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- A superintendent of a road fifty miles in length can give its business his professional attention and may be constantly on the line engaged in the direction of its details; each person is personally known to him, and all questions in relation to its business are at once presented and acted upon; and any system however imperfect may under such circumstances prove comparatively successful.
In the government of a five hundred miles in length a very different state exists. Any system which might be applicable to the business and extent of a short road would be found entirely inadequate to the wants of a long one. and I am fully convinced that in the want of system perfect in its details, properly adapted and vigilantly enforced, lies the true secret of their [the large roads’] failure; and that this disparity of cost per mile in operating long and short roads, is not produced by a difference in length, but is in proportion to the perfection of the system adopted.
- McCallum (1855). cited in: Alfred D. Chandler, Jr. (1962). Strategy and Structure: Chapters in the History of the Industrial Enterprise. p. 21-22
About Daniel C. McCallum
- McCallum quickly moved to install a management system to replace the overloaded manager. He broke his railroad into geographical divisions of manageable size. Each was headed by a superintendent responsible for the operations within his division, Each divisional superintendent was required to submit detailed reports to central headquarters, from where McCallum and his aides coordinated and gave general direction to the operations of the separate divisions. Lines of authority between each superintendent and his subordinates and between each superintendent and headquarters were clearly laid out. In sketching these lines of authority on paper, McCallum created what might have been the first organizational chart for an American business (Chandler 1962). Soon the other great railroads copied the Erie's system, enabling the big railroads to function as effectively as small ones. As a result, railroads rapidly became the largest industrial companies of that time,
- "The cases of Daniel McCallum and Gustavus Swift" in: Rodney Stark (1998) Sociology. p.561
- The "general principles" of management were set out by Daniel C. McCallum. superintendent of the New York and Erie Railroad, in that company's annual report for 1855.
- Craig Heron, Robert H. Storey (1986) On the Job: Confronting the Labour Process in Canada. p. 71
- In the early 1850s, Daniel McCallum, the General Superintendent of the New York and Erie Railroad, had a problem. At the time, the New York and Erie Railway was the largest railroad in the world. It moved trains over one million miles a year and employed hundreds of people - locomotive engineers, conductors, mechanics, station agents and more. For the first time in history it was impossible for a single person to personally manage every one of his employees. The solution was an historic innovation: the middle manager. With it, the first administrative hierarchies in American business were born and the gap between the owner and the entry-level employee inevitably widened. The corporate ladder received its first rungs.
- Sam McNerney "What’s Best For Employees Is Best For Business." bigthink.com. June 26, 2013