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transactions and results of the management. He is constituted a staff agent of the membership, the primary purpose being to establish the fact of honesty and to give the manager the means of having efficiency and economy brought to the attention of members by someone who has no official functions to perform, other than to supply the evidence of dishonesty, inefficiency and waste, if any is found.

The Right of Interpellation and Personal Inquiry

Another effective means for developing information about performances and proposals of the "executive" is to require him personally to appear before the board at its meetings and answer questions. This has the effect of keeping the executive in a condition of preparedness. Knowing that this is a condition to sustain, great care must be taken at all times to have every proposal fully considered and supported by statements of fact and reasons that are convincing to the beneficiaries of the undertaking as well as to their representatives on the board.

Access of "Representatives" and "Members" to Records

As a matter of common law resting on common experience, provision is made for access to records by beneficiaries, under prescribed rules and by the regular representatives at all times. Their right of access, together with their right of personal inquiry, criticism and opposition, has been utilized and made effective through the appointment of regular and special committees of the board, whose duty it is to go into designated subjects and to report on conditions and results. They constitute specialized advisory committees who in turn may employ such independent staff agents to assist them as may be desired.

Provisions for Publicity and Discussion

The auditor, the right exercised by "representatives" of interpellating and making inquiry of the "executive" at board meetings, the right of inquiry by committees of shareholders, and the standing and special committees of the board, these are expedients for developing information but not necessarily for publicity. The holding of meetings at which all members are privileged to attend, requirements that minutes of meetings shall be kept and made available to members, regulations calling for the publication of reports by the executive branch, the publication of reports by the auditor certifying to conditions and results, are among the prescriptions that are commonly employed to carry executive responsibility home to those who may exercise powers of control.

Positive Provision for Making Management Effective


From the viewpoint of the manager, however, provisions for a representative" body, for an "auditor," for "committees," for "pub

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licity are negative in their operation. Positive provision is made for the development of leadership and for building up an efficient service by giving to the executive the authority to employ an organization which is adapted to the expert handling of the business both in planning and in the execution of plans.

Adoption of Means of Obtaining and Retaining a Faithful and Efficient Personnel

One of the essentials of institutional success is a loyal personnel; another essential is the development and retention of a personnel able to perform efficiently the tasks assigned. The personal equation in a private corporation as well as a government is one that too often has been lost sight of and the various devices for seeking out persons qualified and for building up the esprit de corps are matters of increasing concern to managers as well as of increasing interest to those who are keeping in elbow touch with institutional methods. In enterprises of large proportions whose activities are varied and widely scattered the employment office, and what has come to be known as the "welfare " department, are the arms of the service whose business it is to deal with the human side of the personal equation, while the officials in charge of work departments are charged with responsibility for the utilization of individuals for getting group results. What the purchasing agent and the storekeeper and custodian are to the material side of the enterprise the employment office and "welfare" department are to the personnel. Their function is a staff performance, the purpose of which is to inquire carefully into the qualifications and fitness of persons seeking employment, to keep in touch with the working conditions affecting health and comfort, to look after training the employees, to lay down and supervise a system of promotions and demotions, to administer rules governing veterans and pensioners, and other matters that make the employment attractive to new recruits and provide a vocation for men such as will enable the corporation to retain the experience and expertness developed by it in handling its problems. With those ends in view, the executive is given the power of appointment, removal and discipline and he is also given advisory facilities for making his action intelligent and just in every matter pertaining to the employment and welfare of subordinates.

Administrative Staff Agencies

As a means of enabling the chief executive and the heads of departments to become more effective in directing the details of business, specialized staff agencies for inspection, for legal advice, for the preparation and consideration of budget proposals, for verifying the accuracy

of reports both of custodians and of work results have also been developed. Staff agents are detached from all administrative responsibility and left free to make independent investigations into all problems that arise as to old work or new work. The line agents are responsible, active heads of departments. Adequate "staff" and "line" agencies for the exercise or control over fidelity, economy and efficiency by the executive have been found to be essential to management of large corporate business. Having required the executive to take the initiative in the preparation and submission of plans and proposals, the experience of all of these agencies may be brought into service, not only for the upbuilding of the management, but for the information of the board and ultimately of the membership. The executive being put in such position that he must defend both results obtained and new projects submitted for approval, being required to meet and satisfactorily answer adverse criticism, or if criticism may develop weakness in the original proposal being made, to assume responsibility for any amendments, no such condition can obtain as irresponsibility in the management of affairs. Either the executive must be supported by "representatives," or, in the last appeal, by "members," or he must retire.

Use of " Line" and "Staff" Advisers

In a large institution, one which is so varied and complex in its activities as to require subdivision into departments, provision is made for developing efficiency in management through "staff" and "line" advisers, as explained above. In other words, the executive as a means of protecting his responsibility, may require that the project or plan of a department head, before it comes to him for his approval, shall have the consideration of all related heads of work-officers who may be constituted a cabinet or executive board; and he may also require review and report by persons called a "staff" who have been detached from administrative responsibility for the purpose-persons who are qualified to consider the particular problems or the questions vital to the proposal. Having done this, when the executive comes to a decision or goes before his board with a new work, project or a plan of financing, for the purpose of obtaining their approval as a basis for executive action, he will not only understand what the proposal is, but he will know that it has had the best thought that the most competent persons of the entire organization can give. Further than this he will know that every question of difference in interest or opinion, which may develop between heads of the "line" or between the "line" and the "staff" has been resolved in the discussion which takes place before he is required to assume responsibility for presenting a proposal to the board for authority to act; or if this be not required, before he issues an executive.

order for which he will be later held to account. In this consideration by the line and staff advisers, and in discussions of differences before the executive, every detail of a proposal must of necessity be supported by such statements of fact as will enable the executive later to answer every question or criticism that may be raised by the board or an inquiring member-if need be by a court.

Prompt Retirement of Officers who Do Not Represent a Majority

Provision for promptness in retiring an administration which fails to retain the support of a majority not only insures responsiveness, but is the means for enforcing official responsibility. In case the chief executive is elected by shareholders, then when an irreconcilable difference of opinion on matters of policy or administration develops between the board and the executive, the issue becomes clearly defined through inquiries and discussions that take place between the "executive" and representatives" at board meetings and it is determined by ballot whether a majority of representatives is for or against each proposal. And the statements of fact and the arguments which are used in support of one contention or the other, become the property of the membership. When, therefore, these issues go before members at an election to ascertain which faction or party will be returned, both the executive and the board are brought into harmony and made representative. In case the 'executive" is appointed by the board, any irreconcilable difference between the executive and a majority of the board must lead to the resignation of the "executive."


Absence of "Irresponsible Boss" in the Administration of Private Business

In any case the only faction or party which can develop and command any considerable attention or following in a private corporate controversy over official acts or matters of policy, is a party in support of the executive or a party which is against him. When these expedients adopted to make the management of private business responsible are fully operative, there is no such thing as an "irresponsible boss." As a matter of organization, leadership is placed with a responsible executive and leadership in the opposition when it is supported by a majority must itself become responsible by accepting executive responsibility. If the opposition leader himself refuses to become the executive, when supported by a majority he either must resign his leadership to the executive, or the administration itself becomes irresponsible.

Conditions Under Which Private Management Becomes Irresponsible

The conditions under which private corporate management becomes irresponsible are conditions in which well-known expedients for making

management responsible have not been adopted, or if adopted have become inoperative. Whenever the "executive" is required to assume responsibility for leadership, for the honesty and qualifications of the personnel, and for the efficiency and economy of management, as measured by results, and whenever as a means of enforcing this responsibility provision is made for independent audit, for the executive coming before the board to be personally interrogated, for independent and effective inquiry by membership and board committees, for requiring representatives on the board either to support or oppose the executive measures, without impairing executive responsibility for what is finally adopted, and for adequate publicity and discussion, the management cannot be other than responsive and responsible to the majority, as determined by regulations giving voting power. The question as to who shall be empowered by charter. agreement or otherwise qualified to express the will of the majority is a matter that is to be independently considered.



As has been said by a noted writer on constitutional law, "The business of government, like all other business, falls into two great divisions the determination of policy and principle, and the working out of details; the settlement of what is to be done and the doing of it."

Similar to Those Employed in Private Undertakings

The expedients adapted to making control over public business effective are just as well known as are those for making control effective in private affairs. What is worthy of note is this that those governments which have been most responsive to the people, and whose “administration" has been held to most strict account, have been those in which the best experience of private business has been most closely followed. Those governments that have been most responsive have been those whose constitutions have provided for making the legislature a body that is representative of constituencies, and which have provided for prompt reference of all irreconcilable differences between executive and representative body on matters of policy to the "electorate." Those governments have been most responsible, whose constitutions have provided for "executive" leadership by holding a single executive to account, both for new requests and administrative results, and by establishing a relation between executive and representative body, which requires the "responsible" head of the administration to keep behind him a majority, the penalty for loss of confidence being prompt retirement from the service. Those governments have been most honest, which have provided for the protection of the personnel of the service

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