Authors:
Historic Era: Era 7: The Emergence of Modern America (1890-1930)
Historic Theme:
Subject:
September 1993 | Volume 44, Issue 5
No Respect
Text Complexity Grade Level
9
If Rodney Dangerfield weren’t a comedian, he’d probably be an executive. They don’t get any respect, either. Alexander Graham Bell invented the telephone and has, naturally, a long entry in the Encyclopedia Britannica and numerous cross-references. But his father-in-law, Gardiner Hubbard - who merely invented AT&T, made Bell, by far, the richest inventor of the 19th century, and gave the country a phone system that has been the envy of the world ever since - goes entirely unmentioned.
Even the government gets into the act. Recently, the Clinton administration proposed that executives be the sole job category in the United States that, in effect, is subject to government wage controls. The plan is to limit the deductibility of executive salaries from corporate income taxes.
Now, certainly, some executives are overpaid, especially when the top management of a company controls the board of directors and the executives thus get to set their own salaries. But there are also overpaid movie stars and sports figures. Somewhere in the world, there is probably an overpaid historian, although I’ve never met one.
But what’s a good executive worth? Well, sometimes he or she has been worth the whole company.
Henry Ford invented the mass-market automobile, and his engineering genius created both a great fortune and one of the world’s largest corporations. But toward the end of his life, his slapdash, highly idiosyncratic, and increasingly paranoiac approach to management went a long way toward wrecking both. Under Henry I, costs were estimated, to the extent they were estimated at all, by weighing piles of invoices. It was Henry Ford II—no genius, just a first-rate executive—who created the modern Ford Motor Company (1992 sales: $100 billion) out of the chaos left by his grandfather.
Or consider Sears, Roebuck: Having given their names to one of the most famous corporations in the world, both Richard Warren Sears and Alvah Curtis Roebuck are immortal. But it was the now nearly forgotten Julius Rosenwald who turned Sears, Roebuck from a shapeless, inefficient, rapidly expanding corporate mess into the retailing titan of much of the twentieth century. Indeed, there is probably nothing wrong with the modern-day Sears, Roebuck, that a modern-day Julius Rosenwald couldn’t fix, if only the company could find one.
Rosenwald was born in Springfield, Illinois, where his father managed a clothing store, in a house only a block away from Lincoln’s, in 1862. Leaving high school after two years, the young Rosenwald eventually moved to Chicago and opened a company that manufactured men’s summer wear in 1885. The company flourished from the start, but ten years later, he sold out to purchase an interest in the even faster growing Sears, Roebuck.
Richard Sears, trained as a railroad telegrapher, had discovered he could sell in 1886, when he was 23. A cash-on-delivery shipment of watches had been refused by a local jeweler in Redwood Falls, Minnesota, where Sears was agent for the Minneapolis and St.