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

The History of Management Thought

MGT336Michael L. Bejtlich

Based on The History of Management Thought, 5th edition, 2005 by Daniel A. Wren

Chapter Eleven

Scientific Management in Theory & Practice

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

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.

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

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.

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.

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

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.

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.

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.

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.

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

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

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.

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

William C. Durant

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

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

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.

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.

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.

Chapter Twelve

Scientific Management in Retrospect

Scientific Management in Retrospect

The Economic Environment Technology The Social Environment The Political Environment

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.

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

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

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

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

The Social Environment

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.

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.

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.

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

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.

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 Gurushttp://www.lib.uwo.ca/business/gurus.html

Scientific Management Demonstration Videohttp://www.archive.org/movies/index.html

Frederick Winslow Taylor http://www.accel-team.com/scientific/scientific_02.html

Fascinating Facts about Frederick Winslow Taylorhttp://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 Taylorhttp://www.pbs.org/wgbh/theymadeamerica/whomade/taylor_lo.html

Films of Westinghouse Works – 1904http://memory.loc.gov/ammem/papr/west/westhome.html

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 Gilbreth http://www.accel-team.com/scientific/scientific_03.html

The Gilbreth Networkhttp://gilbrethnetwork.tripod.com/front.html

Harrington Emerson Papershttp://www.libraries.psu.edu/speccolls/FindingAids/emerson.html

Wilhelm Wundthttp://www.indiana.edu/~intell/wundt.shtml

The Durkheim Pageshttp://www.relst.uiuc.edu/durkheim/

Part Two Internet Resources

The Samuel Gompers Papershttp://www.history.umd.edu/Gompers/index.html

Max Weber http://www.faculty.rsu.edu/~felwell/Theorists/Weber/Whome.htm

William Durant http://www.flint.lib.mi.us/timeline/autohistory_0798/durantW.html

The Alfred P. Sloan Foundationhttp://www.sloan.org/

The Alfred P. Sloan Museumhttp://www.sloanmuseum.com/

The Henry Ford Museumhttp://www.hfmgv.org/

The Henry Ford Estatehttp://www.henryfordestate.com/

The Theodore Roosevelt Associationhttp://www.theodoreroosevelt.org/

End of Part Two