%^ li.' ■'•':^ Lr*..v. j •■ V. '^ --.. 'ly ', 'r»r i,«)4.. / , '/. ^^r ^V'-^.-r- . ^»'A" 'Si^'^v^- "'■'^^i Cornell University Library HF 5500.J67 Organized business knowledge. 3 1924 013 947 159 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013947159 ^•It^ JOSEPH F BENCH JOHNSON, Dean of New York University School of Com- merce, Accounts and Finance, and Chairman of the Advisory Council of the Alexander Hamilton Institute, was graduated from Har- vard University in 1878. After graduate study in political science and economics in Germany, he began newspaper work in 1881 on the Springfield Republican, and later became finan- cial editor of the Chicago Tribune, In 1890 he established the Spokane {Wash.) Spokesman, of which he was editor until 1893, when he became Professor in the Wharton School of Finance and Commerce at the University of Pennsylvania. He held this position until 1901, when he was appointed Professor of Political Economy at New York University. He has been Dean of the School of Commerce, Ac- counts and Finance of this institution since 1903. In 1909 Dr. Johnson was appointed by thv Monetary Commission of Congress to investigate the Canadian Banking System in connection with the proposed currency revision. He is the author of "Money and Currency," "Syllabus of Money and Banking," and "Cana- dian Banking." Since 1909 Dr. Johnson has been editor-in-chief of the Modern Business series of teats, as well as Chairman of the Advisory Council of the Alexander Hamilton Institute. Copyrieht. 1914 ALEXANDER HAMILTON INSTITUTE NEW YORK CITY ORGANIZED BUSINESS KNOWLEDGE By Joseph French Johnson I AM asked to state why I believe in organized business knowledge and in systematic methods of acquiring that knowledge, and why I am connected, as Editor of the Modern Business Text and Chairman of the Advisory Council, with the Alexander Hamilton Institute. As the statement is intended for busy men, I will try to make it as brief and direct as possible. For 44-CaIibre Men First, let me make clear that I do not advocate advanced systematic reading and study of business principles for everybody. Some men are born 22- calibre, or less, and some are born 44-calibre, or more. A 22-calibre man may become a first-class clerk or mechanic, but never a business executive; and a study of executive problems would do him little good. 4 ORGANIZED BUSINESS KNOWLEDGE The 44-calibre man, even without wide and organized knowledge, is a force; with such knowledge at his disposal he becomes a well-directed and almost irresistible power. For Experienced Men Neither do I advocate a study of abstract prin- ciples that bear no relation to practical experience. I have lived long enough to appreciate as highly as any one the value of experience and the useless- ness of pure abstractions. The only principles on which I would stake a penny's worth of time or money are those that are based directly on expe- rience — ^not necessarily on my own experience, however, but on the experience of others as well. Such principles are in reality simply condensed experience. Furthermore, no one can thoroughly comprehend principles until he sees clearly their applications. The more experience and intelligence a man has, the better able he is to apply and thus to master principles. Hence, mature business and profes- sional men actively engaged in executive duties are best equipped of all to acquire quickly and to use effectively organized business knowledge. ORGANIZED BUSINESS KNOWLEDGE 5 The Call for Brains and Knowledge Business has long since ceased to be largely a series of price-hagglings, a continual measurement of greed and sharp wits against sharp wits and greed. The real business men of this age are crea- tors, not cheats; they are seeking permanent cus- tomers, not victims. A permanent business, whether big or little, must be productive and must be beneficial to every one concerned, buyer, seller, employer, employee. The executive who runs such a business, or any part of it, must give his energies to organizing the forces of nature, of labor and of civilization that are at his command; to judging, marshaling, directing, and influencing men; to long-distance planning; to meeting unexpected difiiculties and unlooked-for opportunities with correct, decisive thought and word. These functions call for brains, not crude, but trained; they call for thought, not helter-skelter, but concentrated and effective; they call for knowledge, not aimlessly picked up, but organized. Business Is Constructive Perhaps I can best sum up what I have in mind in these propositions : 6 ORGANIZED BUSINESS KNOWLEDGE 1. Business to-day is constructive. 2. Constructive business must be directed by con- structive thought. 3. Constructive thought must be based on broad and soimd knowledge. If any one objects that he knows plenty of per- sons who are engaged in business, but who are not doing and never will do constructive work, I answer that what he says is true, but that these people are not business men. Those persons in business who do no constructive thinking are merely the tools of business men. System Applied to Thought Broad and sound knowledge that is organized into propositions or "laws" may properly be called "scientific." Science is defined by Herbert Spencer as "common sense classified." In other words, science is system applied to thought. The results are analogous to those produced by applying sys- tem to office management; routine matters are handled smoothly and bigger difficulties are more readily overcome. ORGANIZED BUSINESS KNOWLEDGE 7 Systematic thought, or science, has done won- ders, as every one knows, in the technical field. Eventually it is certain to do wonders in the field of business. A true "science of business" is only in process of development; yet much has already been accomplished. In place of a confused chaos of notions as to the best methods of starting, man- aging and financing business, of keeping accounts, of buying and selling, we now have definite, well- established principles. This is what we mean by organized business knowledge. The man who makes such knowledge his own has secured for himself, in classified, workable form, the results of the experiments, the ideas, the suc- cesses and the failures of the business men who have preceded him. Organized business knowledge is, in fact, a systematic summary of the lessons that experience has taught to thousands of able men. An Asset of Extraordinary Value Wholly apart from the personal satisfaction that it gives, this organized business knowledge has value simply as a business asset. It has, in fact, an 8 ORGANIZED BUSINESS KNOWLEDGE extraordinary value due to its striking advantages over other assets, as follows: 1. It is certain to last until its proprietor has no further use for it. 2. It involves practically no construction ex- pense. Whatever small initial outlay of money and time is called for will normally come back promptly in the form of time-sav- ing methods and business-bmlding ideas. 3. It involves no maintenance or betterment ex- pense. On the contrary, classified knowledge acts hke a powerful magnet; it attracts and holds related facts, suggestions, principles, and thus grows without effort or outlay. 4. It yields a large, permanent income. Its owner, though not absolutely insured against mistake and failure, is at least warned against repeating mistakes that have previously been made. He saves time in his own thinking. He has the experience of other men to assist him in everything that he does. 5. Its possibilities are limitless. Wide and sound knowledge of business enables a man to see, seize and use his opportunities. It reveals to ORGANIZED BUSINESS KNOWLEDGE 9 him principles of development. It gives him a sure basis for constructive thought and work. Some of my readers may think it fanciful to call knowledge a "business asset" ; but why is it not an asset? Organized business knowledge is no more intangible than good-will; it is as im- perishable as land; it is more certain to produce profits than plants and machinery Universities as Organizers of Business Knowledge In order that there should be organized business knowledge for the use of active business men, it is necessary that certain men should devote themselves to acquiring and classifying this knowledge — ^in other words, to the scientific study of business. The bulk of this study must be carried on by men who are especially fitted for the task and who are free to give to it their unfettered energies. Such men find their natural environment and congenial duties in the great xmiversities. Universities for genera- tions have been the homes of scientific study; in- deed, their chief purpose is to foster such study. It is a misfortune — now too late to remedy— that 10 ORGANIZED BUSINESS KNOWLEDGE university men, as a class, did not until recently regard business activities as worthy of serious study. I am pleased to report to the world of busi- ness, however, that this attitude has given way to an appreciation of the importance of business problems and to a keen desire to assist in the solu- tion of those problems. With this end in view, trained university specialists in this country and abroad have been engaged for years in collecting and classifying information as to accounting, ad- vertising, financial, and other business activities, in working out principles and in watching the application of those principles. Some of the greatest universities, including Harvard, North- western, New York, the Universities of Pennsyl- vania, of Chicago, of Illinois, of Wisconsin, of Minnesota, of Birmingham (England) , of London (England), and a number of others, now maintain separate schools or departments wholly devoted to organizing and imparting business knowledge. Value of Systematic Training These university departments have succeeded so well because they oflFer a broad training for execu- tive business positions. Let a young man learn all that he possibly can about the details of one depart- ORGANIZED BUSINESS KNOWLEDGE 11 ment of a concern, and he is still not fitted to be executive head of that department; let a depart- ment head know all about his own department and much about other departments, and he may still not be fitted for broader management. It takes a knowledge of wide relationships, a grasp of intri- cate problems, an understanding of basic principles, to conduct a business ; and those things do not come from handling in routine fashion the details of an ofiice. Executive success results from a com- bination of ability, energy and, what is equally important, broad practical knowledge. An Argument to the Contrary To be sure, many successful business executives have come up from office boy to the top without having formally studied business principles; but that proves nothing. Of course, they studied no such principles, because, until recent years, there were none to be studied. Their competitors had no well-established principles to guide them either, and so they all worked on the same level. The eagerness with which such men have welcomed and supported the world-wide movement to provide 12 ORGANIZED BUSINESS KNOWLEDGE organized business knowledge shows that they would not have dreamed of refusing such knowl- edge if they could have secured it. Building from the Base Systematic reading and study, combined with practice in any field, constitute the shortest path to the top, for they lead to a broad, sound, organized body of knowledge. Let me emphasize the state- ment that this body of knowledge is broad. In business^ as in other fieldsj successful specialists understand more than the mere technique of their specialties; they see causes and relations. The accountant, who can do nothing but juggle figures, is a poor specimen of a professional man; the manufacturer, who knows nothing of ac- counting, wiU never manage successfully a large business. Organized business knowledge, to be efficient, must be at least broad enough to include a careful study of the principles of economics, of finance, of accounting, of real estate, and of com- mercial law. Any good business man, no matter how confined his specialty, should certainly be ORGANIZED BUSINESS KNOWLEDGE 13 informed as to all these subjects. This is the age of specialists, it is true, but not the age of petty, nar- row specialists. A Sound Plan I have stated briefly the reasons why I believe in organization of business knowledge and in system- atic methods of acquiring that knowledge. Now let me sum up the reasons why I believe in and recommend the Modern Business Course and Serv- ice offered by the Alexander Hamilton Institute. First, my experience has convinced me that the most valuable knowledge is that which a man secures through his own reading, observation and thought. This is by no means inconsistent with a belief in the value of university or any other formal education, for the object of such education is not to inject knowledge, but simply to guide thought and reading along the shortest road to knowledge. Guidance can generally best be given to young people when there is personal contact between instructor and student. Mature and capable men, however, do not especially need whatever stimulus personal contact may give and may be guided by means of printed and written suggestions. 14 ORGANIZED BUSINESS KNOWLEDGE The plan of the Modern Business Course and Service is to supply a system- atic course of reading, to guide subscribers in their reading and to help them apply business principles to specific cases, and this plan seems to me in principle thor- oughly sound. The Men Behind There is an important distinction, of course, between soundness in principle and success in practice. My second reason for recommending the Modern Business Course and Service is my con- fidence in the abihty of the Executive Officers, Advisory Council and Staff to make the plan work. My associates on the Council are men of vigor and of wisdom, whose judgment carries great weight. I know all the members of the Staff and can vouch for the sincerity, the high ability, the thoroughness and the practical good sense of each one. The wonderful development of the Alexander Hamilton Institute is conclu- sive evidence that my confidence is well- founded. ORGANIZED BUSINESS KNOWLEDGE 15 The Best Business Literature My third reason for recommending the Modern Business Course and Service is my belief that the literature, which is the basis of the Course, is the best that has yet been prepared for the use of busi- ness men. In picking out the authors of the text- book series I tried to choose as author of each volume or half volume the man best fitted to write clearly and authoritatively on that subject, and with three exceptions, none of any great importance, my first invitations to prepare texts were accepted. The authors of the series of written lec- tures are among the ablest business and professional men in the country, and the other literature of the course, in my opin- ion, comes up to the same high standards. Accomplished Facts My fourth and strongest reason for recommend- ing the Modern Business Course and Service is that I have personally seen some of its great results. I have been told by certain of the leading business men of this country that the Course and Service has brought them new and invaluable ideas. I have 16 ORGANIZED BUSINESS KNOWLEDGE watched young men under its influence grow almost visibly from day to day in business power and posi- tion. I have observed large business organizations expand as the officers and their assistants drew from this Course and Service fresh knowledge and inspiration. These are results^ not theories. My faith is built on the solid rock of accom- plished facts. '^<'S.^ jf\> m**^. ;^-^^:8 -;. ^^ i-^^:<^: \\^rr:i:i^- Q'-x^A- -^'^^^