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Business Management and Organization

Management, in brief, is the conducting of the business enterprise; it consists, on the one hand, of organizing, or planning; and, on the other hand, of administration that is, of putting the plans into effect. Organization and administration, accordingly, are seen to be phases of management, corresponding very closely to planning and performance.

From the very inception of a business enterprise management comes into play. In its earlier stages, however, it is usually called “promotion” or “organization,” management being regarded as the directing of an established business. In the directing of an established business, obviously, organization goes on continuously and is a part of management. There is no essential difference between the first assemblage and correlation of the parts of a business, commonly called organization, and the subsequent re-correlations in the adding of new departments, new men, new machines and new markets, commonly looked upon as coming within the province of management.

The problem of management of the business enterprise is that of the gathering together of whatever profit yielding elements can be found, and of combining these elements and directing them in such a manner as to secure for the business as an entity the greatest amount of profit. These profit yielding elements, in general terms, are goods supplied by the capitalist, labor by the employee, purchasing power exercised by the public, and managerial ability supplied by the manager or administrator. These are the four elements out of which a business enterprise is formed.

Goods without the application of labor are of no value ; labor without goods upon which to expend itself is of no value; the product of goods and labor without a market is of no value; and the market without the product cannot exist. Goods, labor and market cannot come together of their own accord they must be brought into relation each with the other. The person who brings these several elements together is a “promoter”; if he continues their correlation and co-ordination, he is known as an “enterpriser”; the exercise of the enterpriser’s function, immediate or delegated, is defined herein as management.

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