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BUSINESS
ORGANISATION



BUSINESS
ORGANISATION



BY



H. E. MORGAN

AUTHOR OF "THE DIGNITY OF BUSINESS
"THE MUNITIONS OF PEACE"



LONDON
EVELEIGH NASH COMPANY

LIMITED

1917






V\



<<






MAIN LIBRARY






AUTHOR'S NOTE

A GLANCE at the Contents page of this
volume will show that it is composed of
a series of short essays or articles covering a
very wide field.

They are addressed to the manufacturer, the
merchant and the shopkeeper, as well as to
members of the general public who realise the
importance of business efficiency to the nation.
It is obvious that such subjects as " Employers
and Research," " Limitations of Production,"
or " Modern Retail Service," cannot be treated
exhaustively within these limits ; but both the
business man and the general reader are apt,
I think rightly, to be impatient of a long and
formal treatise on theories of commerce. What
I have aimed at is to provide " pointers,"
dealing with practical business questions from
a business man's point of view, which will
encourage the reader to think out further
developments for himself.

Some of these articles have appeared at
various times in the " Business and Organisa-
tion " Columns of the Daily Telegraph, and
are reproduced by courtesy of the proprietors
of that journal. The interest which they

Y

418119



vi AUTHOR'S NOTE

excited both at home and abroad, as wit-
nessed by many letters received from repre-
sentative business men, led me to believe that
their collection in a more permanent form
might serve a useful purpose, especially as
the subjects with which they deal are of
permanent interest and will be particularly
important during the period of reconstruction
which must follow the war. They have been
revised, and in part re-written, re-arranged and
combined with a considerable amount of new
matter, so as to form a connected survey of
business problems both on the manufacturing
and the distributive side, with special refer-
ence to the new factors introduced by the war.

Whatever may be the economic policy of
this country in the future, it is on the skill,
initiative and organising capacity of British
business men that our national prosperity will
ultimately depend. The manufacturer, the
merchant and the shopkeeper are all playing
an essential part in the development of our
national life. It is in the hope that the points
here discussed may be of some service to
them in their Task, and may assist the public
generally to realise its nature and the way in
which they too can co-operate, that this book
is published. H. E. MORGAN.



CONTENTS



PAGE

INTRODUCTION : THE WAR AND A BUSINESS AWAKENING i



PART I
NATIONAL ORGANISATION

I. THE BUSINESS COMMUNITY . . .13

II. COMMERCE AND THE STATE: A MINISTRY OR

AN AGENCY?
PART I. CHARACTER AND OBJECTS . . 19

III. COMMERCE AND THE STATE : A MINISTRY OR

AN AGENCY?

PART II. DIRECTION AND METHODS . . 25

IV. ADVERTISING THE BOARD OF TRADE . .32
V. A BUSINESS REGISTER . . . -39

VI. STATE CONTROL OF EMIGRATION. . . 43

VII. EMPLOYERS' TRADE UNIONS: WHAT THEY Do 47

VIII. EMPLOYERS AND RESEARCH . . 52

IX. DESIGN IN BRITISH GOODS . . .56

X. EDUCATIONAL FACILITIES FOR EMPLOYEES . 62

XI. UNIVERSITY TRAINING FOR BUSINESS . . 70

XII. FALSE ECONOMY: A POST-BELLUM DANGER . 77

PART II
THE FACTORY AND THE WORKER

I. THE GREAT OPPORTUNITY . . .85

II. THE INDUSTRIAL OUTLOOK . . .91

III. INDUSTRIES TO BE REGAINED : I. COTTON

HOSIERY . . . . .96

IV. INDUSTRIES TO BE REGAINED: II. CHINA AND

EARTHENWARE . . . . . 101

V. INDUSTRIES TO BE REGAINED: III. LACE AND

LACE CURTAINS 106



viii CONTENTS

PAGE

VI. INDUSTRIES TO BE REGAINED : IV. PAPER AND

CARDBOARD . . . . . in

VII. THE FACTORY EXODUS . . . .116

VIII. LIMITATIONS OF PRODUCTION . . .122

IX. THE HUMAN FACTOR IN MANUFACTURE . 129

PART III
THE OFFICE AND THE STAFF

I. THE BREAK-UP OF TRADITIONS . . . 135

II. OFFICE EQUIPMENT . . . .141

III. THE RETURNED SOLDIER : His BUSINESS VALUE 153

IV. WHAT SHALL WE DO WITH OUR OFFICERS? . 157
V. WOMEN WORKERS : DURING THE WAR AND

AFTER ...... 165

VI. SUPERFLUOUS EXECUTIVES . . .169

VII. THE DILUTION OF OFFICE LABOUR . . 173

VIII. DON'T DO IT YOURSELF . . . .177

IX. ROUTINE AND EFFICIENCY . . .181

X. DAYLIGHT SAVING AND OFFICE HOURS . . 186

XL THE GIVING OF REFERENCES . . .189

PART IV
THE ART OF SELLING

I. THE CUSTOMER AS AN OBJECTIVE . . 195

II. CO-OPERATION IN THE EXPORT TRADE . . 203

III. INVESTIGATION ON THE SPOT . . .208

IV. STARVING GOODWILL . . . .214
V. THE IDEAL ADVERTISING MANAGER . . 218

VI. MODERN RETAIL "SERVICE" . . .221

VII. THE MAGNETIC WINDOW .... 225
VIII. ILLUMINATION : THE LESSON OF THE STAGE FOR

THE SHOP ..... 230

IX. THE LOCAL SHOP : How IT CAN HOLD ITS OWN 235

X. FORM-LETTERS . . . . .239

XI. THE RESPONSIBILITY OF THE PURCHASER . 244

INDEX ... .... 249



BUSINESS ORGANISATION

INTRODUCTION

BUSINESS AND THE WAR

FOR two years the attention of the whole
country has been fixed upon the progress
of the greatest conflict in history. We have
all felt that everything which might divert our
energies from the actual conduct of the war
must stand on one side, and that even questions
of great importance must wait for consideration
until the close of the struggle, if they were not
directly related to the one supreme object.

But the war itself has compelled us to realise
more fully than ever before the part played
by trade and industry in our national life.
Factories and finance have proved themselves
to be military factors as important as armies
and Dreadnoughts. The unprecedented demand
for ammunition and equipment has taught us
the immense value even for war purposes of



2 BUSINESS ORGANISATION

our' manufacturing capacity and our industrial
organisation. The gigantic burden of war
expenditure has brought home to the most
indifferent how important an element of our
national strength is the trade from which our
wealth is derived. It is not through any in-
difference to the overwhelming interest of the
struggle, but in strict accordance with its
developments that these same two years have
seen an increasing emphasis laid upon the
importance of industrial efficiency and business
organisation.

We have to remember also, that the years
which follow the war will be years of strenuous
effort. To make good the drain upon our
resources, to support the burden of war taxa-
tion, to resume and maintain our position in
the foreign markets, will tax our powers to the
uttermost. Whatever developments interna-
tional trade may take after the war, it is certain
that we shall be faced by very keen competi-
tion. It is not only a question of Germany.
America and other neutral states have found
a rare opportunity in the limitation of our
energies by the necessities of the war. We
shall have to struggle hard to get back the
trade which has temporarily passed to others.
But in order to sustain the burden of our
war debts and avoid the danger of industrial



INTRODUCTION 3

troubles following on the European conflict,
we shall need not merely to regain our old
position but, if possible, to improve it.

The return from war to peace conditions will
in itself involve many difficulties and dangers
which we must recognise clearly in order that
we may surmount them. The problem of
demobilisation alone is a gigantic one. Some
millions of men who have joined the colours
will have to be reabsorbed into the labour
market. Some of them will come back to
places which have been kept open for them ;
others, probably the great majority, will have
to look for new sources of employment. Thou-
sands of munition workers will be seeking to
return to their old jobs. The problem will be
complicated by the presence of a great number
of new workers, especially women, who have
gone into offices, shops, and factories to take
the place of absent men. The readjustment of
working conditions, the use to be made of the
new plant erected for war purposes, the direction
of trade into new channels all these and many
other questions arising out of the dislocation
caused by the war, will require careful and
skilful handling.

It will not do to put off consideration of
these things until the new developments are
actually upon us. The change from peace to



4 BUSINESS ORGANISATION

war found us in many ways unprepared, and
we have suffered heavily for our unprepared-
ness. We must see to it that the change from
war to peace finds us ready. But if we are to
be ready we must not allow the essentials of
our business policy to be overlooked even
amidst the stress of the conflict.

While the war has introduced new com-
plications into our business life, it has at the
same time acted as a stimulus to invention and
effort. The necessity for adapting ourselves
to new and unforeseen conditions has had the
effect of breaking up many old traditions and
prejudices. The sudden strain put upon certain
of our industries, and the depletion of office
and works' staffs by military requirements, has
led to the tapping of new labour resources and
to the introduction of many improvements both
in plant and machinery and in our working
methods. There has been a general process of
"speeding-up" which has taught us many new
ways of increasing output and avoiding waste
of time and labour. Even from our enemies
themselves we have received a useful impetus
towards greater efficiency. The exertions of
which they have proved themselves capable in
the production of war material, and the certainty
that the same energy and power of organisation
will be applied after the war to an attempt



INTRODUCTION 5

to regain their place in the world markets,
have directed close attention to their business
methods. In these methods there is much that
we have no wish to copy ; but their more legiti-
mate achievements in the matters of technical
education, of scientific research and business
organisation, will unquestionably act as a spur
to greater efforts on our part than we have
previously made on these lines.

Indeed, the greatest lesson which we have
learnt from the war is the importance of organ-
isation. It is the wonderful " State machine,"
the power of a people highly organised through-
out for certain definite ends, by which alone
Germany has been able to prolong the struggle.
It has been by the organisation of the Allies'
latent resources that the machine has at last
been overthrown.

It is quite true that discipline and organisa-
tion on the German model are associated with
many evils, with a grossly material civilisation,
a blind worship of force, and the loss both of
individual liberty and personal initiative. But
this does not prove that organisation itself is an
evil, only that it is fatal to erect it into an idol.
The man must be master of the machine.

The British trader is proud, and is rightly
proud, of his sturdy independence, his readiness
to accept risks, his reputation for straight deal-



6 BUSINESS ORGANISATION

ing and honest workmanship. To exchange
these qualities for any system of organisation,
however complete, would be a disastrous bargain.
Yet we can hardly rest content with our old
attitude of laissez-faire. While our persistence
and powers of recuperation may enable us to
outlast our rivals, the policy of " muddling
through " is a wasteful one in peace as in war.
We can see now the advantages which the
Germans have derived from the assistance
given to commerce by the State, from their
excellent consular and commercial intelligence
system, their scientific education and their big
trade combinations.

The task before us is to adapt to our own
uses what is good in German methods without
detriment to our own qualities. We do not
want the British trader to lean on the State for
support ; we do not want politics and trade to
go hand in hand as they do in Germany. But
we are entitled to ask for greater consideration
for business interests in matters of education,
the encouragement of research, and the collection
and dissemination of commercial intelligence.
We do not want to back applications for con-
tracts with diplomatic pressure ; but we do
want closer co-operation between our consular
offices and our merchants abroad. We do not
want the evils of the Trust and Bounty Systems



INTRODUCTION 7

to be introduced into this country ; but it is
clear that there is room for a much greater
development by our traders of the policy of
sinking individual rivalries for co-operation in
the pursuit of common ends, whether to obtain
greater efficiency in production or for the
cultivation of foreign markets.

The close of the war gives us a great oppor-
tunity to put our house in order in these
respects. It has shaken the most apathetic into
an appreciation of realities. It has accustomed
the most conservative to the contemplation
of drastic changes. It has produced striking
experiments in State control and State aid.
Above all, it has given us a new sense of
national unity and national needs.

In the foreign markets it has given us the
advantage of eliminating for two years or more
one of our principal rivals ; and the disgust
caused by German non-respect for neutral
rights will also, in many cases, operate in our
favour.

In order to take advantage of this opportunity
it is necessary that we should, as a nation, think
out for ourselves as clearly as possible the
principles of our trade policy and the essentials
of business success. And in doing this, there
are two great and common errors which we
must be careful to avoid. It is very easy, in



8 BUSINESS ORGANISATION

discussing a single great commercial question
such as that of Protection or Free Trade, to
forget the importance of what may seem to be
uninteresting details, such as the waste of time
and energy which arises from the use of out-
of-date premises or adherence to an unsyste-
matic routine. Yet the increase in national
efficiency which would come from an all-round
improvement in these respects would be sur-
prising. We must not neglect the big schemes ;
but if every manufacturer, trader, and shop-
keeper were to set to work to cut out all waste
of labour and material and bring the equipment
and organisation of his establishment up to the
level of the best existing examples, we should
add a big percentage to the national output.
Again it is easy to concentrate on one side
only of the business process and to forget that
the making of an article, its transport to the
centre of distribution, and the sale to the
customer are all really parts of the same trans-
action. Lavish display of plate glass and
striking advertisements will not sell an article
if it is not well designed and well made. On
the other hand, it is of little use to produce
unless you can bring the product to the notice
of a buyer and persuade him of its value.

It is in the hope that it may contribute to
this process of thinking out the problems of



INTRODUCTION 9

business organisation that the present volume
has been written. Its first section deals with
general questions of national organisation, the
r61e of the State and of big business combina-
tions, the linking up of science and industry,
and the business side of education.

The second section deals with the industrial
or manufacturing side of business, the conditions
which are likely to obtain after the war, the
relations of employers and employed, and some
examples of the manner in which industries
which have been lost to this country in the
past may be regained.

The third section deals with office organisa-
tion, the improvement of equipment and staffs,
the problems of demobilisation, and some general
questions of business policy.

The fourth section deals with the art of
selling, the cultivation of foreign markets,
publicity, salesmanship, and the methods of
retail trade.

In each section the first article forms an
introduction sketching the general lines on
which the particular phase of business treated
in the section must be approached, and show-
ing the relation of the various separate points
dealt with in subsequent articles to the question
as a whole.



PART I
NATIONAL ORGANISATION



I

THE BUSINESS COMMUNITY

IF we ask ourselves what is the most remark-
able effect of the war upon our outlook
and habits of thought, we shall probably find
that it consists in our deepened consciousness
of corporate life. It has been brought home
to us very forcibly that we are members of
a community, suffering when the community
suffers and contributing to its prosperity by every
bit of honest work which we do in our respective
jobs. In other words, the war has deepened our
sense of social responsibility. It has also
taught us that in order to obtain the best
results for the community as a whole, the work
of the individuals who compose it must be
so directed and co-ordinated that there may be
no duplication of effort or dispersal of energy.
The team must learn to pull together or the
individual abilities of its members will not save
it from defeat.

One of the greatest needs of the future is
that we should carry this principle into our



14 BUSINESS ORGANISATION

business life much more thoroughly than we
have done in the past. Napoleon's description
of the British as "a nation of shopkeepers"
was grossly unjust if it was intended to imply
that our outlook was limited to trade considera-
tions, or that we could be swayed only by
mercenary motives. But it is a simple fact
that a country whose people depend upon a
world-wide commerce for the very necessaries
of life must be fundamentally a business com-
munity. Our national ambitions and interests
embrace a great deal besides business ; but it
is altogether a false standard of values which
prevents any of us from recognising that our
status as a business community is an essential
and honourable part of our national life.

In the past this sense of corporate life has
been too much lacking in our business outlook.
We have been too much accustomed to look on
each man's business as a purely personal affair,
and to consider matters of trade and industry
as rather beneath the attention of those who
direct our corporate action.

We may hope that the war will have brought
about a change in this respect. It has demon-
strated clearly the enormous importance of
maintaining our commercial and financial sta-
bility, and it has illustrated unmistakably the
advantages of co-operation and organised effort.



THE BUSINESS COMMUNITY 15

The object of this section of the present
volume is to consider the nation as a Business
Community in some of its more important
aspects, and to suggest various ways in which
our commercial efficiency can be promoted by
combined and organised action.

Articles Nos. 2 to 6 deal with the role of the
State and with the means by which the State
can co-operate with the individual trader. It
is too often assumed that the encouragement
of trade by the State is purely a matter of its
fiscal policy. The question of Protection, or
Free Trade, is indeed an important one, and
is not likely to be overlooked. But whether
under Free Trade or a Protective Tariff there
are other ways in which traders can be assisted
by the State, which are less discussed and are
sometimes in danger of being forgotten.

Nothing could be more disastrous than that
the desire for State support should supplant the
individual initiative by which our industries and
commerce have been created and developed.
Nor is the close connection of trade questions
with foreign policy without dangers, of which
German history gives many obvious examples.
But without any prejudice to the necessity for
individual exertion or to the integrity of our
politics, there is a vast and little cultivated field
for State action in co-ordinating the efforts of



1 6 BUSINESS ORGANISATION

our manufacturers and merchants, centralising
and disseminating information, and generally
putting its vast organisation at the service of
traders without fettering the freedom of their
separate activities. Striking illustrations of
the manner in which the State can regulate
and support the activities of traders have been
given during the war by, e.g., the financial
arrangements which pulled us through the
economic crisis of the first few weeks, the steps
taken to regulate the exchanges, the activities
of the Ministry of Munitions, and the operation
of the State Insurance Scheme for merchant
shipping. It is the combination of individual
enterprise with State backing and encourage-
ment which has enabled us to keep our trade
going and our shipping afloat in every sea
through all the vicissitudes of the struggle.
Only a few examples of the manner in which
the State could extend this kind of support to
British trade in times of peace can be given
here ; but others will readily suggest themselves,
and it is recognition of the principle which is
the point of first importance.

Apart from State Organisation, there is room
for a much greater degree of co-operation
amongst manufacturers and traders for the pur-
pose of raising the general level of efficiency
in British trade. The competitive spirit is a



THE BUSINESS COMMUNITY 17

valuable spur to effort as well as representing
an ineradicable human tendency. But while
the rivalry between firms engaged in the same
line of business may be keen, it is to the interest
of each that the general level of efficiency in
their particular trade should be a high one as
compared with that existing in foreign countries.
The reputation of British goods of every class
is a matter of concern to all who are engaged
in making or selling these goods. It is a
matter of the first importance too, to all traders,
that the trade of the country as a whole should
be prosperous, in order that people should have
money to spend and make the home market
a good one. Articles Nos. 7, 8, and 9 deal with
two or three characteristic examples of the
way in which these ends may be attained by
co-operation amongst merchants and manu-
facturers.

The provision of a sufficient supply of in-
telligent and well-paid workers, both in the
workshop and the office, is a primary essential
of business prosperity. This is a matter in
which both the State and the employer are
concerned, and in which both can contribute
largely to secure the desired results. In
general it will be for the State to endow and
maintain educational institutions and to regu-
late the facilities which they provide and the



1 8 BUSINESS ORGANISATION

standards which they set. It is for employers
as a class to afford to their employees an
opportunity to take advantage of the facili-
ties which the State provides, to encourage
them to do so by finding openings for those
who acquire the necessary qualifications, and
to co-operate with the educational authorities
in devising the system of education which will
give the best qualification for business life.
Articles Nos. 10 and 11 discuss questions of
commercial education from both these points
of view.

Finally, Article No. 12 contains a note of
warning as to one of the greatest dangers
which confronts the business community to-day
the danger that education, research, and the
pursuit of efficiency generally may suffer from
an outbreak of false economy, due to a reaction
from the lavish expenditure necessitated by the
war. The desire for retrenchment is natural
and justifiable, but it must not be gratified at
the expense of our future efficiency.



II

COMMERCE AND THE STATE: A MINISTRY
OR AN AGENCY?

PART I. CHARACTER AND OBJECTS

IT is becoming generally recognised that
private enterprise, on however enlarged a
scale, cannot entirely meet the business require-
ments of the future. Government support of
trade more vigorous and comprehensive in
character than has heretofore been offered
must be insisted upon. The problem of find-
ing work for the people and markets for the
product of that work is essentially a national
problem, to be dealt with by national action.
Even now, the Board of Trade regulates and
encourages the development of commerce.
It has shown great energy in the performance
of these duties, but it must be remembered
that they form only a very small part of the
responsibilities of the department.

The need has been felt in the past, and will
be still more seriously felt in the future, for a



20 BUSINESS ORGANISATION

new method of dealing with the development
of British trade, of co-ordinating the resources
of the Empire for the purpose of bringing work