Ernest Dale

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Ernest Dale (Febr. 4, 1917 - Aug. 16, 1996) was a German-born American organizational theorist, Professor in Business Administration at Columbia University and the Wharton School of the University of Pennsylvania, and consultant, known for his early work on comparative management theory in the 1960s. He was board member with Olivetti, Upjohn and Renault, and consulted companies such as Du Pont, I.B.M. and Unilever.


  • Management policies and the quality of leadership have a lot to do with individual performance.
    • Ernest Dale, The great organizers. McGraw-Hill, 1960. p. 11

Planning and developing the company organization structure. 1952


Ernest Dale, Planning and developing the company organization structure. No. 20. American Management Association, 1952.

  • The application of systematic methods to the conduct of business is one of the most striking developments of the present day. The successful pursuit of business activities is increasingly based on carefully developed plans and well-ordered arrangements. The body of knowledge, called Organization, has become increasingly helpful in accomplishing the objectives of the enterprise.
  • This book is an analysis of the development and change of the organization structure of the individual company. It is an attempt to combine the systematic thinking on this subject with the "rule of thumb" of practical experience. It essays an integration of the formal structure of the enterprise with the human forces that mold and are molded by it. Thus it is designed to aid the practical man of affairs as well as the student of organization.
The study is confined largely to the organization of manufacturing companies, with some reference to retail and service activities. Limitations of space and time have made impossible a detailed discussion of such related and important topics as planning company activities, establishing policies, procedures, and controls. Each of these subjects merits a study of its own.
The main body of the report is divided into two parts: Part I deals with the dynamics of organization. This is an analysis of the major organizational problems as they arise at various stages of a company's growth. Part II deals with the mechanics of organization. It offers detailed guidance for analyzing the existing structure and modifying or changing it, in the light of the best established practices, to conform to the needs of the individual company.
  • In this study, the primary aim has been to provide a perspective on organization development which would combine basic truths with practical realities. The answers had to be drawn, in the first place, from the wisdom of the great authorities of the past. These were the pioneers in scientific management and their followers, and the economists who evolved the principles of profit maximization.
    • p. 7; Acknowledgments
  • Organization planning is the process of defining and grouping the activities of the enterprise so that they may be most logically assigned and effectively executed. It is concerned with the establishment of relationships among the units so as to further the objectives of the enterprise.
    • p. 14
  • The following basic characteristics of organization should be kept in mind in any discussion of organization planning:
  1. Organization is a planning process. It is concerned with setting up, developing and maintaining a structure or pattern of working relationships of the people within an enterprise. It is carried on continuously as changes in events, personalities and environment require. Thus organization is dynamic. However, the resulting structure is static— i.e., it reflects the organization only as of a given moment of time.
  2. Organization is the determination and assignment of duties to people so as to obtain the advantages of fixing responsibility and specialization through subdivision of work.
  3. Organization is a plan for integrating or coordinating most effectively the activities of each part of the enterprise so that proper relationships are established and maintained among the different work units and so that the total effort of all people in the enterprise will help accomplish its objectives.
  4. Organization is a means to an end. Good organization should be one of the tools of accomplishing the company's objectives, but it should not become an objective in itself.
The Importance of Organization Organization has been in existence ever since the first group of men banded together to hunt, to build and to fight.
  • p. 14
  • I find myself just a little annoyed at the tendency of all of us to adopt certain clichés about decentralization and then glibly announce that we're for it. I have been somewhat amused at some of my colleagues who are most vocal in expounding the virtues of decentralization and yet quite unconsciously are apt to be busily engaged in developing their own personal control over activities for which they are responsible.
    • p. 18
Part I The Dynamics of Organization
  • The major problems of organization can perhaps best be studied in dynamic terms, i.e., as they arise and change with the evolution of the company. In this dynamic setting the causes and nature of organization problems can be recognized most easily. Each major problem can be analyzed at the stage of the company's growth when it typically arises, when there are few complications and the organizational problem is centered about just one factor or change in the company's mode of operation. Just as it is easier to study the workings of democracy as they arise in one of the small towns of New England rather than in the United States as a whole, so it appears to be desirable, in dealing with a subject of such scope as organization, to isolate and study the major problems individually.
    • p. 21
  • Organization studies usually are devoted to the study of large-scale enterprise because information about larger companies is generally more widely recorded and more readily available. Because of this, more emphasis needs to be placed on organization planning in the smaller firms. It was at the suggestion of Lt. Colonel Lyndall Urwick that AMA undertook this study of companies of different sizes, as a means of improving our knowledge of organization—a field in which he has made major contributions. Many of the larger companies face small-scale problems in their subsidiaries and small units. However, those starting work in the large firm find it difficult to visualize the evolutionary process on which their company's present operation is based. Therefore, it may be of interest even for large companies to study the various stages of growth, up to and including, of course, their own present stage of development.
    • p. 21
  1. Centralized programming. Top mangement establishes overall goals for production, in consultation with the various divisions, in order to maintain logical relationships to sales, inventories carried and purchase commitments, and return on investment. Performance standards are set for each division. Each must fit into the general plan and operate in accordance with the dictates of four basic economic factors — long-term growth, business cycle variations, seasonal fluctuations and competition. Long-range goals are planned centrally in consultation with the divisions. The aim is to eliminate uncertainty.
  2. Authority limitations are imposed on divisional managers with regard to such basic decisions as the following: capital expenditure, price ranges of products, salary changes above a certain level, bonuses, union contracts.
  3. Provision of services through the general staff at headquarters regarding new methods, techniques, future, policies, uniform practices — all on an advisory basis (that - is, division managers are free to decide whether or not to take the through personal contacts, meetings, bulletins, periodic corporation-wide conferences.
  4. Accounting control through (a) a central auditing staff (b) measurement of cost efforts of the various divisions on a comparable basis, eliminating extraneous factors as far as possible; (c) measurement and comparison of the rate of of return on invested capital: and (d) market standing through study division's sales as a percentage of the market.
Each division has a Comptroller et the head of its financial department, who, besides being responsible to the General Manager, also reports to the Comptroller of the Corporation.He sends in a monthly balance sheet and income statement on a standard form. Each division has an accounting department which sends monthly reports to the Central Office.
  • p. 106
  • In and of itself managerial decentralization is neither desirable nor undesirable. We must apply certain criteria in order to evaluate it. One such criterion is economic efficiency: At what point in the management hierarchy and by what individual is a particular decision made most efficiently? Is a particular function exercised or a service performed more cheaply if it is "centralized" or "decentralized"? It is impossible to say in general that either centralization or decentralization is more efficient.
    • p. 109
Part II The Mechanics of Organization
  • This section will deal with the mechanics of organization—the actual processes or methods of creating and changing the company's organization structure. The problem is essentially that of best utilizing the people and resources presently on hand, as contrasted with the building up of an organization from scratch, described in Part I.
    • p. 123
  • In some cases the changes may represent just one part of a general improvement program. Such steps as the following, for example, will generally affect the organization structure:
  • Establishment of authority limitations Establishment of salary ranges
  • Drawing up of a personnel inventory (list of executives, showing their abilities and skills, ages, experience, data on possible promotions) and establishment of an executive replacement policy
  • Establishment of a program of executive development
Then there are other aspects of general improvement which may affect the organization structure (though not necessarily):
  • Analysis, improvement and formalization of company policies (possible impact on upper organization levels)
  • Establishment and improvement of company procedures (possible impact on lower organization levels)
  • Establishment of controls (may affect basic organization structure, as at Koppers)
  • Changes in long-range plans or forecasts (may affect basic structure)
  • Introduction of management and organization audits (may reveal organization deficiencies)
  • Development of a uniform approach to improvement planning (may necessitate organization planning)
The changes and improvements in the organization structure itself may involve anything from a complete overhaul of the entire company to adjustments of only a single series of functions or a single function or position.
    • p. 123
  • The functions or job contents necessary to reach objectives must be defined. This step is governed by two precepts.
(1) Define duties clearly.
(2) The work of each man in the management should be confined to the performance of a single leading function.
  • p. 141
Content of Major Management Functions
  • A list of major management functions and their contents may be helpful in reorganization and in preparation of job descriptions, organization manuals, and charts. The major management functions, analyzed in this Appendix on the basis of a number of manuals, job descriptions, and interviews, are as follows:
Research and Engineering
Law s
Public Relations u-
Office Management
Plant Management
Coordination Requirements for the Production and Sales Departments
Most of these functions are described in condensed form for a number of companies in general, as well as specifically for a large and a medium-sized firm. The large company is engaged in manufacturing. It has more than 20,000 employees and operates 20 plants with an annual sales volume of over $200 million. The medium-sized firm is the Line Material Company of Milwaukee, Wisconsin. At the time of analysis it had about 3,000 employees and nine manufacturing plants.
  • p. 195

Management: theory and practice, 1965


Ernest Dale, Management: theory and practice. McGraw-Hill, 1965; 1969.

  • An organization that is based on pure rationality ignores many facets of human nature.
    • p. 284
  • The administrative unit that usually covers the company as a whole as well as all Its plants is broken Into smaller administrative units — often on a geographical or product basis. Each is headed by a manager who may be compared to the head of a smaller enterprise. Usually he has fairly complete control over basic line functions; if he also has staff services, such as accounting, engineering, research, and personnel. the unit may be largely self- contained.
    • p. 343; Quote earlier present in: Heine Johan Kruisinga (1956) The Balance Between Centralization and Decentralization in Managerial Control. p. 35
  • Centralized controls are designed to ensure that the chief executive can find out how well the delegated authority and responsibility are being exercised.
    • p. 343
  • Provision is made for utilization of a centralized staff of specialists to aid the decentralized operations.
    • p. 343
  • Every manager, up to the president of the company, must handle some phases of staffing, even though personnel may provide at least technical help in every case... Again, the personnel department seldom makes the final decision on selection, except in cases where large numbers of people must be hired at one time and the line managers would not have the time to interview them all. More commonly, even in the case of rank-and-file employees, it merely screens the applicants and picks out a few whom it considers the most promising. Then the immediate supervisors make a choice among these few.
    • p. 410
  • The extent to which personnel handles recruitment varies among companies, but in almost all large ones it will recruit all candidates for rank-and-file jobs, plant, or office, and for some of the lower and middle management jobs as well. As one goes up the line, the line managers are likely to take on more of the recruitment task.
    • p. 401

Quotes about Ernest Dale

  • The scientific study of leadership in complex organizations, as an area of enquiry in its own right, is relatively new; hardly more than a decade old. As in any new "science" there is yet no comprehensive framework within which to operate. Unlike medical men after Harvey's great discovery on the circular system of the human body, we have no unifying concepts around which to make further refinements and discoveries.
Ernest Dale modestly recognizes this fact. In The Great Organizers he takes the position that before we proceed too far in theory it is first necessary to known the history and the terrain of the subject. His vehicle is the case history in depth; his method is the comparative historical approach, not deduction based on a comprehensive model.
  • Robert H. Guest. "Reviewed Work: The Great Organizers by Ernest Dale," Technology and Culture, Vol. 3, No. 3 (Summer, 1962), pp. 349-351
  • Empirical School ; A second approach to management I refer to as the "empirical" school. In this, I include those scholars who identify management as a study of experience, sometimes with intent to draw generalizations but usually merely as a means of teaching experience and transferring it to the practitioner or student. Typical of this school are those who see management or "policy" as the study and analysis of cases and those with such approaches as Ernest Dale's "comparative approach."
This approach seems to be based upon the premise that, if we study the experience of successful managers, or the mistakes made in management, or if we attempt to solve management problems, we will somehow understand and learn to apply the most effective kinds of management techniques. This approach, as often applied, assumes that, by finding out what worked or did not work in individual circumstances, the student or the practitioner will be able to do the same in comparable situations.
  • Harold Koontz, "The Management Theory Jungle," Journal of the Academy of Management, 4 (December 1961), p. 177
  • 23rd Academy President Ernest Dale, 79, a consultant to top executives of some of the world's largest corporations, emeritus professor at the University of Pennsylvania's Wharton School of Finance & Commerce and 23rd President of the Academy of Management (1968), passed away.
    • "In memoriam: Ernest Dale (1917-1996). The Academy of Management News. Vol. 25-32 (1994), p. 55