Samuel MacClintock, Ph. D.
Editorial and Educational Director,
La Salle Extension University
This work is especially designed to meet the practical every-day needs of the
active business man, and contains the fundamental and basic principles
upon which a successful business is founded, conducted and
maintained. To those looking forward to a business
career, this work forms the basis for a
practical and systematic course in
“Business Administration”
This work is especially designed to meet the practical every-day needs of the active business man, and contains the fundamental and basic principles upon which a successful business is founded, conducted and maintained. To those looking forward to a business career, this work forms the basis for a practical and systematic course in “Business Administration”
PUBLISHED BY
LA SALLE EXTENSION UNIVERSITY
CHICAGO
Copyright, 1910,
LASALLE EXTENSION UNIVERSITY.
BUSINESS ECONOMICS
¶ This treatise has been especially prepared by E. L. Bogart, Ph. D., Associate Professor of Economics, University of Illinois, and Author of Economic History of the United States; Hon. O. P. Austin, Chief of Bureau of Statistics, Department of Commerce and Labor; and John Bascom, D. D., LL. D., former President University of Wisconsin. It is supplemented by the writings of recognized experts in the production, preservation and distribution of wealth. The treatment is modern, popular and authoritative. The volume contains many timely and practical suggestions which can be applied with profit to any business. It is also arranged to serve as a quick reference work, and includes a complete table of contents, a comprehensive index and test questions.
Walter D. Moody,
Editor-in-Chief.
INTRODUCTION TO BUSINESS ADMINISTRATION.
BY WALTER D. MOODY.
General Manager, The Chicago Association of Commerce.
Author of “Men Who Sell Things.”
“The recipe for perpetual ignorance is: Be satisfied with your own
opinion and content with your knowledge.”
Business a contest of wits
This is an era of the greatest commercial activity the world has ever known. The development of business is one of the marvels of the new century. A few years ago science, as a factor in commerce, was little known and less appreciated. The amazing advantages to business of intellectual attainments were utterly without recognition. Today, however, business has become a contest in which the quickest perception wins, thus transforming the counting room into a battle ground upon which brain matches brain for supremacy and success.
Success—educated enthusiasm
Ah, that enchanting word, S-U-C-C-E-S-S. It does not require a magic key to unlock the door to business efficiency. There is nothing mystic, nothing mysterious in the applied method of the really resourceful men in this day of great successes, of marvelous achievements in business enterprise. The sum total is contained in two words, words that electrify, nevertheless. EDUCATED ENTHUSIASM.
Changing conditions make opportunities
The most formidable barrier to progress has always been the senseless opposition of those to whom it would be of the greatest benefit. Changing conditions are the order of the day, for enlightenment has worked wonders. In olden times, a man of affairs was obliged to guard his property and his loved ones by building a moat around his house and posting sentinels in and around his estate. The time is not long past when, because of prejudice, perversity or ignorance, many men believed that opportunity knocked only once at any man’s door. Today, thanks to deeper insight, most men believe that life itself is opportunity; that the very air we breathe is opportunity; that each new day presents broader opportunities for accomplishing
more because of better directed energy. This is not alone the accepted dogma of the man who is making his way in the world. It is the creed, doctrine, tenet or religion, whichever you may care to term it, of the great captains of industry everywhere.
New ideas count
The more successful the man, the more does he think, study, plan, as a part of his daily occupation in the development of the affairs in which he is interested. Newer and better ways to get things done is the business standard employed today by successful men in all lines. Only yesterday if a man of genius advanced a new idea, he found himself ridiculed and his innovation opposed on all sides because it was a new idea. Today, it is different. The man of ideas counts in the trend of affairs as he has never counted before.
Must keep step with changing times
Everything has a subjective reason. Progress is acting as a mighty dynamic force in changing men’s viewpoint of life and things. Suppose the stroke oar on a varsity crew, while in a race against an opposing crew from a competitive institution, should suddenly stop rowing in harmony with his associates and begin to row backwards—that crew would not get very far without trouble. Suppose a lawn mower should be reversed and forced to run backwards—there would not be much progress made in cutting grass on that lawn. Varsity crews and lawn mowers must move forward. Business men must advance with the times.
A great merchant in Chicago tells a good story of his youth. He was a member of a state regiment of militia. On a certain occasion, his company was sent out on dress parade. An old maiden aunt, with considerable colonial blood in her veins, took much pride in her nephew and his company. While reviewing the parade, she was suddenly heard to exclaim: “Why, every single man in that company is out of step excepting my nephew.” Most men who fail to get on in the world do not realize that success lies in keeping step—in making progress with changing conditions. They generally make the mistake of thinking that the world and everything in it is out of harmony with themselves.
New ideas worth searching for
A business man of successful experience realizes that ideas—newer and better principles of conducting business—are of the greatest value, and he also knows that it pays him to search for them. The same old way of doing things cannot longer be successfully employed month after month and year after year as under the old regime. The business man must be modern, up-to-date. The physician or lawyer finds that to compete successfully he is compelled to search
without ceasing in order that he may comprehend the advancement in treatments or procedures. “To the man who fails belong the excuses.”
Demand for trained men
President James, of the University of Illinois, was asked if there was any demand from business houses for college-bred men. His reply was: “The demand has been far in excess of the supply since courses in business administration were established in our institution seven years ago. Each year has brought many more requests than we have men to recommend.” Ten years ago President James would have been ridiculed for advancing this new idea for the establishment of a school of commerce in connection with a university. Today, commercial schools are a part of the regularly established courses of nearly all of the great universities of our country. Men trained in the theory, practice and administration of business will always occupy the best positions and will always command the greatest salaries.
Value of new ideas in business emergencies
All men fail at times in the accomplishment of satisfactory results in the various enterprises in which they are engaged, without being able to give an explanation. The principles that have been applied successfully for many years seem apparently to have counted for nothing. It is frequently evident that in such cases a very insignificant thing, a mere oversight perchance, has been the direct cause of the failure. To be able to put the finger on the precise cause of the lack of success in one’s method would locate the cause of the disaster. Then it is that a real appreciation of new ideas is fully realized.
Men paid for what they know—not for what they do
Failure is more often chargeable to a refusal to learn by mistakes how to avoid them than it is in making them. Experience is a good teacher, but who can deny the value to be gained in learning from the experience of others, for we cannot all have the same experience or the same view of similar experiences. There are many pathways to success, but the road of individual experience is narrow and rugged. It is a commonly accepted fact that for every ten dollars a high-salaried man draws, he receives nine dollars for what he knows and one dollar for what he does. On the same basis the successful business man, employing a large force of other men, realizes that his own greatest worth, as applied to his affairs, lies not so much in what he can do himself as how much he can encourage his employes to do. In either case, his own personal knowledge is the power behind the throne.
Knowledge in excess of present needs necessary
The man who would secure the largest net return from his individual effort in the field of endeavor, and he who would realize the greatest possible advantage from the efforts of those under his command must, of necessity, possess knowledge—indispensable perception far in excess of the needs of the moment. Discernment, like a bank account, soon runs out if it is overdrawn or if it is not continually replenished. In business the “checking system” of knowledge is the sort of account that pays best—not the “savings account system.” Knowledge that is simply corked up and allowed to accumulate cobwebs and rust can avail nothing. The sharpest vinegar is procured by constantly replenishing the old stock with new.
90% failures vs. 10% moneymakers
Reliable statistics prove that only about ten per cent of all people who engage in business are successful and make money; the other ninety per cent become insolvent and fail. That is, they do not actually encounter the sheriff, or go into the hands of a receiver, but they fail nevertheless to succeed in the sense of making money, and what other possible reason can anyone have for engaging in business if not to accumulate money?
Failures due to lack of intellectual capacity
Why do so many fail? Ask any credit man and he will tell you that it is not because of the lack of capital, or other material resources, but it is due primarily to a lack of intellectual capacity, the sort of brains that dig and work and sweat until they find a way to accomplish things; brains that go to the bottom of things; brains that are always looking for better results; brains that never abandon a problem until they have found a way to solve it. A friend once told me that he inquired of the manager of a house employing some three hundred traveling men how many salesmen they had. The manager replied, “Three.” My friend asked, “How’s that? I am told your force of traveling men numbers nearly three hundred.” “Ah, that is quite different,” replied the manager; “we have two hundred and ninety-seven traveling men, but only three salesmen.” Quite likely that manager’s estimate was intended to be taken figuratively rather than literally, but it serves to illustrate the fact that in this great United States there are millions of men, young, middle-aged and old, who are content to plod along in a mediocre sort of way, heedless or unmindful of the fact that opportunity, knowledge, possibilities, are calling, calling, calling to them to come up higher. There are hundreds of thousands of other men engaged in business who sit idly by while their trade, like the
sands in the hour glass, slowly ebbs away, and eventually is absorbed by their more progressive business neighbors.
Moneymaking and business literature
There is still another vast army of business men—salesmen, clerks and wage-earners of all classes—who are beginning to catch a glimpse of the dawning of a new business era, the greatest the world has ever known, an era impregnated with possibilities and opportunities for those who are ready with wicks trimmed and oil in their lamps. To the earnest latter class which is really desirous of profiting by the experience of others, there is no need of elaborating the possibilities embodied in this course of reading in Business Administration. This set of books, containing valuable business data on many subjects, thousands of pages telling the story of success illustrated by trained men whose names are respected everywhere, is intended to reach all classes. There is absolutely nothing in print that can even approach or can begin to compare with it in value as a reference library for business men or excel it as a complete course of instruction for any man desirous of making the best of his possibilities and opportunities in the kaleidoscopic age through which the business world is now moving.
Practical ideas best
The more practical the ideas, the better the basis for good work. Not long since, business men generally pooh-poohed the idea of employing in the conduct of their business anything new, which was taken from the writings and experience of others, such as is contained in this remarkable series, contributed to by some of the brightest minds in the business world today. There is, however, in these days unmistakably a hungering and thirsting for just this new sort of literature. It fills a long-felt need—fills it exactly, completely, satisfactorily. Being the author of a work on salesmanship which has had a countrywide circulation, I have been literally besieged by business men everywhere asking me to recommend books treating of successful business methods, and have been chagrined to find how limited was the supply. The man who formerly was prejudiced against such sources of information must now step aside and make way for progress or unite with the popular demand for more education and better methods.
Cannot afford vs. can afford
Show me the man who says he has no patience for such things, and I will show you a man, like the stroke oar and the lawn mower, who does not believe in moving forward in progress. Show me the man who says he has no time to read of new methods and principles, and I will show you the one who utterly fails to perceive that familiarity with business literature of this kind means pecuniary advancement. Show me the man who says
he cannot afford to invest in such a set of books, and I will show you one who apparently CAN afford to waste his energy in misdirected effort—that energy and effort which are to every wage-earner and tradesman both his stock in trade and his invested capital.
Failures unnecessary
Someone has said, “There are three kinds of people in the world—the Can’ts, the Won’ts and the Wills. The first fail at everything; the second oppose everything; the third succeed at everything.” I would add a fourth kind—the largest class of all—the Don’t Trys, the “Oh-what’s-the-use,” “It-doesn’t-interest-me” sort of people. Their name is legion; their fault is lack of confidence. Knowledge is the greatest inspiration of confidence to be found on earth. You may not personally be held in the hope-paralyzing bondage that produces the “Oh-what’s-the-use,” or “I’m-not-interested” germ, but if you are not, you are exceptional. Most people are, and that is the reason that such persons are just about what luck, good fortune or chance make them, succeeding if fortune favors them, failing if they are left to depend upon their own resources. Result: Nine fail where one succeeds.
It is very fortunate, indeed, for most men that so much of their happiness depends upon success. There is nothing on earth quite so terrible to think of as failure, especially that due to lack of effort, unless possibly it be the failure of a man who lacks the courage or initiative to try to make the most of himself, and thus lets his best opportunities escape him. And this last is really the most pitiful thing that can befall a man. It is well enough to plan opportunities, but if we had the wisdom to take advantage of such opportunities as naturally come to us, results would more often be found in the balance on the right side of the ledger. And so I am of the opinion that a clear explanation of why a very large class of people do not succeed is found in some of these expressions—“I don’t care,” “I can’t,” “It doesn’t interest me,” or “Oh, what’s the use.”
Basis of all business success
One of the great objects set forth in this Business Administration series is to supply the positive energy which begets courage, confidence, initiative and success. We want to make you feel the necessity of doing some reading, a little plain thinking, and to make as clear as possible the important things that are involved in the serious but very fine game of business.
With business becoming with each succeeding day more and more of a science, it is high time to understand what is essential to it. Speaking of the subject of “Organized Business,” a great authority recently said, “It is time even for business men to understand business.” Again, the purpose of this course in Business Administration is, if possible, to measure the power and principles of business, to trace their ramifications, define
their elements, get hold of their vital fundamentals, and so comprehend them, both in technical detail and as a mighty unit. And I am confident we have done all this. I find that at the foundation, the machinery of business is simple, but whether it is plain or complicated, all who would succeed must make every effort to comprehend it thoroughly. All I care to emphasize at present is the great truth that knowledge, established and classified, is the basis of all business success. This is clearly established in this course of reading, and I am trying to incite your imagination in writing of its merits just as I would endeavor to enable you to realize it if I could talk to you personally right across my desk. The observant man can see clearly the things I am talking about, but to most men the mind’s eye perceives not by observation, but only when the imagination is stimulated. So I would stir all men to look earnestly into these things, with a view to their personal betterment.
Business axioms simple to understand
Business is far more than business as it is commonly understood. It is a science, and it is the eager, practical minds of business men that we shall endeavor to convince first of that fact, and our reasons for addressing those principally concerned are especially good. Why? I have found that in writing about business whenever I was able to make the principles so plain that business men understood them, everybody else did, so it is to be expected that if business axioms can be made simple enough for business men to understand them, everyone will apprehend them. Everybody. And it is everybody that we are attempting to reach.
Knowledge is power
For nearly thirty centuries men have recognized the concrete wisdom of Solomon’s proverb: “A wise man is strong; yea, a man of knowledge increaseth in strength.” Yet we have been slow in making its application universal to the race. But we are beginning to understand that the power inherent in knowledge applies as well to commercial and industrial as to scholastic, political and social life, as well to the counting room as to the pulpit, as well to the shop as to the university, as well to the farm as to the bar. Knowledge is power and is the only source of real intellectual sovereignty that the Creator has ever entrusted to men.
In conclusion, I would say that these words are addressed to the business men of America, and this designation includes the banker and his clerks, the farmer and his sons, the lawyer and the law student, the financier and the man who sells bonds and stocks, the merchant and his clerk, the accountant and the bookkeeper, the manager and his assistants—the ambitious young men of the Twentieth Century type, contemplating the pursuit of any business, trade or occupation.