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Founding Fathers of Management
by H.N. Bali Bookmark and Share
 

Continued from “Managers Galore, Management Lackadaisical – I”

Managers Galore – Part II

The great French playwright Molière, considered to be one of the greatest masters of comedy in Western literature, was once questioned by a layman admirer about literature. To make things as plain and simple as possible, he began by saying: “Well, literature can be divided in two parts; poetry and prose.”

“Poetry, I understand. But what’s this prose?” Asked his interlocutor.

Well, prose is what, for instance, you speak every day,” said Molière

So, it means I know half the literature,” remarked the curious layman.

And this is very much true in case of management too. Whatever it may mean and whatever may be its present-day tools and techniques, and the finer nuances thereof, we have been always practicing it wittingly or unwittingly, and day after day.

Frederick Taylor

The person who laid the foundation of what we today call management in its present incarnation, was Frederick W. Taylor. He was a mechanical engineer who sought, for the first time, to improve industrial efficiency in right earnest. In Peter Drucker’s description, “He was the first man in recorded history who deemed work deserving of systematic observation and study. “On his contribution to ‘scientific management’ rests, above all, the tremendous surge of affluence in the last seventy-five years which has lifted the working masses in the developed countries well above any level recorded ever before in history Taylor can truly be regarded as the Isaac Newton (or perhaps the Archimedes) of work. Not much has been added to the fundamentals of work study after him.

Taylor’s scientific management consisted of four principles:

  1.  Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.

  2.  Scientifically select, train, and develop each employee rather than passively leaving them to train themselves.

  3. Provide “Detailed instruction and supervision of each worker in the performance of that worker's discrete task”

  4. Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.

Eastern Rate Case

To the good luck of industrial world, the man and the moment met in 1910 in what’s popularly known in management thought as the ‘Eastern Rate Case’.

In that year Eastern Rail Road Company of America submitted an application to the Interstate Commerce Commission of America seeking permission for increasing freight rates of the vessels that it operated. The Interstate Commerce Commission of America is an institution similar to the Public Utilities Commission operative in several other countries that deals with appeals for rate hikes from governmental and nongovernmental utilities industry.

The proposed rate hike of Eastern Rail Road Company, thought many at that time, would inevitably invite a chain of price increases in many industrial inputs as well as consumer goods which finally could adversely affect the general public. Louis D. Brandeis, the famous American lawyer who was known as the “people’s lawyer”, appeared against the move of the rate increase and filed a case against Eastern Rail Road Company on behalf of the general public. (Brandeis, you may recall, became a distinguished judge of the American Supreme Court.)

Brandeis argued that Eastern Rail Road Company was seeking rate hike as it had failed in management which is a sole responsibility of the company but not of the general public. He maintained that management failure has caused inefficiencies and as a result, the cost of operations has increased. It was, thus, unfair to grant permission for the company to increase rates. He connected the rate issue to management failure and implied that the cost of management failure need not be borne by the general public who are not responsible for the management of the company.

He was asked to propose a cure for the management ailment that he claimed that the Eastern Rail Road was suffering from. Brandeis recommended ‘Scientific Management (the term he coined after the ‘Shop System’ of Taylor) as the new management system for the Eastern Rail Road to adopt, through which the company could overcome its inefficiencies which had compelled it to seek rate increase.

The jury summoned Taylor, as the founder of the new management system, to substantiate the lawyer’s claim. Taylor, in his testimony, explained the ins and outs of ‘Scientific Management’ and how it could increase efficiency in business operations. Taylor’s testimony was also supported by a few well known business leaders, namely, J.M. Dodge, H.K. Hathaway, H.R. Towne and Harrington Emerson who already had adopted Taylor’s management system and had become highly cost efficient in their business operations.

Emerson, for instance, explained that, according to his estimates, the Eastern Rail Road could save one million dollars every day if it followed Taylor’s scientific management. His stand reinforced the notion that scientific management was the magic-cure for the efficiency-starved industries.

Is there a murmur of protest in our society when the electricity rates go up as they do fairly frequently? Shouldn’t our productivity experts be asked to thoroughly examine the working of power generating and power-distributing agencies?

Taylor used Brandeis’s term in the title of his monograph The Principles of Scientific Management, published in 1911. The Eastern Rate Case propelled Taylor's ideas to the forefront of the management agenda. Taylor wrote to Brandeis “I have rarely seen a new movement started with such great momentum as you have given this one.” Taylor's approach is also often referred to as Taylorism.

Managers and Workers

Taylor had very precise ideas about how to introduce his system:

  • It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone. 

  • Workers were supposed to be incapable of understanding what they were doing. According to Taylor this was true even for rather simple tasks.

  • Taylor believed in transferring control from workers to management. He set out to increase the distinction between mental (planning work) and manual labor (executing work). Detailed plans specifying the job, and how it was to be done, were to be formulated by management and communicated to the workers.

The introduction of his system was often resented by workers and provoked numerous strikes.

There is a fair degree of unanimity to treat Henry Ford’s assembly-line production techniques as the beginning of the twentieth century’s industrial upsurge. However, what made Fordism possible was the pioneering work of Frederick Taylor who pioneered “scientific management” and became a household name in the famous 1910 case which exposed the inefficiency of the American railroads.

“In the past man has been first. In the future the system will be first” predicted Taylor, the world’s first efficiency expert. Taylor’s emphasis on the system influenced Ford’s assembly-line production techniques which set in motion the juggernaut of mass production. Robert Kanigel’s recent study, The One Best Way highlights Taylor’s contribution in building the foundations of the Western industrial culture.

The central message of Taylor’s famous treatise The Principles of Scientific Management “reached deep into American life”. Peter Drucker, the real guru of management in our times, believes that it was Taylor and his techniques that won the Second World War for America and the Allies. In Post-Capitalist Society, Drucker maintains that “Frederick Taylor, not Karl Marx, warranted a place in the trinity of makers of the modern age with Darwin and Freud”.

From Taylor to Ford

After Taylor the next to bring about a metamorphosis of management was Henry Ford and his assembly line revolution. Both the basic concept and the working of management and the industrial revolution of our times are essentially the contributions of the United States of America. The title of Drucker’s introduction to The New Society puts it succinctly: “The world revolution of our time is ‘Made in USA’”.

According to a book entitled Michigan Yesterday & Today authored by Robert W. Domm, the modern assembly line and its basic concept is credited to Ransom Olds, who used it to build the first mass-produced automobile. Olds patented the assembly line concept, which he put to work in his Olds Motor Vehicle Company factory in 1901. This development is often overshadowed by Henry Ford, who perfected the assembly line by installing driven conveyor belts that could produce a Model T in 93 minutes.

Despite over simplistic attempts to attribute it to one man or another, it was in fact a composite development based on the collective thinking. Charles E. Sorensen, for instance, in his 1956 memoir My Forty Years with Ford, presented a different version of development that was not so much about individual “inventors” as a gradual, logical development of industrial engineering contributed by several individuals. However, Ford is invariably assigned the credit as its inventor or its first large-scale user. It represents the system of mass production which was invented by Henry Ford in the fateful year 1914.

The basic concepts undergirding Ford’s assembly line system have been adopted and applied universally in industrial and non-industrial establishments.

Mass production is now “a general principle for organizing people to work together”. Ford’s mass production techniques provide in our industrial society the new grammar of work, whether the work in question is a modern office or the Manhattan Project in World War II or the running of the McDonald’s fast food chain. In Aldous Huxley's Brave New World, the Alphas and Betas uninhibitedly endorse the place of Henry Ford as the real human engineer of the twentieth century:

Ford, we are twelve; oh make us one,
Like drops within the Social River;
Oh, make us now together run
As swiftly as thy shining Flivver.

Adoption of Fordism has changed the very nature of work and how we do it. It is, for instance, an amazing fact of our times that we all work together in organizations. Now it is the organization that produces and not the individual. This indeed is an historic change, the real meaning and implications of which have not at all been grasped in our society. Even if a pair of hands might have polished for hours a cake of Pears soap, I buy a Lever product. The hamburger you and I eat is not prepared by a cook but a whole chain of people involved in well-defined sub-roles.

And that’s how began what we call modern management.

Post Script

Last week I posed the query: why not Master of Business Management instead of Master of Business Administration? The answer is simple, but not at all flattering to the very concept of business and its practitioners. Peter Drucker, the high priest of contemporary management thought, ventured to say how the very term management was associated in the post-depression 1930’s with skullduggery that had rendered thousands jobless and homeless. So you can well imagine how a master of this witchcraft would be looked upon socially. Hence, they all settled down to accept the neutral term administration.

Continued to “Those who Built the Superstructure”
  

25-Jan-2015
More by :  H.N. Bali
 
Views: 434
Article Comment The science of management works for the greater profitability of the company, with management building a structure of financial reward for itself. Meanwhile, employees, being better managed, are restricted in number to what is essentially required, even if incentivised by schemes to maximise productivity. The outcome is a transfer of interest from the welfare of the individual in society, giving a man a job even if it entails over-manning to provide him with income - as was probably the case with the Eastern Rail Road, and in pre-Thatcherite Britain, when, for example, there were more railway personnel on the platforms than the one or two today - to that of the organisation, where the individual is a cog in the machine.

Science of management is inevitably a dehumanising process; but when it proves itself as a successful method of operating a concern, manufacturing or banking, then dehumanisation is its principle, as, for example, in Macdonalds, since mention is made of hamburger production, with its ''zero hour'' contracts with employees. In plain terms of scientific detachment, the company argues that it is not obliged to put the interests of employees above its own.
rdashby
01/26/2015
 
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