Excerpt from Lectures on Organization: Delivered in the Course on Industrial Organization in the Graduate School of Business Administration of Harvard University
As an industry or business begins to involve large size, great numbers, and complexity, organization becomes necessary simply for the direction, control, and handling of affairs, quite aside from any question of direct economy. It becomes necessary to set off groups of workers, to divide responsibilities, duties, and processes, so that affairs may be kept within the scope and ability of those who are directing the undertaking. A virtue has, however, been made of this necessity for division, because it becomes possible, by dividing duties and functions, to conserve special skill, ability, and use, and to direct all effort into definite paths, to which it becomes accustomed and thus gains in efficiency.
It is of little importance how the great growth in industries has come, - whether a realization of the benefits that arise with division of labor and conserving of skill induced us to gain size so that these advantages might be brought into play, or whether size came first and the advantages were a fortuitous accompaniment.
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