. Never had ships been built so rapidly as the Liberty ships, 2,700 of which slid down the slipways during the war years. It was at wartime General Motors that Peter Drucker saw the birth of the modern 'concept of the corporation', with its decentralized system of management. And it was during the war that the American military-industrial complex was born; over half of all prime government contracts went to just thirty-three corporations. Boeing's net wartime profits for the years 1941 to 1945 amounted to $27.6 million; in the preceding five years the company had lost nearly $3 million. General Motors Corporation employed half a million people and supplied one-tenth of all American war production. Ford alone produced more military equipment during the war than Italy. Small wonder some more-cerebral soldiers felt they were risking their necks not in a 'real war . . . but . . . in a regulated business venture', as James Jones put it in The Thin Red Line. It was strange indeed that the recovery of the American economy from the Depression should owe so much to the business of flattening other peoples' cities."

- Corporations

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"Hitler also missed the point completely about American economic capabilities, for the cars and the refrigerators he sneered at were being produced by corporations that led the world in techniques of mass production and modern management. The Axis leaders deluded themselves into believing that, with the Great Depression, the American economic model had disintegrated. Yet despite the sluggish growth of aggregate demand in the mid to late 1930s, firms like General Motors were taking tremendous strides forward in efficiency, exploiting those economies of scale that were unique to the huge American market. Exports to Britain and the Soviet Union had given GM and its peers a foretaste of what was to come. With the American entry into the war, they were inundated with government orders for military hardware. In the First World War, the result had been a mess: production bottlenecks, chronic waste and inflationary pressure. In 1942 the opposite happened. 'The real news,' as Charles E. Wilson of General Motors put it, 'is that our American methods of production, our know-how about the business, could be applied to mass production of all these war things . . . and that is the one factor that I think our Axis enemies overlooked.' Here, too, a compromise was involved. With astonishing speed the big corporations converted themselves from the champions of a consumer society to the servants of a command economy. As John Hancock and Bernard Baruch observed: 'With the coming of war a sort of totalitarianism is asserted. The government tells each business what it is to contribute to the war program.'"

- Corporations

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