9. Need for leadership.—As industrial and com mercial enterprises expand, the demand for able lead ership becomes more and more insistent. It is not only among the highest officials of the modern corpora tion that executive ability of a high order is required. There are many positions of lesser rank where men are charged with the handling of property and the control of men, on a scale which far exceeds that of the independent enterprises of earlier days. The large revvards in industry and commerce appear to be reserved for the executives who, in addition to the mechanical appliances which human ingenuity is con stantly devising, bring to their .task the ability to or ganize and to administer vast masses of capital and great numbers of laborers.
10. What is administration?—We have used the term administration as one which implies some degree of excellence and merit, and thruout this work shall continue to do so. Strictly speaking, the term is neu tral; it means nothing more than the conduct or management of affairs. Whether guided by reck lessness and ignorance, or by caution and wisdom, it is none the less administration. Since business is con ducted for profit, and since bad administration cannot last, it is natural that the term business adrninistration should carry the implication that it is backed by execu tive ability. It is therefore to be expected that our consideration of business administration should con cern itself with the study of the successful conduct of business affairs.
We are concerned, therefore, with business that is guided by executive ability. No phrase is more com monly used and none more successfully eludes precise definition than the rare gift of executive ability. It is a compound of many things. Executive ability has sometimes been described as "letting others do the work." It would be more exact to say that such abil ity consists in doing nothing which others can do, and in selecting others who can do well the work in trusted to them. One might perhaps add that prog ress in executive authority consists in a nice discrimi nation as to what may safely be deputed to others, and what must be reserved for the leader.
11. Test of the administrative function.—The work of the executive often differs from that of his sub ordinates, less in the kind than in the degree of re sponsibility which is involved. The stenographer knows what limits are placed upon his activities ; the man at the lathe is seldom. troubled as to what consti tutes his task. From the routine operations of the
humblest workers to the activities of the directors of an enterprise, the duties of each position as it rises in the scale of responsibility seem to lose some degree Of definiteness. This appears perfectly natural when we examine the nature of responsibility in business.
Company officials are fond of pointing out to their subordinates the dire consequences which follow cleri cal errors. Mr. Smith of VVherenot, California, sends in his check for $146.92 in full payment for goods ordered from the New York Suit Company. The cash clerk who enters the order carelessly omits to write the figure 1 in the amount, making it $46.92. The order goes thru, but the credit department orders the goods shipped C.O.D., balance $100.
Now Mr. Smith lives miles from the nearest rail road station—a three days' journey by wagon. The agent, in his notification of the arrival of the goods, supposing that Mr. Smith knows that $100 is due, makes no mention of the fact. When Smith comes to the station for the goods, the agent refuses to deliver them, in spite of Smith's protest that the money has been paid in full in advance. Smith has to drive back—another three days' journey—and be gin a painful correspondence with the New York firm. Of course, the cash clerk's mistake is found out and the railway agent is instructed to release the goods, but Smith must make another round trip of 180 miles. To square itself with Smith, the New York Suit Company pays Smith's expense bill of $40 and presents him with a handsome watch besides, but it loses a customer.
The clerk has injured the standing of the house with the customer by a purely mechanical act which is definitely measurable in its results, i. e., leaving off the figure 1, and the consequent error of $100 in the ac count loses a customer. The management hopes to renew business relations with the customer and adopts measures to effect this. Here then rests the distinc tion between the functions of the clerk and those of the manager. The clerk has a definitely litnited scope of activities ; the manager deals with relationships which require the use of judgment. The broader the influ ence of the executive, the greater is his responsi bility, and the higher is his position. The manager of the New York Suit Company handles Mr. Smith's case because of the responsibility involved—nothing less than the reputation of the house is at stake.