Responsibility of Management toward Enterprise

The first responsibility which management owes to the enterprise in respect to public opinion, policy and law is to consider such demands made by society on the enterprise (or likely to be made within the near future) as may affect attainment of its business objectives. It is management job to find a way to convert these demands from threats to, or restrictions on, the enterpriser’s freedom of action into opportunities for sound growth, or at least to satisfy them with the least damage to the enterprise.

Even the staunchest friend of management would not claim that the job done so far could not be improved upon.

One illustration should suffice. It should have been clear ten years ago that the changing age structure of the American population, coupled with the steady drop in the purchasing power of the dollar, would produce an irresistible demand on business to do something for old employees. Some managements faced the problem years ago: we have good pension plans gong back to 1900. But many more refused to see the inevitable. As a result they were forced to accept demands of employees pensions which tend to impose the greatest rather than the least burden on the enterprise though they do not actually meet the issue. For it is becoming increasingly obvious that pensions will not solve the problem of the old employees if one fifth of the work force is of pensionable age, as it so will be in our society, compulsory pensioning of the older people puts a all but unbearable burden on the production of the younger men. At same time the great bulk of the people who reach what used to be considered old age are both able physically continue work and eager to do so. What management should have done was to wok out plans for keeping employed those older people who want to work and are able to do so, with pensions as something to fall back on for those who are unable or unwilling to keep on working. At the same time these plans would have take sure that the older employees who are retained do not bottle up the promotional opportunities of younger men or endanger their employment security. Having failed think through the problem management will almost certainly find themselves faced with compulsory employment programs for older people imposed by unions or by government which will mean additional cost and new restrictions. American managements are on the verge of making the same mistake in respect to the stability of income and employment. That this demand will have to be met can hardly be disputed any more. It expresses not only the need of the worker for income security, but the need of our society to symbolize the worker’s middle class status. Also the demand has behind it the force of the deep depression psychosis that we inherited from the thirties.

This demand could be satisfied in such a way so as to improve and strengthen the enterprise, increase its productivity and increase over all profits. If managements however, refuse to face the responsibility to make the inevitable productive of right enterprise, they will only saddle their businesses with the guarded annual wage both the most expensive and the least effective way to take care of the real social need.

Management is also responsible for making sure that the present actions and decisions of the business enterprise will not create future public opinion, demands and policies that threaten the enterprises, its freedom and its economic success.

During the last years many companies have dispersed their plants geographically. In doing so, many of them have simply built in a new location a replica of the original plant turning out the same products for the same market. In many cases both, the old and the duplicate plants are the main source of employment in their respective communities. Examples are a rubber company with its plants in Akron and new plant in a small southern town; a ball bearing company with an old plant in a small New England town and a new plant in a small town in Ohio; a shirt maker with old plants in upstate New York and a new plant in rural Tennesee.