elaboration,
the enterprises concerned would call for technical skill of varied
kinds, and also that the more complex the processes and the machinery
involved, the larger the initial capital investment would have to be.
What is not quite so obvious, but equally true and important, is the
fact that, if ever larger amounts of capital were to be invested, the
degree of prior knowledge of what the possibilities of ultimate success
were likely to be would have to be stepped up. This in turn called for
a much larger initial expenditure and a much more widespread
utilization of scientific procedures. If one aspect of expansion is
characterized by more intensive use of capital equipment, the other
aspect is characterized by the growing significance of the scientific
services such as the geological, metallurgical, engineering, and
mineralogical services, not only in the actual process of production
but in the ascertainment of profit possibilities prior to production.
All this involved organization; all this required the taking of
decisions; all this required the assumption of risk in the expenditure
of funds: where and when, and how much, and on what, and by what instrumentalities!
These are issues which do not settle themselves, and it will be clear
that they become more difficult as the scale of enterprise expands.
They become more difficult in every respect: not only in the
amount of capital involved. Increased demands are made on leadership:
upon leadership in the end everything depends. Just as the extent of
the division of labour depends upon the extent of the market, so the
scale of enterprise depends upon the quality of business leadership:
any attempt to expand the former without the possibility of improving
the latter will surely lead to collapse. One of the great delusions of
economic life is the assumption that the 'big enterprise' succeeds
merely because of its bigness; on the contrary, every increase in
bigness increases the chances of failure unless scale is kept within
the limits of capability. Enterprises are successful not because they
are big, but arc big because they are successful.
This
generalization is true, naturally, of business as a whole, but it
applies with special force to enterprise in 'developing' and
'underdeveloped' countries, partly because of the special hazards of
the environment—political, climatic and hygienic—and partly also
because of the nature of the activities to be carried on there.
The
deductions to be drawn are clear. First, the qualities necessary for
the successful conduct of large-scale enterprises arc likely to be
rare. Secondly, these qualities are of a kind which, nowadays at any
rate, and for some decades past, bear little resemblance to those
stressed
