第5章

Thesenegotiationsandmuchofthestrategythatleadsuptoabusinessconsolidationareofthenatureofderangementsofindustry，afterthemannerspokenofabove。Sothatbusinessinterestsandmanoeuvrescommonlydelayconsolidations，combinations，correlationsoftheseveralplantsandprocesses，forsomeappreciabletimeaftersuchmeasureshavebecomepatentlyadvisableonindustrialgrounds。Inthemeantimethenegotiatorsareworkingatcross-purposesandendeavoringtoputtheirrivalsinasdisadvantageousalightasmaybe，withtheresultthatthereischronicderangement，duplication，andmisdirectedgrowthoftheindustrialequipmentwhilethestrategyisgoingforward，andexpensivemaladjustmenttoheovercomewhenthenegotiationsarebroughttoaclose。(11*) Serviceability，industrialadvisability，isnotthedecisivepoint。Thedecisivepointisbusinessexpediencyandbusinesspressure。Inthenormalcourseofbusinesstouchingthismatterofindustrialconsolidation，therefore，thecaptainofindustryworksagainst，aswellasfor，anewandmoreefficientorganization。Heinhibitsaswellasfurthersthehigherorganizationofindustry。(12*)Broadly，itmaybesaidthatindustrialconsolidationsandtheworkingarrangementsmadeforthemoreeconomicalutilizationofresourcesandmechanicalcontrivancesareallowedtogointoeffectonlyaftertheyarelongoverdue。 Incurrenteconomictheorythebusinessmanisspokenofunderthenameof“entrepreneur“or“undertaker，“andhisfunctionisheldtobethecoordinatingofindustrialprocesseswithaviewtoeconomicsofproductionandheightenedserviceability。Thesoundnessofthisviewneednotbequestioned。Ithasagreatsentimentalvalueandisusefulinmanyways。Thereisalsoamodicumoftruthinitasanaccountoffacts。Incommonwithothermen，thebusinessmanismovedbyidealsofserviceabilityandanaspirationtomakethewayoflifeeasierforhisfellows。Likeothermen，hehassomethingoftheinstinctofworkmanship。Nodoubtsuchaspirationsmovethegreatbusinessmanlessurgentlythanmanyothers，whoare，onthataccount，lesssuccessfulinbusinessaffairs。Motivesofthiskinddetractfrombusinessefficiency，andanundueyieldingtothemonthepartofbusinessmenistobedeprecatedasaninfirmity。Still，throughoutmen’sdealingwithoneanotherandwiththeinterestsofthecommunitythererunsasenseofequity，fairdealing，andworkmanlikeintegrity；andinanuncertaindegreethisbentdiscountenancesgainthatisgotatanunduecosttoothers，orwithoutrenderingsomecolorableequivalent。 Businessmenarealso，inameasure，guidedbytheambitiontoeffectacreditableimprovementintheindustrialprocesseswhichtheirbusinesstraffictouches。Thesesentimentalfactorsinbusinessexercisesomethingofaconstraint，varyinggreatlyfromonepersontoanother，butnotmeasurableinitsaggregateresults。Thecareersofmostoftheillustriousbusinessmenshowthepresenceofsomesalutaryconstraintofthiskind。Notinfrequentlyanexcessivesensitivenessofthiskindleadstoawithdrawalfrombusiness，orfromcertainformsofbusinesswhichmayappealtoavividfancyaspeculiarlydishonestorpeculiarlydetrimentaltothecommunity。(13*)Suchgroundsofaction，andperhapsothersequallygenialandequallyunbusinesslike，wouldprobablybediscoveredbyadetailedscrutinyofanylargebusinessdeal。Probablyinmanycasesthebusinessstrategist，infectedwiththishumaninfirmity，reachesanagreementwithhisrivalsandhisneighborsintheindustrialsystemwithoutexactingthelastconcessionthataruthlessbusinessstrategymightentitlehimto。Theresultis，probably，aspeedierconclusionandasmootherworkingofthelargecoalitionsthanwouldfollowfromtheunmitigatedswayofbusinessprinciples。(14*) Butthesentimentwhichinthiswayactsinconstraintofbusinesstrafficproceedsonsuchgroundsofequityandfairdealingasareaffordedbycurrentbusinessethics；itactswithintherangeofbusinessprinciples，notincontraventionofthem；itactsasaconventionalrestraintuponpecuniaryadvantage，notinabrogationofit。Thiscodeofbusinessethicsconsists，afterall，ofmitigationsofthemaxim，Caveatemptor。 Ittouchesprimarilythedealingsofmanwithman，andonlylessdirectlyandlesssearchinglyinculcatestemperanceandcircumspectionasregardstheulteriorinterestsofthecommunityatlarge。Wherethismoralneedofabalancebetweentheservicesrenderedthecommunityandthegainderivedfromagivenbusinesstransactionassertsitselfatall，thebalanceiscommonlysoughttobemaintainedinsomesortofpecuniaryterms；butpecuniarytermsaffordonlyaveryinadequatemeasureofserviceabilitytothecommunity。 Greatandmanyaretheitemsofservicetobesetdowntothebusinessman’saccountinconnectionwiththeorganizationoftheindustrialsystem，butwhenallissaid，itisstilltobekeptinmindthathisworkinthecorrelationofindustrialprocessesischieflyofapermissivekind。Hisfurtheranceofindustryisatthesecondremove，andischieflyofanegativecharacter。Inhiscapacityasbusinessmanhedoesnotgocreativelyintotheworkofperfectingmechanicalprocessesandturningthemeansathandtoneworlargeruses。Thatistheworkofthemenwhohaveinhandthedevisingandoversightofmechanicalprocesses。Themeninindustrymustfirstcreatethemechanicalpossibilityofsuchnewandmoreefficientmethodsandcorrelations，beforethebusinessmanseesthechance，makesthenecessarybusinessarrangements，andgivesgeneraldirectionsthatthecontemplatedindustrialadvanceshallgointoeffect。Theperiodbetweenthetimeofearliestpracticabilityandtheeffectualcompletionofagivenconsolidationinindustrymarkstheintervalbywhichthebusinessmanretardstheadvanceofindustry。Againstthisaretobeoffsetthecases，comparativelyslightandinfrequent，wherethebusinessmenincontrolpushtheadvanceofindustryintonewfieldsandpromptthemenconcernedwiththemechanicsofthecasetoexperimentandexplorationinnewfieldsofmechanicalprocess。 Whentherecitalismade，therefore，ofhowthelargeconsolidationstakeplaceattheinitiativeofthebusinessmenwhoareincontrol，itshouldbeaddedthatthefactoftheirbeingincontrolprecludesindustrialcorrelationsfromtakingplaceexceptbytheiradviceandconsent。Theindustrialsystemisorganizedonbusinessprinciplesandforpecuniaryends。Thebusinessmanisatthecentre；heholdsthediscretionandheexercisesitfreely，andhischoicefallsoutnowOnoneside，nowontheother。Theretardationaswellastheadvanceistobesetdowntohisaccount。 Asregardstheeconomiesincostofproductioneffectedbytheseconsolidations，thereisafurthercharacteristicfeaturetobenoted，afeatureofsomesignificanceforanytheoryofmodernbusiness。Ingreatmeasurethesavingeffectedisasavingofthecostsofbusinessmanagementandofthecompetitivecostsofmarketingproductsandservices，ratherthanasavingintheprimecostsofproduction。Theheightenedfacilityandefficiencyofthenewandlargerbusinesscombinationsprimarilyaffecttheexpensesofofficeworkandsales，anditisingreatpartonlyindirectlythatthiscurtailmentandconsolidationofbusinessmanagementhasaneffectuponthemethodsandaimsofindustryproper。Ittouchesthepecuniaryprocessesimmediately，andthemechanicalprocessesindirectlyandinanuncertaindegree。Itisofthenatureofapartialneutralizationofthewastesduetothepresenceofpecuniarymotivesandbusinessmanagement，-forthebusinessmanagementinvolveswastewhereveragreaternumberofmenortransactionsareinvolvedthanarenecessarytotheeffectivedirectionofthemechanicalprocessesemployed。Theamountof“business“thathastobetransactedperunitofproductismuchgreaterwherethevariousrelatedindustrialprocessesaremanagedinseveraltythanwhereseveralofthemarebroughtunderonebusinessmanagement。Apecuniarydiscretionhastobeexercisedateverypointofcontactortransition，wheretheprocessoritsproducttouchesorpassestheboundarybetweendifferentspheresofownership。Businesstransactionshavetodowithownershipandchangesofownership。Thegreatertheparcelmentinpointofownership，thegreatertheamountofbusinessworkthathastobedoneinconnectionwithagivenoutputofgoodsorservices，andtheslower，lessfacile，andlessaccurateonthewhole，isthework。Thisappliesbothtotheworkofbargainandcontract，whereinpecuniaryinitiativeanddiscretionarechieflyexercised，andtotheroutineworkofaccounting，andofgatheringandapplyinginformationandmisinformation。 Thestandardizationofindustrialprocesses，products，services，andconsumers，spokenofinanearlierchapter，verymateriallyfacilitatesthebusinessman’sworkinreorganizingbusinessenterprisesonalargerscale；particularlydoesthisstandardizationservehisendsbypermittingauniformroutineinaccounting，invoices，contracts，etc。，andsoadmittingalargecentralaccountingsystem，withhomogeneousramifications，suchaswillgiveacompetentconspectusofthepecuniarysituationoftheenterpriseatanygiventime。 Thegreat，atthepresentstageofdevelopmentperhapsthegreatest，opportunityforsavingbyconsolidation，inthecommonrunofcases，isaffordedbytheubiquitousandinasenseexcessivepresenceofbusinessenterpriseintheeconomicsystem。 Itisindoingawaywithunnecessarybusinesstransactionsandindustriallyfutilemanoeuvringonthepartofindependentfirmsthatthepromoterofcombinationsfindshismosttellingopportunity。Sothatitisscarcelyanover-statementtosaythatprobablythelargest，assuredlythesecurestandmostunquestionable，servicerenderedbythegreatmoderncaptainsofindustryisthiscurtailmentofthebusinesstobedone，thissweepingretirementofbusinessmenasaclassfromtheserviceandthedefinitivecancelmentofopportunitiesforprivateenterprise。 Solongasrelatedindustrialunitsareunderdifferentbusinessmanagements，theyare，bythenatureofthecase，atcross-purposes，andbusinessconsolidationremediesthisuntowardfeatureoftheindustrialsystembyeliminatingthepeCuniaryelementfromtheintersticesofthesystemasfarasmaybe。Theinterstitialadjustmentsoftheindustrialsystematlargeareinthiswaywithdrawnfromthediscretionofrivalbusinessmen，andtheworkofpecuniarymanagementpreviouslyinvolvedisinlargepartdispensedwith，withtheresultthatthereisasavingofworkandanavoidanceofthatsystematicmutualhindrancethatcharacterizesthecompetitivemanagementofindustry。Tothecommunityatlargetheworkofpecuniarymanagement，itappears，islessserviceablethemorethereisofit。Theheroicroleofthecaptainofindustryisthatofadelivererfromanexcessofbusinessmanagement。Itisacastingoutofbusinessmenbythechiefofbusinessmen。(15*) Thetheoryofbusinessenterprisesketchedaboveappliestosuchbusinessasisoccupiedwiththeinterstitialadjustmentsofthesystemofindustries。Thisworkofkeepingandofdisturbingtheinterstitialadjustmentsdoesnotlookimmediatelytotheoutputofgoodsasitssourceofgain，buttothealterationsofvaluesinvolvedindisturbancesofthebalance，andtotheachievementofamorefavorablebusinesssituationforsomeoftheenterprisesengaged。Thisworkliesinthemiddle，betweencommercialenterpriseproper，ontheonehand，andindustrialenterpriseinthestrictersense，ontheotherhand。Itisdirectedtotheacquisitionofgainthroughtakingadvantageofthoseconjuncturesofbusinessthatariseoutoftheconcatenationofprocessesintheindustrialsystem。 Inasimilarmannercommercialbusinessmaybesaidtobeoccupiedwithconjuncturesthatariseoutofthecircumstancesoftheindustrialsystematlarge，butnotoriginatinginthemechanicalexigenciesoftheindustrialprocesses。Theconjuncturesofcommercialbusinessproperareinthemainfortuitous，insofarthattheyarecommonlynotinitiatedbythebusinessmenengagedinthesecommercialpursuits。Commercialbusiness，simplyassuch，doesnotaimtoguidethecourseofindustry。 Ontheotherhand，thelargebusinessenterprisespokenofaboveinitiateschangesinindustrialorganizationandseeksitsgaininlargepartthroughsuchalterationsofvaluelevelsastakeplaceonitsowninitiative。Thesealterationsofthevaluelevels，ofcourse，havetheireffectupontheoutputofgoodsanduponthematerialwelfareofthecommunity；buttheeffectwhichtheyhaveinthiswayisonlyincidentaltothequestofprofits。