184 Labor and Monopoly Capital
As Chandler has related, the eventual outcome of this pyramiding was the need for decentralization, and the result was the modern decentralized corporate structure pioneered by Du Pont, General Motors, Standard Oil of New Jersey, and Sears Roebuck in the 1920s, and much imitated since. The essence of the policy has been best explained, in brief form, by Alfred P. Sloan, long-time operating head of General Motors and the person responsible, more than any other, for the adaptation of this method to that corporation. It places, he said, “each operation on its own foundation . . . assuming its own responsibility and contributing its share to the final result."The final result is of course the accumulation of capital. Each section “develops statistics correctly reflecting the relation between the net return and the invested capital of each operating divisionthe true measure of efficiency. . . ."This “enables the Corporation to direct the placing of additional capital where it will result in the greatest benefit to the Corporation as a whole. 6
From this brief sketch of the development of the modern corporation, three important aspects may be singled out as having great consequences for the occupational structure. The first has to do with marketing, the second with the structure of management, and the third with the function of social coordination now exercised by the corporation.
The overall purpose of all administrative controls is, as in the case of production controls, the elimination of uncertainty and the exercise of constraint to achieve the desired result.\* Since markets must remain the prime area of uncertainty, the effort of the corporation is therefore to reduce the autonomous character of the demand for its products and to increase its induced character. For this purpose, the marketing organization becomes second in size only to the production organization in manufacturing corporations, and other types of corporations come into existence whose entire purpose and activity is marketing.
These marketing organizations take as their responsibility what Veblen called “a quantity-production of customers."His description of this task, while couched in his customarily sardonic language, is nevertheless a precise expression of the modern theory of marketing: "There is, of course, no actual fabrication of persons endowed with purchasing power ad hoc . . . ; nor is there even any importation of an unused supply of such customers from abroad,—the law does not allow it." Rather, as he points out, there is “a diversion of customers from one to another of the competing sellers." But, from the point of view of each seller, this appears as “a production of new customers or the upkeep of customers already in use by the given concern. So that this acquisition and repair of customers may fairly be reckoned at a stated production-cost per unit; and this operation lends itself to quantity production." Veblen goes on to point out that “the fabrication of customers can now be carried on as a routine operation, quite in the spirit of the mechanical industries and with much the same degree of assurance as regards the quality, rate and volume of output; the mechanical equipment as well as its complement of man-power employed in such production of customers being held to its work under the surveillance of technically trained persons who might fairly be called publicity engineers."8
Moreover, within the manufacturing organization, marketing considerations become so dominant that the structure of the engineering division is itself permeated by and often subordinated to it. Styling, design, and packaging, although effectuated by the producing part of the organization, represent the imposition of marketing demands upon the engineering division. The planning of product obsolescence, both through styling and the impermanence of construction, is a marketing demand exercised through the engineering division, as is the concept of the product cycle: the attempt to gear consumer needs to the needs of production instead of the other way around. Thus through the direct structure of the marketing organization, and through the predominance of marketing in all areas of the corporation's functioning, a large amount of labor is channeled into marketing.
Second, the change in the overall structure of management: We have already described the specialization of the management function, and the reorganization of management from a simple line organization—a direct chain of command over operations from executive head through superintendent and foremaninto a complex of staff organizations suited to a subdivision of authority by various specialized functions. It must now be noted that this represents the dismemberment of the functions of the enterprise head. Corresponding to the managing functions of the capitalist of the past, there is now a complex of departments, each of which has taken over in greatly expanded form a single duty which he exercised with very little assistance in the past. Corresponding to each of these duties there is not just a single manager, but an entire operating department which imitates in its organization and its functioning the factory out of which it grew. The particular management function is exercised not just by a manager, nor even by a staff of managers, but by an organization of workers under the control of managers, assistant managers, supervisors, etc. Thus the relations of purchase and sale of labor power, and hence of alienated labor, have become part of the management apparatus itself. Taken all together, this becomes the administrative apparatus of the corporation. Management has become administration, which is a labor process conducted for the purpose of control within the corporation, and conducted moreover as a labor process exactly analogous to the process of production, although it produces no product other than the operation and coordination of the corporation. From this point on, to examine management means also to examine this labor process, which contains the same antagonistic relations as are contained in the process of production.\* The effects of this will become clearer when we examine the evolution of clerical work.
The Modern Corporation
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\* Seymour Melman says: "The explanation of the rather homogeneous increase in the administrative type of overhead will be found, we suggest, in the growing variety of business activities which are being subjected to controls, both private and public. As administrators have sought to lessen the uncertainty of their prospects, by controlling more and more of the factors which determine the advantage of their plants and firms, they have attempted to control, in ever greater detail, production costs, intensity of work, market demands for products, and other aspects of firm operation. Following this hypothesis, the evolution of the business process towards the expansion of controlled areas of activity by management comprises the basis for the additions to administrative functions, and, thereby, the enlarged administration personnel."7