Professional men buy their instruction, books, instruments, office furnishings, clerical assistance; sell their services.
In every undertaking, revenues are produced through salesmanship. Every business and every profession has something to sell, and its financial success depends largely upon the quality of salesmanship employed. Whether it be a professional man with nothing but his services to sell and no other means of advertising than through work well done, or a gigantic commercial organization with its extensive advertising campaign and many salesmen, a selling organization exists in some form. And before anything can be sold it must be procured, or bought.
On this question of the universal application of the principles of organization, we quote from a valuable contribution in The Engineering Magazine, by C. E. Knoeppel:
"While business as it is now conducted is not as simple as it was in the barter days, it must not be inferred that this segregation of authority is synonymous with complexity, for its very purpose has been to simplify, and that is what it has accomplished. It is only where this segregation has been the result of lack of thought and proper attention, or other like causes, that we find a complex and unsatisfactory condition of affairs. In fact, there is all about us sufficient evidence that many commercial enterprises are being conducted along lines that, as far as evolutional development is concerned, are several stages behind the times.
"Let us suppose a case, which will apply in a greater or less degree to the majority. In the earlier development, we will say that the founder of the business was able, on account of its small size, to make what sketches he needed, solicit orders, see that they were filled, perhaps take a hand at the making if occasion required, see to the shipments, and attend to the collections and the keeping of his few accounts. He finds that the business grows, and eventually places a man in charge of certain branches while he looks after others. The accounts eventually require more attention than he can give them so he engages a bookkeeper in order that he may be relieved of the work. He finds that the quantity of materials received and shipped amount to enough to warrant a receiving clerk as well as a shipping clerk, and, to handle this material from its inception to shipment he conceives the idea of placing a man in charge as stock clerk. He then adds a purchasing agent, in order that he may be relieved of the detail and that purchases may be made most economically; a man is placed in charge of the orders; foremen are placed in charge of certain men in the shops; the details connected with making plans, drawings, estimates, etc., are taken over by a practical man; his manager is given a man to look after the shops or engineering branch; while the commercial branch with its many details is placed in the hands of another. As the evolution continues, the selling branch is assumed by one man; cost details are looked after by another; a chief inspector is added in order that all work may be shipped according to specifications; the engineer, who before had been a sort of jack of all trades, is placed in charge of certain work, while an electrician is engaged to look after this particular work; and so this segregation continues as the development continues.
"Perhaps it is not to be wondered at that the founder, in looking backward, is inclined to pat himself on the back when, in a reminiscent mood, he considers what he terms 'remarkable development.' He considers that he has been wonderfully successful in building up a business which at the beginning was so small as to admit of his supervising every detail, while today he employs a dozen men to do the work he once did. There is no getting away from the fact that it is this same feeling of self-satisfaction that is responsible for a large number of faulty organizations, for if we should tell this manufacturer that his business is far from being as successful as it is possible for it to be ... he would vigorously resent any such accusation; but the fact remains that it is not the success it should be, for the very reason that the development has been allowed practically to take care of itself. New men were added, new offices created, only when absolutely necessary, each newcomer being given a general idea of what was expected of him, and not knowing, not thinking, or perhaps not having the time to give more than passing attention to the matter, the proprietor did not consider the fact that his business was a unit, with each worker a part, having a distinct relation with every other worker. Hence, as the efficiency of any organization is directly in proportion to the care with which these relations are considered and treated, his organization naturally fails to attain that degree of efficiency obtainable, and for this condition he, and he only is responsible."
11. Departmental Authorities. The next logical step in the development of our organization is an analysis of the departmental organizations. We have seen how the operations of the business are divided among several divisions or departments. The reason for such divisions is apparent. In a large business no one man can personally supervise all of its activities. Each division is engaged in certain activities that demand the immediate supervision of specialists. One man is a specialist in advertising, another in sales plans, others in purchasing, specific manufacturing operations, or the design and maintenance of appliances intended to improve the product or to reduce costs.
To reach the highest state of efficiency in every department of the business, these specialists must be employed, which is another reason for organizing a business along the line of its activities, and without respect to individuals.
Before we can decide what manner of man should be placed at the head of this or that department, we must study the duties of the position, the responsibilities involved, the authorities to be assumed. To present this problem in graphic form, the chart (Fig. 5) is designed. While the arrangement is not inconsistent with Fig. 2, this chart of the same class of organization is laid out along the lines of authority. It shows both the authority of the department head and the necessary activities of his division.