materials that are processed for sale. At its core, it is deploying capital to seek gain, profit, and activity.
One to two million years ago, our distant ancestors had already discovered materials, including flint, a very hard rock, to make tools - extensions of the hand - and weapons (arrowheads, axes). Our ancestors, like today, sought to survive: we must eat and defend ourselves.
Let’s skip forward a century or two! During the Industrial Revolution, discussed in Chapter 5 of the second volume, handicraft was replaced by industry, characterized by raising capital, the use of machines that made use of the new energy, that is, steam, and men mostly gathered in factories. A century earlier, Colbert (1619-1683) had created a number of factories during the reign of the Sun King (King Louis XIV of France); it was a question of making manufactured products which were equivalent to products made by hand, although sometimes made using machines (looms).
Mechanization, mining, and capitalism, the history of which Joyce Appleby described in a masterful book (Appleby 2010), emerged during the Industrial Revolution. She defines capitalism as:
a system based on individual investments in the production of marketable goods.
At the end of the 19th Century, the following were developed: railways (the East Coast of the United States joined the West Coast in 1869, in Promontory, Utah), maritime transport, inventions that succeeded each other at high speed in all areas and led to the birth to the modern enterprise. The main stages of this evolution can be found in (Dal Pont 2012); to simplify, we will say that the enterprise in which we are interested and which we will describe as modern descends from the manufacturing company of the end of the 19th Century.
The company is a source of wealth, synonymous with employment. Wealth is created in the workshop; this is the thesis defended by Adam Smith (1723-1790), British and founder of modern economics in his 1776 work, The Wealth of Nations.
In what follows, we will distinguish three main classes of companies.
1.1. Manufacturing, process, and service industries
1.1.1. Manufacturing industries
We define these as activities whose production is said to be discrete, because they offer identified objects. It is the field of the automotive and aeronautics industries, and household appliances.
They often call on the chemical industries: an automobile, for example, is riddled with chemicals (windshield, dashboard, seats, pipes, sheath of electric cables, etc.).
1.1.2. Process industries
These transform raw materials and/or energy by chemical, biochemical, or physical means. We can cite chemistry, pharmacy, cosmetics, metallurgy, etc. Their economic importance is considerable. Chemistry is the “mother of all sciences”, said Thomas Edison; we can say that it is also the mother of all industries.
Process industries can have discrete parts: the active ingredient of a drug can be manufactured in the form of a (discrete) tablet in boxes, boxes in crates, crates in pallets. Bag-filling machines, wrapping machines, and packaging machines are often the last link in the process industries. It’s mechanics, not chemistry!
1.1.3. Service industries
These normally have fewer industrial assets. They serve as support for producers: maintenance, engineering, design office, transport, catering, mail, etc. SNCF (France’s national railway company) is a service company that uses huge industrial tools.
We can see that the line is not exactly straight. The important thing is to identify the professions involved, the skills, and the customers. It is not so obvious when we delve into the question.
1.2. Founding fathers of the industrial enterprise
The industrial enterprise as we see it today took shape at the end of the 19th Century. Among all the inventors and entrepreneurs who shaped it, we have chosen four giants from the 19th and 20th Centuries. These men contributed to an unprecedented industrial boom and profoundly changed the society of the time. We could no doubt have chosen others, but, as we know, “to choose is to renounce”.
Detailed explanations on the contribution of these four great figures to the industry can be found in (Dal Pont 2012). To summarize:
– Frederick W. Taylor, father of Taylorism, analyzed the work of the workers at the workshop and evaluated each gesture in time and motion to increase productivity. A specific job was shared - divided - between several individuals. Humans are enslaved to the machine: who does not remember Charlie Chaplin’s Modern Times? Taylor was behind workers with a stopwatch; he sometimes owed his salvation to running away;
– Henri Fayol, father of Fayolism, invented the functions of management, a model still widely in use today (see section 1.3);
– Henry Ford, father of Fordism, was a strong supporter of Taylorism. A farmer’s son, he invented the assembly line and standardization, which made the automobile a cheap product, as well as the industrial integration. His Model T, “a motor car for the great multitude” in 1908, was full of inventions (transmission, suspension, etc.). It was the car of the century!
– Thomas Edison, the legendary inventor with 1,093 patents, created laboratories to do business: as soon as the luminescent lamp left Menlo Park in 1882, it illuminated Pearl Street in New York, thanks to the direct current generated by its first power plant. We can say that Edisonism is the way to create business by doing research, R&D, or research and innovation, as we would say today.
NOTE.- Why not Gustave Eiffel? Inventor and businessman, Gustave Eiffel is the archetype of the 19th Century engineer. He left works that are still admired by the masses. Should we not talk about the Eiffel Tower? However, he did not affect and transform the society like the “nominees” mentioned above did.
Figure 1.1. Portraits of the fathers of the modern enterprise (from left to right) Frederick Winslow Taylor (1856-1915), Henri Fayol (1841-1925), Henry Ford (1863-1947), Thomas Edison (1847-1931)
1.3. Anatomy of an industrial enterprise
What follows is not a lecture. Our goal is only to provide a few benchmarks to students and professionals to help them in their reflections on the world of business and perhaps guide them in their professional choices.
A business rests on four pillars:
1 – economic;
2 – financial;
3 – human;
4 – legal.
It is an organization that aims to offer goods and/or services. One or more people have raised capital and risked their money in the hope of earning it. A
