University students who major in Business Management probably heard of Henri Fayol’s 14 principles of management (and his four functions of management) and Frederick Taylor’s principles of scientific management. However, a name that most likely sounds unfamiliar to them is that of Charles Clinton Spaulding’s 8 Fundamental Necessities of Management. Unfortunately, business management textbooks and other management sources have often omitted the contributions of African-Americans to the historical development of the field. Over the years, we noticed this phenomenon and felt impelled to make a concerted effort to examine historical documents and explore any significant contributions made by people of color that may have been overlooked.
Our search led us to a 1927 article written by Spaulding, which was entitled “The Administration of Big Business.” It was published in the Pittsburgh Courier, a once widely read African-American newspaper, and it outlined Spaulding’s eight “fundamental necessities” for effectively managing a business. Based on that archival finding we were inspired to write a paper entitled “Rediscovering Charles Clinton Spaulding’s ‘The Administration of Big Business’: Insight into Early 20th Century African-American Management Thought,” which was recently published in the Journal of Management History.
As business educators, we are seeing the need to utilize critical pedagogy as a method to increase the entrepreneurial self-efficacy of Black college students. The integration of African-American Management History into the business curriculum will demonstrate to Black students that they too can be successful in managing a successful enterprise in spite of the challenges faced by people of color. It will also allow them to think critically about their business education and ultimately find ways to make a profit and make a difference in their communities just as historic African-American business leaders (such as C. C. Spaulding, John Merrick, and Alonzo Herndon) did in the late 19th century and early 20th century.
Some of our students mentioned to us after lectures that it was inspirational to learn that Spaulding, a Black man born ten years after slavery ended, had developed his own philosophy of management 22 years before the seminal work of Henri Fayol (General and Industrial Management) was translated into English. Students that attend HBCUs and other minority serving institutions who have aspirations of becoming entrepreneurs and business executives can learn from his 8 fundamental necessities that are outlined below:
Necessity 1: Cooperation and Teamwork
Spaulding wrote “if I were asked to name the one fundamental necessity in the administration of big business I would answer immediately that a thorough-going cooperation is essential on the part of the executives in the development of big business.”
Necessity 2: Authority and Responsibility
Spaulding stated that “there must always be some responsible executive who must pass upon every issue that is fundamental; he must be the final authority from whom there is no appeal except to the entire group in conference.”
Necessity 3: Division of Labor
Spaulding stated that “large scale business is operated on the principle of the division of labor. Departmental divisions function separately under the direction of experts who may or may not be executive officers.”
Necessity 4: Adequate Manpower
Spaulding stated that first and foremost success in business depends upon adequate manpower. Our schools are turning out only partially trained young people with no business experience whatsoever, and while many of them are good technicians they are for the most part helpless in their new jobs because there is little correlation between the classroom and the business office.”
Necessity 5: Adequate Capital
According to Spaulding, “Initial capital must not only be sufficient to commence operations, but must be sustaining over a given period, which, in the experience of similar enterprises, is essential … .Even large scale corporations frequently dissipate their surplus earnings in hurried dividends instead of re-investing the surplus for the extension of the business.”
Necessity 6: Feasibility Analysis
Spaulding noted that another error made by entrepreneurs and executives “is a lack of knowledge of the needs and resources of the territory … .Frequently it happens that as soon as one person or group appears successful in a given line another person or group organizes a new enterprise in the same line without ascertaining the advisability of such a move, as reflected in the needs and resources of the community.”
Necessity 7: Advertising Budget
Spaulding wrote that “when it comes to advertising, a large number of our organizations are depriving themselves of the most effective means of propagation. In traveling about the country I have noted a large number of enterprises engaged in the manufacture of products. Very few of these have an annual appropriation for advertisement.”
Necessity 8: Conflict Resolution
Spaulding asserted that “the problem of contact is the chief problem of human intercourse. Personal contact and business contact, if not properly directed and if not based on mutual goodwill and intelligence derived from a common sense education, will develop personal conflict and business conflict instead of personal cooperation and business cooperation.”
Spaulding’s 8 fundamental necessities of management provided much needed advice to African-American entrepreneurs and executives in the early 20th century. His name is not very well known today, but he deserves recognition as his philosophies helped shape management thought and practice, and university students especially at HBCUs can still learn from his leadership and insight, which is still relevant in contemporary times.
Dr. Leon C. Prieto is an Assistant Professor of Management at Clayton State University.
Dr. Simone T. A. Phipps is an Assistant Professor of management at Middle Georgia State University.