FALSE PROPHETS - JAMES HOOPES

1. FALSE PROPHETS -JAMES HOOPES A book review by T.S.Ananth FT MBA 2006-08 SUMANTRA – THE BOOK CLUB

2. The Title • False – Fake, bogus, sham, counterfeit, insincere • Prophet – Forecaster, psychic, diviner, spiritualist, parapsychologist SUMANTRA – THE BOOK CLUB

3. About the Author • James Hoopes is Distinguished • Professor of History at Babson College. He has written half a dozen other books on American history and has received grants from the Guggenheim Foundation, the Alfred P. Sloan Foundation, the National Endowment for the Humanities, and other funding agencies. SUMANTRA – THE BOOK CLUB

4. His paper, "Managing a Riot," won the Paul Hersey Award for the best paper on leadership at the 2000 meeting of the Academy of Management. PhoneE-mail Address781-239-4345 hoopes@babson.eduAcademic Division Babson College History and Society EducationB.A., Bowling Green State UniversityM.A., University of Wisconsin M.A., Ph.D., Johns Hopkins University ExpertiseHistory, Business History SUMANTRA – THE BOOK CLUB

5. The First Managers • The first managers were overseers in the cotton fields in America. • “In a free market self interest does God’s work of maximizing the good of all” – Adam Smith • Samuel Johnson – “How is it that we hear the loudest yelps for liberty among the drivers of Negroes. • No Negro will be faithful who has his absolute wants satisfied … I mean food and clothing SUMANTRA – THE BOOK CLUB

6. Frederick W. Taylor (1856-1915) • Born into a devout Quaker family earned an engineering degree at Stevens Institute of Technology, New Jersey while holding a full time job. • Chose to work as a machinist and pattern worker. • Goal was to find the most efficient way to perform specific studies. • Created the now popular system of incentives pay. • First applied his theories at the Midvale Steel Company. SUMANTRA – THE BOOK CLUB

7. Later joined the Bethlehem Steel Company where • he was given a free hand. • Created and patented “high –speed steel” and proceed • to sell the same while still consulting with Bethlehem. • Never worked afterwards, but delivered lectures at his • mansion. • Compilations from his teachings at his residence were • published as “The Principles of Scientific Management.” • “Taylorism” was inducted into the Harvard Business School • (HBS) curriculum when it opened in 1908. • Taylorism violated the democratic principle that power is not • to be trusted. • His principles were carried forward by Henry Gantt and Frank • and Lillian Gilbreth who consulted more than 100 companies. SUMANTRA – THE BOOK CLUB

8. Henry Gantt (1861 – 1919) • Born in 1861 in Maryland, Gantt led an active life as an industrial engineer and consultant. • He developed the Gantt chart was a revolutionary development and was based on time rather than quantity, volume or weight. • Henry Gantt recognized the importance of motivation in the work place and focused on reward systems, where he would reinforce good work instead of penalizing poor work. SUMANTRA – THE BOOK CLUB

9. A pioneer for this management approach, Gantt initiated a new way of relating to workers and emphasized good leadership on the part of management. Gantt recognized the importance of treating the employee well, and instituted minimum wages and pay incentives for his employees. Henry Gantts contribution to the management process is honored today through the The Henry Laurence Gantt Medal. Established in 1929, the award is given for distinguished achievement in management and for service to the community. SUMANTRA – THE BOOK CLUB

10. Frank and Lillian Gilbreth • Frank was interested in standardization and method study. • Studied the bricklaying method and improved output from 1000 to 2700 bricks a day. • They developed the laws of human motion from which evolved their principles of motion economy. • Coined their kind of study “motion study” to distinguish it from “time study”. SUMANTRA – THE BOOK CLUB

11. Used cameras for their motion studies and used micro-motion study to record and examine detailed short-cycled movements. Carried their work to extremes and lived their treatise “Cheaper by the dozen” with a family of twelve. This later formed the basis for a Hollywood film that bears the same name. Both the Gilbreths were lecturers at Purdue University. SUMANTRA – THE BOOK CLUB

12. Mary Parker Follett (1868-1933) • Mary Parker’s ideas were the first to influence organizational work. • Believed that her brother did not scale great heights, because of his “ascendancy traits”. • Understanding the inevitability of power analyzed its limitations and the reasons those who lead must also follow. • The corporation can unite people spiritually more than one can do alone. • Insights of corporate culture, values, shared visions, and the like as ways to unite employees under a common cause. • Her books “The New State” and “Speaker of the House of Representatives” are still considered minor classics. SUMANTRA – THE BOOK CLUB

13. She started the concept of community centers and • her efforts got her an appointment on the • Massachusetts Minimum Wage Board. • Mary was not get any political mileage but was very popular • among businessmen, some of whom adopted her teachings. • Mary also delivered a series of inaugural lectures in 1932 • when the London School of Economics opened a • Department of Business Administration. • “To achieve peace, sovereignty must be joined, not sacrificed. • “One of the tragedies of history is that Woodrow Wilson • did not understand leadership”. SUMANTRA – THE BOOK CLUB

14. Elton Mayo (1880 –1949) • Twenty three year old who had three failed attempts at medical education at University of Adelaide, Edinburgh and St. George’s Hospital, London stayed with his sister. • Gratis job teaching English to working class students • Studied under the Professor of Moral Philosophy. • Australia’s first practicing psychoanalyst. • Wrote “Democracy and Freedom” in 1919 stated that politicians used the neurotic fears of the electorate to get themselves elected. SUMANTRA – THE BOOK CLUB

15. Monopoly can hardly fail to realize if intelligently handled that social service was its chief duty. • Elton Mayo got national acclaim for his work on the “Hawthorne Studies”. • His ambition was to substitute therapy for democracy as the way to save civilization from social disorder. • He died of a stroke on September 1, 1949. • His work was furthered by his mentor Fritz Roethlisberger who moved away from his shadow and worked to include human relations in the Administrative Practices course taught in the 1950’s to MBAs SUMANTRA – THE BOOK CLUB

16. He eventually created a new area of study within the doctoral program and named it Organizational Behavior to indicated his empirical amoral concern with the way people do – and should not – in organizations, and thus built an institutional base that enables human relations and therapeutic management to outlive Mayo. • The concept of willing, bottom-up cooperation meshed well with the consciences of democratic American managers. • “If our social skills had advanced step by step with our technical skills, there would not have been another European war.” SUMANTRA – THE BOOK CLUB

17. Chester Barnard • Chester Barnard created a new theory around organizational structures, focusing on the organization as a communication system. • He was accepted to Harvard on “conditions” due to his poor performance in Geometry and Chemistry. He eventually had enough credits to pass out of Harvard but had still not completed the “conditions”. • He started his career as a telecom executive with AT&T and went on to become President of New Jersey Bell. SUMANTRA – THE BOOK CLUB

18. Helped AT&T raise capital by getting employees to sell stock friends and relatives saving cost of investment bankers. • He was a very cautious manager. • A pioneer in the concept that the manager has a moral right to manage subordinates. • He believed that the main role of a Chief Executive was to manage value of the organization. • He also held the presidency of the Rockefeller Foundation shortly after New Jersey Bell. SUMANTRA – THE BOOK CLUB

19. W. Edwards Deming (1900-1993) • Management of outcomes may not be any more than a skill. It does not require knowledge. • Deming is better known as the father of quality and as the man who taught quality to the Japanese. • One of the people who created the “American War Standards on Quality Control.” • The Deming prize is awarded each year in Japan to a statistician for contributions to statistical theory. • He proved that mathematically challenged workers could also use statistics. SUMANTRA – THE BOOK CLUB

20. Deming taught SQC to the Japanese as a principle of social order around which they could unite. • “The theory of a system, cooperation.” • Eventually taught at the New York University. • He underestimated the inevitability of top-down power and overestimated the possibility of democratizing management. • Helped Ford compete with GM and cross them in profitability with the Taurus. • Founded an institution in his name to foster understanding of the “Deming System of Profound Knowledge. SUMANTRA – THE BOOK CLUB

21. Peter Drucker (1909 – Current) • Peter Drucker lived and worked as an economist in London until 1937 when he moved to the US. • He has written over 35 books. • He is considered to be the founding father of management. • “Die Judenfrage in Deutschland”, all copies destroyed by the Nazis. • Was on the Board of Economic Welfare during World War II • Did not want to be a “cog in the machine” and left. • Was part of the team that reorganized GM under the able leadership of Alfred Sloan. SUMANTRA – THE BOOK CLUB

22. Was disappointed that GM managers were not interested in the company’s place in society. • Shadowed Sloan for 2 years from 1943-1945. • Sloan was however more concerned with the bottomline and Drucker wanted to make management power morally legitimate. • Drucker’s idea of a manager as a social leader influenced Henry Ford II who made “Concept of Corporation” a must read in Ford. • He believed that Mayo’s psychological manipulation was a disguised form of top-down management. • Advocated “Management by Objectives”. SUMANTRA – THE BOOK CLUB

23. He went on to influence Ralph Cordiner and then Jack Welch at GE “If you were not already in the business, would you enter it today?” • Strongly advocated corporate social responsibility. • After the Nissan strike helped in created the system of lifetime employment of the Japanese in Japan. • Recognized the “knowledge worker”. • Stays on the question of moral legitimacy and his idea of managing by objectives and evaluating performance and not personalities. SUMANTRA – THE BOOK CLUB

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25. www.follettfoundation.org www.gilbrethnetwork.tripod.com http://www.fordham.edu/halsall/mod/1911taylor.html http://www.people.vcu.edu/~mlwillia/8_31_00/sld002.htm www.online.uis.com www.towson.edu www.onepine.info www.deming.org http://www.peter-drucker.com SUMANTRA – THE BOOK CLUB