Text 3 Specialized Management

If engineering efficiency and production-line economy were all that mattered, much could be said for a public policy designed to put severe limits to corporate size. But there is more to productivity than engineering. To return to the example of the fruit cannery, the assembly of raw materials requires specialized knowledge of different kinds of fruit and their canning properties, moreover, somebody must keep track of crops in different areas and know when and where to buy, and in what amounts. Somebody must keep in constant touch with many markets for canned fruit to decide how much output will be needed and where it will go. If these decisions are not properly made, the engineering efficiency of the plant can’t be more than offset by marketing losses. To can a poor quality of fruit, or a kind that few people really want, or to pack it in cans of the wrong size or of poor design, is just as wasteful of resources as operating a plant that is too small to be efficient. Careful attention to such details is the function of specialised management; but the elaborate division of labor necessary for most effective use of management ability requires a workload large enough to keep manager employed at their specialities.

A company large enough to operate only one plant of the most economical size is often too small to specialize its management effectively. Full-time staffs devoted exclusively to production, marketing, purchasing, personnel, finance, and accounting can be kept busy only as adjuncts to a large productive operation that is spread over many plants.

Even more important is the great advantage of providing as wide a field as possible for the skill, imagination, and initiative of enterprisers. Steady rise in productivity and improvement of quality are the results of conscious human effort. Somebody must perceive the advantages of each specific change in a method of production, decide to adopt it, and be able to put the decision into effect. People with combination of ability, imagination, energy, discipline, and drive required for effective enterprise are probably our scarcest economic resource. It takes a large firm to give full employment to the talents of such people.

Assignments to text 4:

1. Read the text and enumerate all reasons for large firms.

2. Write down these reasons into your notebook.

3. Look through the previous three texts and identify the facts for or against large firms. Write down the sentences into your notebook.

4. Write a concluding paragraph with your judgement on the importance of a corporation taking advantage of the sentences that you’ve written down.

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