The Visible Hand
The Visible Hand

Examines the processes of production and distribution in the U.S. and the ways in which their management has become increasingly systematized

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excerpt In many sectors of the economy the visible hand of management replaced what Adam Smith referred to as the invisible hand of market forces. 1 on 6/3/2019, 10:49:33 PM

excerpt The visible hand of management replaced the invisible hand of market forces where and when new technology and expanded markets permitted a historically unprecedented high volume and speed of materials through the process of production and distribution. 12 on 9/16/2019, 6:19:08 PM

excerpt For top and middle managers, control through statistics quickly became both a science and and an art. 109 on 9/16/2019, 6:27:22 PM

note Railroads pioneered modern accounting practices because they were much larger and more capital-intensive than other businesses at the time. on 9/16/2019, 6:31:57 PM

references Jobber (merchandising) on 9/16/2019, 6:52:09 PM

excerpt These enterprises were similar in that they used new continuous-process machinery to produce low-priced packaged consumer goods. Their new processes of production were so capital-intensive (that is, the ratio of workers to the quantity of units produced was so small) that production for the national and global market became concentrated in just a few plants, often only one or two. 297 on 9/16/2019, 7:02:11 PM

excerpt In the 1890s, the primary route to size was becoming one of combination and consolidation. 314 on 9/16/2019, 7:07:52 PM

excerpt Competition between these enterprises was, therefore, ultimately be- tween their managers and organizations. The success of a firm depended primarily on the caliber of its managerial hierarchy. Such quality in turn reflected the ability of the top executives to select and evaluate their middle managers, to coordinate their work, and to plan and allocate resources for their enterprises as a whole. It was precisely here that the administration of these early large integrated enterprises was weak. Coordination of the flow of materials through the enterprise was not tied to a carefully calculated estimate of demand. It was achieved largely by personal cooperation between the heads of functional departments and their staffs. Evaluation and review of departmental performance was rarely systematic. The growth of the enterprise was only occasionally planned with an eye to long-term changes in supply, demand, and technological innovation. Growth came rather as a response to short-term needs and opportunities as perceived by different sets of middle managers. 413 on 9/16/2019, 7:17:07 PM

excerpt The owner-managers prided themselves on their knowledge of a business they had done so much to build. They continued to be absorbed in the details of day-to-day opera- tion. They personally reviewed the departmental reports and the statistical data. They had little or no staff to collect information and to provide expert advice. They promoted, hired, and fired their subordinates as often on personal whim as objective analysis. 414 on 9/16/2019, 7:18:37 PM

excerpt In carrying out the reorganization after the merger, these top managers began to define their specific tasks. The centralizing of administration caused them to institute uniform accounting and statistical controls. In hiring and allocating managerial personnel they began to think more systematically about evaluating managerial performance. And because the reorganization of production and the building of a sales and buying net- work created numerous and often conflicting claims for capital expendi- tures, these senior executives were increasingly forced to pay close attention to the systematic long-term allocation of capital and personnel. 416 on 9/16/2019, 7:22:02 PM

excerpt These "divisional indices," as they were called, included not only pur- chases and delivery schedules for materials and capital equipment re- quired and labor to be hired, but also estimated rates of return on invest- ment and prices to be charged for each product. Prices, unit costs, and rates of return were all closely related to the volume permitted by de- mand. In drawing up these divisional indices, the staff computed the size of the national income, the state of the business cycle, normal seasonal variations in demand, and the division's anticipated share of the total mar- ket for each of its lines. 461 on 9/16/2019, 7:33:01 PM

Frenemies cites The Visible Hand on 6/10/2019, 6:30:38 PM