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A company, like any other society, must exist for the achievement of some objective or objectives. Some people have suggested that a company has only one objective that is to make a profit. It is true that no company could survive permanently without making a profit but this is hardly the reason why it exists; it is a condition which must be satisfied if existence is to continue permanently. We cannot live without eating but we do not live in order to eat. Companies exist in order to satisfy consumers wants; and perhaps even to create wants before satisfying them, since in many cases these wants did not exist before they were suggested to consumers by advertising or other selling methods. It would, for example, hardly have occurred to people to want television sets before manufacturers had put the possibility of television before them. A company determines its objectives, therefore, by deciding what kind of consumer demands it proposes to attempt to satisfy, and if necessary, create.

The determination of objectives is not a mere theoretical exercise, to be engaged in if directors happen to be interested in this sort of thing, but a practical necessity which affects the company's prosperity. Suppose, for example, that a company manufactures motor-cars. Now a motor-car may serve at least three different wants. It may be regarded simply as a convenient means of transport, needing to be inexpensive but not necessarily either fast or luxurious; or it may be regarded as a means of recreation by people who simply enjoy driving; or it may be regarded as an outward sign of the wealth or prestige of its owner. The manufacturer must be clear which of these wants he is trying to satisfy, and he must have reasonable grounds for thinking that the size of the market he can secure for himself in his chosen field is sufficient to enable him to pay his way at the prices which he can charge. If the manufacturer is confused about the kind of market he is supplying he may satisfy none of them.

It is hardly possible to define company objectives except in very general terms, and obviously such a definition is by itself of little practical use as a guide to action. It is necessary to interpret company objectives in greater detail, examining their implications in practice. The result of this interpretation is policy. A company policy may be thought of as the methods adopted in order to achieve its objectives. Clearly, policy must be worked out in a number of fields, examples of which are design, production, personnel, and sales, and the detailed plans made in these areas of activity must be drawn up in such a way as to fulfill company policy, which in turn should enable the company's objectives to be achieved. If, for example, a company is making a small, inexpensive car, design and production policy must be directed towards finding cheap methods of production for a very large output, and many refinements (desirable in themselves) will be sacrificed to this end. Where expensive cars are being made it will probably be more important to have these refinements even if they increase the cost of production very substantially. The implications for design, production, and sales policy are obvious, and it is obvious also that policy must be adequately communicated to all concerned so that they work in harmony with it.

A company must also determine a policy which will guide it in its relations with its employees. What kind of training does it give? Is it to recognize a closed shop or not? Is it to provide a pension scheme? To what extent should it provide welfare facilities? Do foremen have the right to hire and fire their own labor or is this the responsibility of a personnel department? These are all elements in a personnel policy and unless this policy is first thought out and then communicated to all who have to apply it (including the foremen) the treatment of personnel will not be uniform throughout the company, causing discontent through failure to provide managers and supervisors with the guidance which they have the right to expect. If directors fail to formulate and communicate policy, each manager and supervisor will be compelled to formulate his own policy, and it would be surprising if the result were the harmonious achievement of company objectives. It can also be said that a supervisor who does not make sure that he understands what is required of him by the company is not likely to be running his department satisfactorily from the company's point of view.

The Communication it is probably more important for all members of management to be conscious of the need for it. Where this is so, managers will take the trouble to keep supervisors fully informed at least of those aspects of policy which concern them directly. Supervisors can also help this process by making sure that they get the information they need. Formal machinery is however useful in providing the occasion for an inter-change of views and information and for continually reminding everyone concerned of its necessity. Some companies have regular weekly meetings of foremen with the works superintendent to whom they are responsible. Others have in addition to this a foreman's guild or society covering the whole company or factory, and this has the advantage that it provides a means of keeping foremen informed, not only about routine matters which are their direct concern, but also about the broader aspects of company policy. Most companies have in addition a book of works rules which embodies the company policy in the fields covered by it. In companies where there is regular consultation between management and workpeople through a works council, it is particularly desirable to maintain regular consultation also with foremen. If this is not done works councilors or trade union representatives can easily become better informed about the company than the foremen.

It seems desirable that the normal means of communication should be up and down the management line, and that a workman seeking information should turn naturally to his foreman, who should normally be able to give him the information or should be able to get it for him without much difficulty. Disputes and requests should naturally go first to the foreman and only in special cases should the matter go beyond him. It seems undesirable that a man should feel the need to go first to a works councilor or union representative. To encourage this is to weaken the authority of the foreman and also tends to magnify the importance of minor matters which otherwise could be settled, without fuss, at the shop-floor level. Management can increase the ability of the foreman to maintain his authority by seeing that he is informed and by encouraging workpeople to go to him first.

By Artur Victoria
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