ORGANIZATION OF THE AGRICULTURAL ENTERPRISE 317 



The conduct of any business may be thought of as consisting of 

 three parts, or processes: (i) buying, (2) alteration (i.e., recombina- 

 tion, elaboration, change in form, place, and time), (3) selling. These 

 are continuous until the last sale is made and the whole business is 

 ended. Buying and selling make up nearly all of mercantile business, 

 alteration being subordinate; whereas alteration is the most striking 

 feature of manufacturing, in which buying and selling appear (often 

 mistakenly) to be quite unimportant. 



Almost every business today requires from time to time additions 

 of capital, temporary or permanent. Frequent use must be made of 

 credit. The confidence and support of lenders, whether banks, trust 

 companies, individual shareholders, or investors in bonds, must be 

 secured by the management. Good judgment of the money market 

 often is as vital as judgment of the market for the particular product. 



The large classes of goods which are to be bought are equipment, 

 materials, and labor. In the main the prices of these things are deter- 

 mined by impersonal forces and can be only slightly modified by a 

 particular buyer. This is especially true of many staple goods. The 

 manager can but look upon the price of these materials as fixed, and 

 seek to combine them as economically as possible into other products. 

 But there are many special patterns and qualities which have no true 

 market-price. By close attention, good judgment, skilful bargain- 

 ing, one man may be able to buy slightly cheaper than his competi- 

 tors, and thus have an advantage over them at the outset. When 

 he does this, it is usually by searching out a better market in which 

 to buy, buying at a better time, and judging better than his com- 

 petitors the quality of the goods. 



Not the least important factor to be bought is labor of every 

 grade. The more successful business men are not found usually pay- 

 ing less than their competitors for the various grades of workers. 

 Success is due rather to utilizing the services so as to make them more 

 effective. 



The factors bought equipment, materials, and labor are to be 

 skilfully and economically combined to secure a product worth more 

 than it cost. Indeed, the very buying of them in certain quantities 

 and of certain qualities implies and requires a decision, more or less 

 exact, as to how they will be used. For the performance of this task 

 of combining the factors a management must have, somewhere in the 

 personnel, adequate technical knowledge of methods, processes, and 

 materials, and experience in the art of applying the knowledge. In 



