Well, Sonny was the "Crown Prince" and in those days the oldest son took over from the father. I wonder if Fredo had been born first...what would Vito have done than?

A lot of theories have been floated around about what Vito's plans were for Michael and the consensus was that he would be in the "legitimate" world as some kind of judge or politician or maybe even a union leader, using Hagen as a go between with the family, leaving Sonny in charge of the Olive Oil business.

From the many scenes (look closely at GF II when Michael was a baby and again when he was a small child) in the first two films, I get the sense that Vito knew Michael was the smartest of his sons, and that he desperately needed him with Tom's help to be some kind of check on Sonny's bad temper and poor negotiating skills. Of course Vito could never predict Sonny's death, but he also did not see the incipient sibling rivalry between Michael and Tom, e.g. "You discuss MY future with MY father?"