The History of Management Thought

1. The History of Management Thought MGT336 Michael L. Bejtlich Based on The History of Management Thought, 5th edition, 2005by Daniel A. Wren

2. Chapter Eleven Scientific Management in Theory & Practice

3. Scientific Management in Theory & Practice • Impact of scientific management on management education • Impact of scientific management on international management and other disciplines • The spread of management ideas moved beyond the factory leading to the emergency of general management

4. Education for Industrial Management • Early in the 20th Century, the teaching of management in colleges focused on production management based on Taylor’s writings. • Daniel Nelson’s observed that scientific management gave credibility to the study of business. • Business schools at the time were considered too vocational.

5. Early Management Educators • M. Clarence Bertrand Thompson(1882-1969): • Taught management at Harvard from 1908-1917. • Compiled the most extensive management bibliography of the period. • Furthered the scientific management movement in academia, industry, and abroad as a consultant. M. Clarence Bertrand Thompson

6. Early Management Educators • Harlow S. Person (1875-1955) created management course at Dartmouth, expanded the Taylor Society, and recognized the importance of social scientists. • Leon Pratt Alford (1877-1942) pioneered the concept of management handbooks, influenced journals through his work and books, and emulated Gantt’s call for service to the community.

7. The International Scientific Management Movement • The “management revolution” spread abroad as a product of the United States. • In France, industrialists tended to implement scientific management to increase productivity without following Taylor’s advice. • Taylorisme became a dirty word for French workers. • Charles de Freminville with Le Chatelier formed the Conference de l’Organisation Francaise in 1920 to advance management in France. • Hans Renold instituted scientific management in his British firm but the movement was largely rejected in Great Britain.

8. The International Scientific Management Movement • Henri Fayol formed the Center for Administrative Studies in France in 1917. • He declared his work complemented Taylor’s. • First CIOS meeting held in Prague in 1924. • The Twentieth Century Fund and the IMI worked to promote management in Europe. • In Poland, Adamiecki’s “harmonogram” was similar to PERT. Henri Fayol

9. The International Scientific Management Movement • In the USSR (the Soviet Union at the time): • Lenin advocated Taylorism after 1917, but little came of this in practice. • Lenin thought scientific management would assist the socialist revolution; others distrusted capitalistic ideas. • Higher productivity through competition was accepted, not better job analysis and work methods. • Walter Polakov was successful in getting the USSR to use Gantt Charts for their five year plans.

10. Scientific Management Internationally • In Japan, Taylor’s ideas gained widespread acceptance after their translation appeared in 1912. • The Japanese liked the idea of harmony, cooperation, and mutual interest. • What modern scholars call Japanese style management had its roots in the work of Taylor. Yoichi Ueno was a leading teacher, author, and consultant. The above picture was taken with Harrington Emerson in Japan in 1925.

11. Scientific Management in Industrial Practice • Model scientific management installations: • Plimpton Press – Henry P. Kendall; 186% reduction in labor turnover • Link-Belt – James Mapes Dodge • Clothcraft – Richard Feiss and Mary B. Gilson; combined Taylor’s ideas with personnel work • Tabor Manufacturing – Horace King Hathaway; 250% output increase • Scientific Management was recognized for reducing costly labor turnover.

12. Scientific Management in Industrial Practice • The Hoxie Study highlighted the difference between the notions of scientific management and how well they were implemented. • The Hoxie Study was viewed as biased toward labor and conducted in a superficial manner. • Other studies by C.B. Thompson and Daniel Nelson reinforce this uneven application of scientific management. • Nelson concluded that scientific management had a “strong positive correlation” with industrial efficiency. In addition, scientific management was “associated with growth not stagnation” in most industries.

13. Industrial Practice • Data refutes the belief that scientific management led to a de-skilling of workers. • Skilled and semi-skilled workers increased from 1900 to 1920. • Scientific management was associated with batch shop production and labor intensive operations. • In capital intensive industries, or automobile assembly lines, it was less useful. Assembly line at Ford 1924, courtesy of Library of Congress, Prints and Photographs Division, Detroit Publishing Company Collection

14. Emerging General Management • Scientific Management dominated the late 19th and early 20th centuries. • But, in the early 20th century, indications of a broader concept of management developed. • Other disciplines began to search for efficiency through science: • Public administration • Marketing • Accounting • AMA founded in 1923

15. Early Organizational Theory • Russell Robb (1864-1927): 1909 lectures at HBS • Attempted a compromise between the old military style of management and the new conditions of industry. • He felt that organizations differed as to goals sought as well as means to those goals. • Because of organizational differences, there was no one best way to organize. • He looked beyond scientific management to see the organization as a whole system.

16. Scientific Management at DuPont and General Motors • DuPont Powder Co. and General Motors led innovative organizational development. • DuPont • Psychological tests for personnel selection • Donaldson Brown and Return on Investment (ROI) as R = T X P • Separated line and staff Pierre DuPont

17. William C. Durant William C. Durant From Pierre S. DuPont and the Making of the Modern Corporation by Alfred D. Chandler. Harper & Row 1971.

18. Alfred P. Sloan, Jr.(1875-966) • Led General Motors from 1923 to 1956. • Created centralized policy, control, and review. • Decentralized administration and operations. • Enabled decentralized parts to work for a common goal. Source: http://www.amazon.com

19. DuPont and General Motors • Both used multidivisional structures organized around product divisions. • These divisions could were decentralized for operations and performance could be measured by ROI. • Origins of the “M-Form” Organization – allowed growth without the encumbrance of a functional organization structure.

20. Business Policy and Philosophy • The idea of collegiate schools of business spread. • By 1925, 38 schools belonged to the ACSB (today’s AACSB). • Arch W. Shaw taught a policy course at Harvard in 1912 based on cases. It integrated business subjects. • Alexander H. Church (1866-1936) broadened Taylor’s concepts to include policy and implementation. • Oliver Sheldon (1894-1951) sought to combine the efficiency with the ethics of service.

21. Summary • Scientific Management was a force in: • the formal study of management • the practice of management in the US, Great Britain, Europe, Japan, and the USSR. • broadening the scope of management • the study of organizations • the development of business policy and the philosophy of management.

22. Chapter Twelve Scientific Management in Retrospect

23. Scientific Management in Retrospect • The Economic Environment • Technology • The Social Environment • The Political Environment

24. The Economic Environment • The United States was in transition from an agrarian to an industrial nation. In this period of growth, scientific management provided a means whereby a better utilization of resources could occur. • The U.S. worker prospered, both in real wages and reduced hours of work. • More employees were in management with the addition of staff specialists. This growth in managerial hierarchy made it more critical to plan, organize, etc.

25. The Economic Environment • Alfred Chandler’s rationalization of resource utilization describes the needs of industry during this era. The ideas of the scientific management pioneers fit these needs. • Industrial efficiency was increasing, partially due to scientific management. Alfred D. Chandler Courtesy of Harvard Business School

26. The Economic Environment • America was uniquely diverse 1890-1920: • Immigrants were 80% of New York’s population. • More Irish lived in the US than in Ireland. • 71% of Ford’s labor force was foreign born. • Developing systems and procedures and standardization was more important with the heterogeneous workforce. • Productivity increased due to: • Methods of mass production. • Taylorism (Scientific Management) • Cheaper sources of power

27. Technology: Opening New Horizons • Enterprises developed and grew – 247 of the Fortune 500 were founded from 1880-1929. • New technologies developed: • Bessemer process in steel • Oil refining • Internal combustion engine • Synthetic material • Telephony • Electric energy

28. Technology: Opening New Horizons • The automobile changed people’s lives and created a new industry. • Henry Ford, Charles Sorenson and their associates at Ford created the moving assembly line for mass production. • 1910 – 2,773 workers produced 18,664 cars • 1914 – 12,880 workers produced 248,307 cars Henry Ford

29. The Social Environment

30. The Social Environment • Horatio Alger, Jr. characterized the “success” ethic of U.S. enterprise. • Scientific management ideas were consonant with the social values of self-directing, high need for achievement, individuals • Change came as the Western frontier closed; William G. Scott called this the Collision Effect, which would lead to a transition period of individualism being replaced by a social ethic. • Taylor’s “cooperation, not individualism” bridged the gap between the social and individualistic ethics.

31. The Social Environment • The Social Gospel shaped personnel management acting as a counterpoint to social Darwinism and precursor to progressivism. • Followers of the Social Gospel, like Robert G. Valentine, thought unions were instruments of social and economic reform. • A reciprocal work-welfare equation linked the progressives and scientific management. • Efficiency was also advocated by conservationists, feminists, and religious leaders.

32. The Political Environment • The political articulation of the Social Gospel was the Populist-Progressive Movement. • Scientific management appealed to the Progressives, especially Morris Cooke. • Scientific management offered leadership by expertise and knowledge, not class, so it appealed to moderate Progressives like Louis Brandeis, Herbert Croly, and Walter Lippman.

33. The Political Environment • An increasing regulation of business under Theodore Roosevelt after 1901 overcame the inadequacies of the earlier Sherman Act. • Tax rate comparison – Underwood-Simmons Tariff Act of 1913. • 1% on personal incomes over $3,000 • Surtax added progressively on incomes up to $20,000 • Maximum tax rate of 7% on incomes in excess of $500,000 (compared to 35% today) Theodore Roosevelt, courtesy of the Constitution Society

35. Summary of Part Two • Taylor was the focus for a deeper philosophy of managing human and physical resources in a more technologically advanced world. • Taylor’s disciples improved productivity and service to society. • Fayol and Weber, Taylor’s contemporaries, also reflected a rational approach to enterprise. • Taylor and his followers were affected by and did affect the times.

36. Part Two Internet Resources • Academy of Management – Management History Division Websitehttp://www.aomhistory.baker.edu/departments/leadership/mgthistory/links.html • List of Internet Resources compiled by Charles Booth http://www.jiscmail.ac.uk/files/MANAGEMENT-HISTORY/links.htm • Western Libraries Business Library – Biographies of Gurus http://www.lib.uwo.ca/business/gurus.html • Scientific Management Demonstration Video http://www.archive.org/movies/index.html • Frederick Winslow Taylorhttp://www.accel-team.com/scientific/scientific_02.html • Fascinating Facts about Frederick Winslow Taylor http://www.ideafinder.com/history/inventors/taylor.htm • The Principles of Scientific Management, Taylor (1911) http://melbecon.unimelb.edu.au/het/taylor/sciman.htm • Who Made America – Frederick Winslow Taylor http://www.pbs.org/wgbh/theymadeamerica/whomade/taylor_lo.html • Films of Westinghouse Works – 1904 http://memory.loc.gov/ammem/papr/west/westhome.html

37. Part Two Internet Resources • Franklin D. Roosevelt Presidential Library and Museum (contains papers of Morris L. Cooke) http://www.fdrlibrary.marist.edu/ • Henry Gantt http://www.accel-team.com/scientific/scientific_04.html • Frank and Lillian Gilbrethhttp://www.accel-team.com/scientific/scientific_03.html • The Gilbreth Network http://gilbrethnetwork.tripod.com/front.html • Harrington Emerson Papers http://www.libraries.psu.edu/speccolls/FindingAids/emerson.html • Wilhelm Wundt http://www.indiana.edu/~intell/wundt.shtml • The Durkheim Pages http://www.relst.uiuc.edu/durkheim/

38. Part Two Internet Resources • The Samuel Gompers Papers http://www.history.umd.edu/Gompers/index.html • Max Weberhttp://www.faculty.rsu.edu/~felwell/Theorists/Weber/Whome.htm • William Duranthttp://www.flint.lib.mi.us/timeline/autohistory_0798/durantW.html • The Alfred P. Sloan Foundation http://www.sloan.org/ • The Alfred P. Sloan Museum http://www.sloanmuseum.com/ • The Henry Ford Museum http://www.hfmgv.org/ • The Henry Ford Estate http://www.henryfordestate.com/ • The Theodore Roosevelt Association http://www.theodoreroosevelt.org/

39. End of Part Two