13. Management units the basis of organization has been said that 99 per cent of the enter prises now in existence have no such thing as a chart or diagram showing the essential units of which their organization is composed. Probably 50 per cent of the managers never heard of such a thing. No doubt, managers are not generally aware of the aid which such a chart would be to them. First, it throws into bold relief the whole organization ; secondly, it shows, in a form that can, be visualized, the weak or unde veloped parts of the management.
An organization that cannot be charted so as to show the well-defined relationships cannot be said to be scientifically managed. Mr. H. F. J. Porter has said: Management is like a coaching outfit. The coach must be built right before its service is at its best. All its four wheels must be. of the correct size and its body of correct propor tions. The horses must be well-matched and strong enough to pull the coach. One must not be a dray-horse and another a trotter. The harness must be properly suited to the horses so that the collars will not chafe and irritate them and the traces must be of the same leng.th, so as to pull evenly and not permit one horse to get his legs over the other horse's trace and interfere with him. If all these requirements are not met, there will be danger of not running straight. Merely speaking kindly to the horses, or patting them on the neck, or giving them sugar, or plying the whip, is not going to reach the cause of the trouble. But when this organiza tion is properly arranged so that everything is in its right place, without overlapping or interfering, it is ready for the skilled coachman to get up into the box, take the reins and drive the coach over such roads as he may meet. There is some assurance.that it will stay in the middle of the road with out any inherent tendency to go over into the ditch on either side. The man on the box is the manager, and upon his gen eral knowledge of conditions and his skill in handling the organization will depend the efficiency of the organization. This man is an entirely different one, however, from the one who designed the coach or the harness, altho he should have very much to say about the selection of the horses.
Without going into the details of organization which this analogy suggests, it will be sufficient for present purposes to note that, generally speaking, any organization has four basic departments, which –may be compared to the four horses drawing the coach. They are the financial, the sales, the produc
tion and the record departments. Each of these I should be as independent in its adion as any one of the horses, but all should be so thoroly related by their harness as to constitute a uniform and united force in pulling the business. In other words, these units of management should remain distinct, but their efforts should be so coordinated as to bring about a unified result.
14. Duties of the management units.—The duties of the corporate management, as we have seen, are (1) to furnish funds and (2) to determine the gen eral commercial policy of the business enterprise. The second group of duties becomes a unit which carries on the productive functions ; this in turn is divided into the staff organization—the chief duty of which is the advising of the general manager upon various technical matters—and the operating unit, which is generally called the line organization.
The operating unit is the one in which we are at present peculiarly interested. This unit, as we found, was divided for purposes of more efficient manage ment into four basic departments. The duty of the first of these departments is to collect and disburse the money. The duty of the sales department is to ob tain orders for work by which the third or production department is kept going. The third department then converts into finished goods the orders which it has received. It will be noticed at once how de pendent this department is upon the first and second departments for equipment, and then in turn how dependent these departments are upon the production department. If maladjustment is to be avoided, these departments must be equally balanced and normally independent. This requirement leads us to the fourth or record department, which is intended to keep account of all that happens in the other depart ments and thus maintain ai?L operative balance. It provides records for the receipt of all raw material, holding it back until it is needed by the production de partment, keeping track of what the latter does with it, taking it back as finished products, handing it over to the sales department and telling the financial de partment how much it has already cost, how much more it will cost before it is sold, and how much should be added for profit in order that all the departments may be kept in good condition continually.