• Division of labor and specialization in management may be by some such plan as is here graphically shown. The foreman may receive di rections regarding the machines and their operation from an engineer, regarding special chemical processes from an industrial chemist, and regarding other matters from the superintendent of production. A modification of this plan is shown below in fig. 40.
§ 5. A large commercial policy. The highest function of the management, that which properly is performed by the chief of the organization, is to form the general commercial policy of the enterprise. Every active investment is made in some generally predetermined line—it is merchandise, agri culture, manufacture, transportation, etc., and more spe cifically is wholesale stationery, general farming, iron making, teaming, etc. From the moment the general investment is made the management begins to exercise the power delegated by the enterpriser, investing and reinvesting, shaping and re shaping the business in accordance with a continuous policy. In a degree varying with the kind and size of the business, demand must be anticipated. The trend of changing fashion, in engineering as well as in dress, the shifting of demand for products, must be foreseen and prepared for not too rashly or too cautiously. The process in every kind of undertaking, that of buying and selling, as well as that of manufacturing, requires time. Materials and labor are to be embarked in directions from which they can not be recalled. The widening or narrowing of the scope of the enterprise (as to variety of goods, extent of the market sought, etc.) and the enlargement or reduction of the size of the plant, are decisions wisely made only by a mind with a large business outlook. The larger • This is an attempt in large enterprises to unite the benefits of spe cialization with directness and unity of responsibility. The president is responsible for the larger policies, and to him are responsible directly such officials as treasurer, chief salesman, chief engineer, and manager. By the work of committees and conferences the various func tions and departments are brought into cofiperation as far as is neces sary and practicable, and the eye of the specialist is on every part and process of the business.
the investment and the more complex and distant the factors, the greater is the difference of loss or of gain made by the manager's judgment. The man who has the ability to do this exceptionally well in the largest business merits the title of a "captain of industry." He is not a mere employee of in
vestors, but a prominent personality, whom investors follow, eager to assume the financial risk under such Among the men receiving salaries of $100,000 a year or more in the United States in 1914 were the following: Pope Yeatman, ex A special type of manager is the promoter, who makes a plan of enterprise and tries to interest men of capital to invest in it actively. The promotion may be either of a new enter prise of a competitive nature, or of a combination to create a monopoly out of existing enterprises. The latter is the case of promotion most frequently spoken of, and it may be discussed with the trust problem. The promoter as such is a manager in the initial stage of the enterprise only. He is the moving spirit who offers his services to the investors, who are to per form the enterprise function.
§ 6. Obtaining of capital. The conduct of any business may be thought of as consisting of three parts, or processes : (1) buying, (2) alteration (i.e., recombination, elaboration, change in form, place, and time), (3) selling. These are continuous until the last sale is made and the whole business is ended. Buying and selling make up nearly all of mercan tile business, alteration being subordinate ; whereas alteration is the most striking feature of manufacturing, in which buying and selling appear (often mistakenly) to be quite unim portant.
Almost every business to-day requires from time to time ad ditions of capital, temporary or permanent. Frequent use must be made of credit. The confidence and support of lend ers, whether banks, trust companies, individual shareholders, or investors in bonds, must be secured by the management.
pert mining engineer for the Guggenheims; Theodore P. Shonta, civil engineer, president of the Interborough Metropolitan Co., in control of the great rapid transit system of New York City; Theodore N. Vail, president of American Telephone and Telegraph Co. (the Bell telephone) ; Lewis E. Pierson, banker, president of the Irving Exchange National Bank, New York; Samuel Insull, president of the Commonwealth Edison Company, which controls nearly the whole electric system in Chicago; William M. Wood, president of the American Woolen Company, owning forty mills; and David W. Griffith, manager of the Mutual Film Cor poration, of Los Angeles, manufacturers of moving pictures. See articles on $100,000 salaries, in McClure's, April to October, 1914, by E. M. Woolley.