Furthermore, it became increasingly clear that General Motors could not employ its mass-production techniques effectively in the airframe industry. We decided, therefore, that it would be in the best interests of both General Motors and North American to dispose of our holdings in the company at some appropriate time.

In no instance was the answer explicitly provided by the automatic operation of the organization. The task of management is not to apply a formula but to decide issues on a case-by-case basis. No fixed, inflexible rule can ever be substituted for the exercise of sound business judgment in the decision-making process.

Great as have been the engineering advances since 1920, we have today basically the same kind of machine that was created in the first twenty years of the industry. We still deal with a vehicle moved by a gasoline engine. The heart of the engine is still a piston in a cylinder, moved by the burning of a mixture of gasoline and air, which is fired

Third, a large number of parts and supplies to be purchased had no common denominator. They were special items applicable to a particular engineering concept. Therefore, I think the General Purchasing Committee itself cannot be cited as an unqualified success. It caused us, however, to make a strong effort to standardize articles where possible.

The instrumentality of control then became the divisional four-month forecast of expected business, which came to me as vice president in charge of operations; that is, it came to me after mid-1921. This forecast was the key to inventory control and it was my responsibility to review and approve it. Thus the division managers still bought the

The circumstances of the ever-changing market and ever-changing product are capable of breaking any business organization if that organization is unprepared for change — indeed, in my opinion, if it has not provided procedures for anticipating change.

The figures did not give automatic answers to problems. They simply exposed the facts with which to judge whether the divisions were operating in line with expectations as reflected in prior performance or in their budgets.

Decentralization or not, an industrial corporation is not the mildest form of organization in society. I never minimized the administrative power of the chief executive officer in principle when I occupied that position. I simply exercised that power with discretion; I got better results by selling my ideas than by telling people what to do. Yet

Our profits dropped from about $248 million in 1929 to $165,000 in 1932, still in the black, thanks mainly to our financial-control procedures. In 1932 we were operating at less than 30 percent of capacity.