Management Speaks to the Graduate

Vice President and Director of Inland Steel Company, CLARENCE B. RANDALL puts the problems of management squarely up to the young graduate. A large percentage of the veterans now coming out of our colleges are eager to work in personnel relations. Dealing with the employees of industry is a highly specialized job, and here, says Mr. Randall, are the key decisions which a young man must confront before he steps in to represent management in collective bargaining.

by CLARENCE B. RANDALL

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IN industry people are vastly more important than machines. We speak of this as the mechanical age, and are rightly proud of our engineering achievements, but the human problems are the ones which give to our industrial fabric the most severe test.

It is natural that the specialized job of dealing with the employees in industry should hold great attraction for students. On campuses all over the United States young men and women of promise seem eager to enter the field of industrial relations. In my college generation the attractive youngsters all tried to go into the bond business; twenty years later they went into advertising; but today in astonishing numbers they are eager to take on this significant and extraordinarily difficult responsibility.

I find great hope in what this may mean to industry fifteen years from now. As things stand today, the mature leaders in this field, whether on the management side or the labor side, have come to their responsibilities largely by accident. Occasionally in the labor unions you will now find men who were literally born into the labor movement and who from their earliest recollect ion hoped some day to be organizers and officers of a union. This is uncommon. Usually the labor leader is a man from the ranks to whom God gave the gift of speech. But rare as they are in the labor movement, men with special training are still more unusual on the management side. More often, both the man who formulates broad labor policy and the man who puts it into daily practice are fellows who just happened to be of the right age and availability when top management suddenly realized that this must become a specialized function. They were recruited from every phase of business.

It will be a great thing for the country when the leaders, both in the unions and among industrial executives, can be chosen from mature men who not only possess special personal gifts for the work, but who have had also the benefit of the best training that higher education can provide. This leads to the question of what that training and education should be, and it is to this question that I address myself.

Above all else, I urge the young man who wishes to enter this important work to formulate at the outset a philosophy to govern his life. He must know what he believes, and then consciously plan each step of his personal development with strict fidelity to those principles.

If he decides to be a collectivist, that is his privilege. But let him do so honestly and openly. If he thinks that Communism will bring the greatest happiness to the greatest number of people, let him raise the red flag so that all may see. Such a decision, however, should automatically exclude him both from the management side and the tradeunion side, and bar him from the field of industrial relations. His field should be politics, and his objective the destruction of the private capitalistic system.

If, however, he should decide, as I have done, that the free enterprise system and private management bring the largest measure of happiness to the greatest number of people, he must know why he thinks that. And thereafter he must scrupulously relate all his actions to the maintenance of that system. He must seek its preservation with the same tireless devotion with which the Communist seeks its destruction. All this will be true whether he selects management or the labor union as the field for his lifework, since only within free enterprise do honest labor unions survive.

The simple basic facts of economics must be his working tools. He must see clearly that wealth must be produced before it can be divided, and that the production of more goods and services is the only means by which the general standard of living can be raised. He must see that effort is the counterpart to wages, and must never tolerate wages for services not performed. He must see the phrase “social gain” in its true perspective. He must recognize that in its best sense this means gain by all, and not the taking from some to give to others.

The next step in his reasoning will be to understand that the preservation of free enterprise requires private management. This means freedom for management to manage, freedom for unions to make their own decisions, and freedom for the two to disagree. The interruptions in production which strikes and lockouts bring are direct evidence of the continuing existence of freedom and of the private management system. To eliminate those interruptions by law is to suppress freedom. Each step toward government control is a step toward collectivism. Peace through mutual understanding and not peace by edict must be the goal.

The young student may agree with all of this and yet find it difficult to hew to the line in practice. For example, he may be confused as to the place that arbitration should have in industrial disputes. As a member of the general public, he will be annoyed by interruptions in production, particularly when the interruption occurs in an essential service that affects his daily life. His instinct will be to turn to government, and he will talk about factfinding or a labor court, or some of t he other plausible proposals by which an annoyed public seeks to bring the state back into the industrial scene. It takes insight and character at this point to apprehend that either forbidding a union to strike, or requiring management to arbitrate a substantive question, is in fact a denial of the private enterprise system. The concept of arbitration is one toward which every honest mind is attracted on first approaching the problem of industrial disputes, but it will prove grossly misleading unless we recognize that it may be employed for two sharply contrasted purposes, one proper and one improper.

The proper use of arbitration is for the settlement of differences regarding the correct interpretat ion of a written contract covering terms of employment. This is a simple question of honor. No employer should set himself up as the judge of whether he has made his own word good. He should submit such a dispute to a disinterested outsider.

The improper use of arbitration is equally clear. The differences between management and labor that cause paralyzing strikes are not usually questions of interpretation of agreements. They are basic differences in economic concepts. To submit such differences to arbitration is to abandon private management.

The executives chosen to run a modern business know more about its problems than anyone else. If they don’t, they will be removed and those who have greater abilities will be put in their places. Those men know the market for the goods; they know the past history and the future expectancy of the company. If, in good faith, they believe that no further wage increase can be granted without injuring the business, their judgment must not be superseded by that of someone who is not present at the bargaining table. To do so is to retreat from the private enterprise system.

To put it in other words, either private individuals are to have freedom to make decisions, or t hat power is to rest in the state. There is no middle ground. The first is the enterprise system, the second collectivism, no matter by what other name these concepts may be called. Either our economy is a mosaic made up of a multiplicity of decisions by a great many people throughout the nation, or it is a monolith representing the sole judgment of the rulers. I happen still to believe that the wisdom of t he many is superior to the wisdom of the few. I still prefer the interruptions that come from honest differences to the loss of the essential freedoms that follows absolutism in any form.

And those who champion the right of free workers to strike must likewise champion the right of free men in management to say no in the face of a strike. Freedom is not unilateral, but multilateral.

2

THE college senior may believe instinctively that all men are high-minded and honest — and, of course, they aren’t. They certainly aren’t on the management side. I should be the first to admit that.

And they certainly aren’t on the union side. Many of my friends in the labor movement would admit that too. That there are Communists who control certain unions is a grim fact. There are men today in high offices in some of the unions who are there for no other purpose than to make all the trouble they can in industry. They do not believe in the enterprise system and would destroy the entire principle of private capitalism if they could. They are always able, adroit individuals, well schooled in their trade.

Competent education in the proper techniques of collective bargaining won’t work with such men. They have no intention whatever of bargaining honestly. Their lives are a fraud and they can be dealt with in only one way. They must be met with complete firmness on the part of management, and every effort must be made to expose their bad leadership to the public and to the workers involved. Such firmness and such effort at exposure will cause management frequently to be attacked by methods which only the stouthearted can endure, but such attacks must be endured for the sake of our American way of life.

There are other labor leaders who, while not Communists, become so accustomed to power that power becomes their creed. They make every decision in terms of power. Their attitudes, their policies, their actions, all flow from a sense of expediency as applied to the development of power for themselves and their associates. Quite often they are honest and agreeable individuals when encountered by themselves, but the very necessities of their life cause them constantly to seek more power. Such men are found at every level in the union hierarchy. At the beginning of his career the individual may be merely a grievance man in a department. He is ambitious to become a member of the executive committee of his local union, or perhaps an officer. He therefore creates incidents in his department in order to attract attention to himself. Each time he can score on his foreman, his career is advanced. When he becomes an officer, he gets the desire to become a district organizer; so, at the plant level, he arranges broader incidents. Guerrilla warfare of this sort obviously reduces the production of goods upon which the welfare of all the people depends.

At the top level in the international union the tool of this power is industry-wide bargaining. A man who can threaten the welfare of the entire nation by giving a signal that will stop every factory producing an essential item can usually bring management to its knees in short order. He possesses a power that should not exist in any one man or any group of men in a democracy. He is monopoly incarnate. Management is the fulcrum, but it is the public against whom the pressure is exerted. The public is always the victim of monopoly, and it is for that reason that monopoly wherever found must be outlawed in a democracy.

Where the demands of an international union are simultaneously presented in identical terms to several hundred employers, located in every section of the country, collective bargaining as it was contemplated by the Wagner Act disappears. The rights and privileges of a small group of workers employed in a single plant are lost sight of in the vast drama of power at the national level. No techniques which the young man has learned at the university about sound collective bargaining will have any bearing when his plant is swept into the vortex of such titanic struggles. A factory in Bushville, Iowa, may have very real problems for men who work in Bushville, but what does a man in Pittsburgh know or care about them?

This nation-wide hysteria must be stopped if private management is to survive.

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EVEN when genuine collective bargaining does occur at the local level, the young candidate may find some of his illusions shattered.

If he believes that force is still employed by management in so-called big business to break up unions, he is wrong. Stories of the Haymarket riot, Homestead, Memorial Day in Chicago, and other accounts of violence, which men on the labor side seem never willing to let pass into history, may have bred in his mind an apprehension that tear gas and rifles are still relied upon by reputable management. If isolated exceptions to peaceful negotiation occur anywhere in the country, I should be the first to deplore them.

That armed guards did sometimes form the background for industrial relations in the past, I recognize. I regret the history of that period. I also regret the Vigilantes of the frontier days in Texas and California. Obviously, maintenance of law and order must never rest in private hands, but must always be a function of government.

The college graduate, however, may not be prepared for the use of force that he finds on the labor side. He will be first saddened and then deeply angered at the use of physical violence to achieve labor’s ends, and at the callousness with which it is practiced and defended by labor leaders. He has been taught to respect the law, and the sight of men swinging clubs and hurling stones at those seeking to go about the ordinary tasks of life will be abhorrent to him. Bloody heads and broken arms and t he use of filthy epithets toward both men and women have not been part of his life, and he won’t like it. Nor will he complacently accept anonymous threats to his wife on the telephone, or signs painted on the houses of those who think differently from the cowards who perpetrate the wrong. This is called militancy in the labor movement, but to the college graduate it is anarchy.

He may be greatly disillusioned at what he learns about democracy within the unions. The phrase “strike vote” carries in his mind a connotation of the Australian ballot and secrecy. He does not know that sometimes the strike vote means that the organizer stands up in front, of the hall and says, “Let any——who doesn’t want to strike stand up. We want to know who the management’s stooges are.” And he does not know that where ballots are used, there is commonly no poll list to prevent multiple voting, nor any safeguard to prevent ballot box stuffing.

He will learn that the average worker stays away from meetings to avoid trouble for himself. This, of course, is another form of the ordinary human apathy which causes cit izens to stay away from the polls in governmental elections. It is the type of neglect of duty which makes it possible for corrupt gangs to establish political dominance over great cities. There is this distinction, however. In the labor unions the apathy seems to be a little more intensive, and it is often aggravated by fear of violence. The opportunity for aggressive individuals to seize power is a little more ready-made. It is common, for example, in a large industry to find a single local union that has 10,000 members. In such a union a meeting to which 400 men came would be large, and there will often be meetings attended by fewer than 100. This ratio of participation is far smaller than that which occurs in our cities even in bad election years.

He will be surprised to discover that men can belong to a local and be active in its administration who do not work at the plant in question. He may find that the speaker at the rally in the union hall, or the captain of the picket line, is a former employee who was discharged for cause. Even if the discharge were made the subject of a grievance, taken to arbitration, and sustained, the termination of employment and withdrawal from the certified unit does not bring about withdrawal from the union or from participation in its affairs. This puts an unusual twist into the very delicate problem of human relations Here is a man motivated by revenge, whose sole purpose in continuing his membership in the union by paying dues is to do all that he can to make trouble between management and the workers. The college graduate will need all his training and self-control to remain poised in the face of such provocation.

On this question of the seizing of leadership by the aggressive few, it must be borne in mind that in the mass labor movements membership consists of men who have not been considered eligible for promotion into the junior supervisory ranks. In other words, the men who by temperament and native ability possess the natural quality of leadership are so eagerly sought by management that they quickly pass over into the foreman group and cease to be eligible for membership in the union.

Here again, our student might be surprised to find that it is quite common in the labor movement for men of great gifts and strong purposes to refuse to accept promotion to foremen in order that they may retain membership in the union and exercise the power which their natural aggressiveness has brought to them. It seems to me clear that a man who refuses promotion does not believe in the enterprise system under private management. His conduct justifies the inference that his objective in the labor movement is to embarrass management, reduce production, and prevent the perpetuation of the enterprise system. If that be true, the results of his leadership will not be social gains.

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IF OUR young man should elect to seek employment on the management side, he will first have to go through the processes of learning the business. He cannot deal with human relations until he understands what products the company makes and what the men do who manufacture the products, working at the company’s machines and in its plants. He cannot understand the attitude of a workingman until he understands the whole environment of the workingman. He will do this best by working himself, with his own hands. There is no substitute for learning things the hard way, and whoever tries to leap over that process and omit it from his personal experience is handicapping himself in his own future development. This means working day shift, night shift, or any other shift; it means proving his own mettle in every way.

Consider, for example, the man who carries the greatest responsibility at the principal steelmaking plant of my company. His childhood in New York certainly had not been altogether kind, and he was denied the advantages of the formal education which I received. High school plus one year in college had to suffice.

He arrived outside the gate of our plant at a time when we were unable to take on new men. By a stratagem which no one has ever forgotten, he eluded the watchman at the gate and got to the hiring office. His enterprise was rewarded by his being given a job as a day laborer in the scrap yard. ITe went to work willingly with his hands, and by sheer force of personality became turn foreman and then general foreman of the scrap yard. From there on his progress was sure and rapid. Night school gave him his technical training. He went next to foreman at the open hearth furnaces, thence to superintendent of open hearths, and thence to industrial relations. The time cycle for all of that was nineteen years. During all of this time he was living in the same community with workingmen, and he has for the workers in our plant a depth of understanding and affection which no amount of academic education can provide.

Let us assume that eventually our candidate has a mature knowledge of the business and sound experience with the functioning of the labor relations program in his company. Now he is prepared to take his place at the bargaining table and represent management in the day to day and year to year relationships with the union that represents the workers. Now he will put into practice the theoretical understanding of human relations in which he has been trained.

A new phenomenon which will come to him as a severe shock, and which is almost completely unknown to the general public, is the experience called by insiders “bargaining by exhaustion.” It will not be possible for our young man to do his job within the ordinary working hours, and thus maintain evenness of temper and balance of judgment in the way that his contemporaries who are in other phases of the business do. Young men working at top speed in purchasing, financing, or selling are urged by farsighted management to close their desks promptly at the end of the day and get some rest and relaxation. Everyone knows that a clear mind is necessary to the exercise of good judgment.

The man working at the bargaining table, however, finds himself these days skillfully and intentionally blocked from maintaining judgment and poise by the field tactics of trained union bargainers. They hope that at three in the morning, after eighteen hours of continuous session, locked up in a smoke-filled room, the management man will falter. They hope that then he will concede almost anything in order to get a contract signed or a grievance settled. They also know that the management man will hesitate to terminate the session for fear it will be charged that he has committed an unfair labor practice by refusal to bargain. They reduce the strain for themselves in two ways: they work in relays, and they fill the passing hours with what in their hearts they know is play acting.

This phenomenon is not imagination. It is real, and if collective bargaining is to be raised to the high level in American industry that it merits, labor leaders must abandon this technique. It is unfair by any standard for them to delay all day in order to keep the management man at the table so far into the night that fatigue and utter physical exhaustion alter his clearness of mind and evenness of temper.

Such long nerve-racking sessions can, over a period of years, seriously affect the capacity for objective thinking in an executive. In spite of every good intention, he will tend to develop an attitude of hostility and belligerence. Nothing could be worse for harmonious relationships in industry than to have those animosities entering into the hearts of men. Here is where education and character count. A young man who has sought this as his life profession and trained himself for it will rise above that and never let it happen in his own life. He will never forget his interest in and affection for the individual worker. He will never let that man become a card in a file, or just a member of the union; he will always be a particular human being named Joe, who is honest, loyal, and who wants to give a full day of production for each day of pay.

Great forces are abroad in our social life, and great problems lie ahead which need solution. It is the essence of youth, however, to plunge into hard work with a light heart, and that is the spirit we now need. Universities themselves are making a great contribution. We recognize a growing sureness in their handling of this important subject. Being above the battle, they bring us moderation. The lubricant of their fresh approach reduces the friction of our relationships.