Thus there are many ways in which those who undertake the chief risks of buying and selling may avoid the trouble of housing and superintending those who work for them.They all have their advantages; and when the workers are men of strong character, as at Sheffield, the results are on the whole not unsatisfactory.But unfortunately it is often the weakest class of workers, those with the least resource and the least self-control who drift into work of this kind.The elasticity of the system which recommends it to the undertaker, is really the means of enabling him to exercise, if he chooses, an undesirable pressure on those who do his work.
For while the success of a factory depends in a great measure on its having a set of operatives who adhere steadily to it, the capitalist who gives out work to be done at home has an interest in retaining a great many persons on his books; he is tempted to give each of them a little employment occasionally and play them off one against another; and this he can easily do because they do not know one another, and cannot arrange concerted action.
5.When the profits of business are under discussion they are generally connected in people's minds with the employer of labour: "the employer" is often taken as a term practically coextensive with the receiver of business profits.But the instances which we have just considered are sufficient to illustrate the truth that the superintendence of labour is but one side, and often not the most important side of business work;and that the employer who undertakes the whole risks of his business really performs two entirely distinct services on behalf of the community, and requires a twofold ability.
To return to a class of considerations already noticed (IV, XI, sections 4 and 5), the manufacturer who makes goods not to meet special orders but for the general market, must, in his first role as merchant and organizer of production, have a thorough knowledge of things in his own trade.He must have the power of forecasting the broad movements of production and consumption, of seeing where there is an opportunity for supplying a new commodity that will meet a real want or improving the plan of producing an old commodity.He must be able to judge cautiously and undertake risks boldly; and he must of course understand the materials and machinery used in his trade.
But secondly in this role of employer he must be a natural leader of men.He must have a power of first choosing his assistants rightly and then trusting them fully; of interesting them in the business and of getting them to trust him, so as to bring out whatever enterprise and power of origination there is in them; while he himself exercises a general control over everything, and preserves order and unity in the main plan of the business.
The abilities required to make an ideal employer are so great and so numerous that very few persons can exhibit them all in a very high degree.Their relative importance however varies with the nature of the industry and the size of the business; and while one employer excels in one set of qualities, another excels in another; scarcely any two owe their success to exactly the same combination of advantages.Some men make their way by the use of none but noble qualities, while others owe their prosperity to qualities in which there is very little that is really admirable except sagacity and strength of purpose.
Such then being the general nature of the work of business management, we have next to inquire what opportunities different classes of people have of developing business ability; and, when they have obtained that, what opportunities they have of getting command over the capital required to give it scope.We may thus come a little closer to the problem stated at the beginning of the chapter, and examine the course of development of a business firm during several consecutive generations.And this inquiry may conveniently be combined with some examination of the different forms of business management.Hitherto we have considered almost exclusively that form in which the whole responsibility and control rests in the hands of a single individual.But this form is yielding ground to others in which the supreme authority is distributed among several partners or even a great number of shareholders.Private firms and joint-stock companies, co-operative societies and public corporations are taking a constantly increasing share in the management of business; and one chief reason of this is that they offer an attractive field to people who have good business abilities, but have not inherited any great business opportunities.
6.It is obvious that the son of a man already established in business starts with very great advantages over others.He has from his youth up special facilities for obtaining the knowledge and developing the faculties that are required in the management of his father's business: he learns quietly and almost unconsciously about men and manners in his father's trade and in those from which that trade buys and to which it sells; he gets to know the relative importance and the real significance of the various problems and anxieties which occupy his father's mind:
