The Sloan Report: American Culture and Business Management

Abstract

Students of American culture are generally agreed on the preference shown for pragmatic experimental action without much advance theorizing. The evolution of modern business management is a good example of the working of this trait, with the ironic twist that the systems established by practical executives then became the basis for business school theorizing. As a result, by 1950 the pragmatic United States was the leading source of literature and expertise on problems of management. Perhaps this process is the way by which much practical knowledge gains acceptance, and, therefore, it is interesting to see how the measures adopted to meet difficult day to day problems in human relations led to the subsequent development of general principles. Clear lines of authority, the use of specialized advice, and delegation of authority had always been recognized as basic principles of good bureaucratic management. The American contribution was to show by practical example how these aims might be achieved in highly complex business structures. In the late nineteenth century industrial companies in many nations grew from medium-sized enterprises, employing one or two hundred workers at a single location, into large corporations with thousands of men working in numerous branches and perhaps a head office remote from any of the operations. This was particularly the case in the United States where the geographical spread of the continental market raised the costs of distribution and gave an advantage to supply from more than one location. With just a few exceptions, technological advantages could generally be maximized in a moderate sized plant, in which problems connected with both labor and management were on a rather simple and