these
particular departments had been accompanied by an immediate loss in
profits. Furthermore, the manager was unable to determine, from figures
available before and after the change, that this loss had been directly
compensated by gains in other departments. In order to get his
viewpoint concerning the change at issue, I asked him two questions:
(1) Why was he willing to make a change of such a fundamental character
without being able to ascertain in advance whether or not it would be
profitable? (2) In the absence of facts that could be incorporated in
the accounts, was it his belief that the change would in time be
profitable, and if so, how did he reach his conclusion?

His response to the first question revealed to me an intensely natural
but nevertheless complex motive. He said, substantially, that he was
confident that standardized employment was the only acceptable policy,
from the standpoint of the general manager. Given the necessity of
standardizing, it was necessary for the general reputation of the
business to standardize upward rather than downward. He wanted his
business to be regarded as one in which the best standards of
employments obtained. Furthermore, he added, "California will soon have
a minimum wage law, and I want this business to be well in advance of
any wage standards which may be imposed by law."

Answering the second question more specifically, the manager recognized
the advertising value of a reputation for having good conditions of
employment. He had discovered no tendency for general profits to
diminish or for the rate of increase to be retarded more than
temporarily. In the absence of definite facts to the contrary he
considered it safe to assume that as soon as the business should become
adjusted to the new standards, standardization of wages upward would be
profitable for the business as a whole. He wanted to make the change
voluntarily and to commence operating successfully on the new basis in
advance of competitors.

It is scarcely possible to discuss this sort of business situation with
a progressive manager, without feeling that he does not approach
business exclusively from the standpoint of gain; in other words, to
use the phrase of Adam Smith, he is not exclusively an "economic man."
The manager of a modern business, on the contrary, is a man very much
like the rest of us, and being such a man he is first of all desirous
of conforming to whatever standards are in way of acc