How to manage a business would seem to be of such importance as to insure a veritable flood of books on the subject. Actually there are almost none.
There are hundreds, if not thousands, of books on the management of the various functions of a business: production and marketing, finance and engineering, purchasing, personnel, public relations and so forth. But what it is to manage a business, what it requires, what management is supposed to do and how it should be doing it, have so far been neglected.*
This oversight is no accident. It reflects the absence of any tenable economic theory of business enterprise. Rather than start out theorizing ourselves, we shall therefore first take a good look at the conduct and behaviour of an actual business enterprise. And there is no better illustration of what a business is and what managing it means, than one of America’s most successful enterprises: Sears, Roebuck and Company.†
Sears became a business around the turn of the century with the realization that the American farmer represented a separate and distinct market. Separate, because of his isolation which made existing channels of distribution virtually inaccessible to him: distinct, because of his specific needs which, in important respects, were different from those of the city consumer. And while the farmer’s purchasing power was individually low, it represented a tremendous, almost untapped, buying potential in the aggregate.