The Service Staffs and their Empires

The large and the very large enterprise face another serious problem: the danger that central office service staffs will become “staff empires”.

I am doubtful about the popular use of the terms “line” and “staff” to describe various kinds of activities within the business enterprise. The terms derive from the military. They may have meaning in military organizations. Applied to business they can, however only confuse.

There are two kinds of activities in any business enterprise: business producing functions such as marketing and innovation, and supply functions. Some supply functions provide physical goods such as purchasing and production; some provide ideas such as engineering; some provide information such as accounting. But none of these is staff function. None either advises another function or acts for it.

It would actually be undesirable to have any staff functions. The concept, to be “staff” means to have authority without having responsibility. And that is destructive. Managers do indeed need the help of functional specialists. But these men primarily do their own job rather than advise the manager how to do this. They have full responsibility for their work. And they should always be members of the unit to whose manager they render functional service rather than part of a special staff.

In the small or fair-sized business, staff is usually confined to one area: the managing of work and worker. Even there the confusion created by the staff concept has, done serious damage. But in the large and in the very large business the staff concept has had the more serious result of creating a number of central office service staffs: groups of professional specialists attached to headquarters who are supposed to render service and advice to operating managers in a particular area. Typically we find in the large business a central office marketing staff, central office manufacturing staff, a central office engineering staff, a central office personnel staff, a central office accounting staff and so forth.

These central office staffs seriously impede the performance of top management. Concern for each of the key area of business performance should be the specific responsibility of someone on the chief executive team. In the small business all eight key areas may well be assigned to one man, “thought man” for the company. The very large company, on the other hand, may have to have a separate full-time executive for each key area: market standing, innovation, productivity, supply of resources, profitability, management organization and personnel, employee performance and attitudes and public responsibility.

But if these men are also supposed to run a service staff, they do not have time or thought for their real job: to consider the business as a whole and to think through the impact of every business decision on the area for whose results they are primarily responsible. They are much too busy running a big administrative machine, much too concerned with the perfecting of tools and techniques, much too interested in pushing their particular “program”. General Electric has tried to counteract this; it expects of each of the service vice president that he spend only 80 percent of his time on administering his own staff and give 20 percent to being a member of the chief-executive team concerned with the company as a whole. But the proportions should be reversed to insure proper performance of the job of thinking ahead. And no other company, goes even as far as General Electric; everywhere else these men spend practically all their time on their service empires and little on their top-management job. Indeed in one large company where the manufacturing services vice president at central office does little except interviewing personally every man recommended by any one of the fifty-six plant managers for promotion to general foreman.

Comments are closed.