COLM BROGAN tells of some great firms which maintain the small ones-and have a social conscience
THE PRACTICI OF MANAGEMENT, by Fter F. Drucker (Heinemann, U.).
MR. 'RUCKER has won a considerable reputation in tie United States as a philosopier of contem
porary industy. He has enjoyed chance, given to few
theorists, to stuy the workings of great Corportions from the inside. He hs a sharply analstical mind iid his writing is both clear an plausible.
The practical lusinessman may suspect that a bok on management by an acadmic must he an exercise in teachng grandmother to suck eggs, ht he would be wrong. Mr. Druker is no enemy of business, eithr big or small. If he finds somehing to criticise in the American commercial and industrial scene. he finds much more to admire. Indeed, if his account is not torfavourable, then the range and deft and responsibility of America business thinking set an exampe that our own tycoons should endeavour to imitate,
TT is one of his main -'theses tht the time lag between the incption and the fruitful results cf any innovation either of plies, or investment is steadily extending, and therefore that buiness managers are increasingly conpelled to think in two different ffirensions of time. limy must nurse he year-to-year solvency of their firm and also take the big and inaginative risks involved in the ling-term investments either of brans or of bullion.
The complexity if the factors to be considered in hsiness strategy as compared with aches is admirably brought out.
But the chief vam of this hook for the average Br ish reader is in its exposition of te immense and indeed vital importnce of management in the condet of industrial and commercial alairs.
T IMAGTNI that the aver Jage wag-earner would concede that the nventor of an important new mchine or process can rightly laim to have made a special ind irreplaceable contribution o his industry or business of ;seater single value than the wor of the man at the bench or the mn in the counting house.
The designer of knew aeroplane or a revolutionary :as is admitted to be a man of usful originality. There is no sue] readiness to accept the claims if management. Indeed, hostility tomanagement is now at least as grek as hostility to
ownership, which is hardly surprising in a world of nationalisation and huge impersonal combines.
Yet management is not merely efficiency in organisation. It is not merely the comfortable occupation of men who come later to work than the manual and clerical workers and possibly leave earlier. Management on its higher levels is a much more exacting and a much, more fruitful thing than that.
Swift sang the praises of the man who made two blades of grass grow where one grew before. The daring manager, even more than the inventor, can make 10 jobs grdw where one grew before. Sears-Roebuck, the American sales catalogue firm, is a notable example of a managerial initiative that not only created a demand but also created the means of supply.
THE United States had an immense potential market of farmers living far from shops who had to take the word of the mail-order advertiser for the value of the goods he had to offer. To win the confidence and therefore the custom of this market. SearsRoebuck reversed the normal principle of advertising.
Their celebrated catalogue. the materialistic bible of millions, made no effort at all to recommend the huge variety of goods the firm had for sale, but confined itself to an objective description of the goods.
They also reversed the normal commercial principle of caveat emptor. " Your money back and no questions asked " was the reassuring motto of the firm, which not only put the American farmer in the market for the mounting supply of comforts and gadgets but also encouraged the growth of a multitude of small producing plants to satisfy that market.
Now, Sears-Roebuck, which achieved fabulous prosperity as the seller without shops, is rearranging its whole purpose to sell-from shops.
The exploitation of lhe SearsRoebuck selling methods was just as " productive " as the invention of the McCormick harvester. It is primitive and unintelligent Marxism to think otherwise, hut there is a great deal of primitive and unintel. ligent Marxism in the most unexpected circles.
QEARS ROEBUCK is
0"--1 only one example. Henry Ford I provides another. What made the Ford car a symbol of advancing prosperity throughout the whole world was nothing strikingly original in its design hut the managerial deployment of the labour force in the plant and the managerial organisation of selling and maintenance. The original Ford, in short, was much less of a technical than a managerial revolution.
Peter Drucker is sharply critical of Henry Ford's failure to understand the full potentialities of the breakdown of process which masquerades under the name of mass production. One complex of simplified processes-one identical product. That was the basic assumption of Ford's production creed; that is the assumption which Drucker challenges. (He even ventures to suggest that the august Taylor possibly did not understand the implications of Taylorisationa But what brought Henry Ford I to bay was a human counterrevolution, (Characteristically, it was quite unforeseen by H. G. Wells who regarded Ford I as a kind of Gandhi of gadgets.) The man destroyed all initiative and enterprise in his own business by his egotism, which became miserly of all delegation of authority.
The firm was drifting like a huge ship towards bankruptcy when Henry Ford II took over. With no experience at all. equipped only by native intelligence and a Catholic instinct for the dignits and responsibility of Man, he raised Ford's again to a condition where it has a power in the world that many States might envy,
Fear of loss
UP to a point, Mr. Drucker's case is both sound and salutary, but, like many apologists, he is overingenious. He says that the governor of business activities is not the expectation of profit but the fear of loss. This is a fact worth emphasising. It is a fact that should be self-evident, for the governor of all purely human activities is the need for survival.
But it is also true that the purpose of business is largely, though not always entirely, profit. Once people launch themselves into business, the fear of failure, which is the fear of extinction, will he the dominant consideration. But people do not launch into business with no more glittering hope than the hope of not being extinguished. They hope to succeed, which means to make a profit. Profit is, of course, a much less simple concept than the blackand-white caricature of the Daily Worker would lead the simple to believe, and profitability is much less simple still.
Large-scale capitalism may not be the last and best hope of mankind. hut the intelligent critic fails in his duty if he refuses to recognise the adventurous qualities which capitalism displays to-day, in the United States at least. There are great firms which completely finance subsidiaries but leave the managers of these subsidiaries entirely free to sell their product elsewhere, even to a rival. if they can get a better price or better conditions of sale.
There are great firms which are the mainstay and support of many small firms. There are great firms which are by no means.lacking in an enlightened and even a sentimental social conscience.
,The goods AN increasingly enriched material Eldorado is not everybody's idea of the good, the beautiful and the true. But it is the idea of the great majority of the people of Britain as well as those of U.S.A.
Countless millions feel that the simple dignity of man is offended and elementary justice is denied him if his home is not supplied with the Telly, a fridge and perhaps a motor-bike or car. If that is the demand of social justice expressed in material terms, then capitalism is the onjy ss stem which has ever come near to meeting that demand.
Plain living and high thinking may be a nobler ideal, but if you want the goods, capitalism has them. And no other system has.