Democracy m Industry.—And finally, what is to be my attitude, be I manager or worlanan, in regard to democracy in industry and the distribution of the profits and losses arising through my participation? The maxim of a well-known railway magnate who, several years ago, gave expression to the sentiment °The public be damned° has been found to be no less an inadmissible working formula in in dustry than in railroading, perhaps much to the chagrin of several °captains of mdustry° who were wont to substitute °workman° in place of °public.° Granted that we believe that a de gree of democracy in industiy is to be de sired, there yet remairs the delicate problem of balance as between the ideal and the exact degree which our particular concern, under our particular conditions at any given time, can Justifiably affect Many a concern has faced the bankruptcy court through a maladjustment, either one way or the other, of this balance. Such questions, together with those of the division of profits, require for their proper solution the best informed and broadest minded men of the age, but most of all they require the close ana active co-operation of both par ties — capital and labor. Such are some of the questions presented to the modern factory man ager. They are all more or less interrelated and no one of them can be properly viewed except in connection with the others. Collectively, all these questions form a background necessary to the adequate solution of any one of them. Each one, furthermore, is a life study and in the present discussion it is manifestly out of the question to attempt to cover the ground in any but a very broad survey. And in what follows in regard to the technique of factory management, a proper perspective must be maintained by keeping constantly in mind the broad social questions which must form the true background for a proper solution of these more tangible factors which arise for consider ation in the every-day work of the executive.
Going back to our original definition we see that factory management as ordinarily consid ered deals, broadly, with land and buildings, capital and credit, equipment and men — that it is the organizing and directing of these elements in an establishment adapted to attain the ends of economical production, sale at a profit, and growth at least to the point where the effect of diminishing returns counterbalances the possible advantages of further expansion. The art of organizing and directing these elements of pro duction, selling and finance, with all that this implies, constitutes the field of modern factory management.
Organization at once becomes the keystone upon which must be reared the whole structure which is to mold, guide and direct the activi ties of the business. Organization as such must be distinguished from the personnel which, at any given time, is entrusted with the task of making effective the policies and principles under which we are to operate. Although per sonality enters into and distinctly affects the minutia: of organization, organization must, to be permanently effective, be independent of the personality of any one man or group of men. The form of organization under which we are to operate must be determined only after a careful analysis of first : the problems which we encounter ; second: the conditions under which we must solve these problems; and to a less ex tent third: the character of the personnel avail able; and as the conditions vary, so must the solution (organization) vary. A study of the
evolution of organization not only reveals most interesting ramifications, but also may furnish invaluable instruction to one entrusted with the delicate task of molding the form of organi zation best adapted to any given The subject may profitably be viewed from two standpoints : organization in war, and organiza tion in industry. If we go back to primitive times we find comparatively small hordes of savages making war upon the neighboring tribes. The conditions under which they operated were simple : small numbers of war riors, individual bodily encounter with primi tive weapons only, a comparatively small terri tory covered on foot or on horse and hence an absence of the problems of engineering and transportation, maintenance largely individual by pillage, little or no division of labor, few ad ministrative or technical details, few problems of correlation, complete mobility. The prob lems were those of secrecy, surprise, control swift, absolute control in everything. The so lution was correspondingly simple: one-man control by the best, often the physically strong est, warrior. As is true generally in warfare, delay in execution becomes often more fatal than mistakes in details due to unbalanced judg ment. We thus get a pure ''line" form of or ganization — orders and directions being passed down directly from the leader to his warriors, each of whom performed all functions pertain ing to the work. Up until the extensive use of gunpowder in warfare the problems and the conditions under which they had to be solved differed comparatively little from those thereto fore encountered. We find the solution to minor changes to consist of minor extensions and developments of the previous form of or ganization —a delegation of supervisory powers to lieutenants immediately over the men, re porting directly to the one superior, who is thus somewhat relieved of the minute details of execution. With the development of modern warfare of course all this was changed. It was then no longer mentally or physically possible for the one strong man to maintain the personal touch and exercise the close supervision of all details of the operations, although it was still necessary for him to keep final control and au thority absolutely to himself. This in turn made necessary an augmented means of solu tion, and as a result we find the development of the staff — a cardinal principle of military organization to-day. Here we have a group of expert officers under the chief of staff, report ing to the officer in command upon the in numerable specialized and technical questions encountered in modern warfare, the com mander thereafter taking such action upon their recommendations as he sees fit and pass ing his orders down through the now numerous officers of the line until they finally reach the man in the ranks.