The History of Management Thought

Slide 1:The History of Management Thought

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

Slide 2:Chapter Eleven

Scientific Management in Theory & Practice

Slide 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

Slide 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.

Slide 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

Slide 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.

Slide 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.

Slide 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

Slide 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.

Slide 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.

Slide 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.

Slide 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.

Slide 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

Slide 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

Slide 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.

Slide 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

Slide 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.

Slide 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

Slide 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.

Slide 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.

Slide 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.

Slide 22:Chapter Twelve

Scientific Management in Retrospect

Slide 23:Scientific Management in Retrospect

The Economic Environment Technology The Social Environment The Political Environment

Slide 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.

Slide 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

Slide 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

Slide 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

Slide 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

Slide 29:The Social Environment

Slide 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.

Slide 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.

Slide 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.

Slide 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

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Slide 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.

Slide 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 Taylor http://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

Slide 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 Gilbreth http://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/

Slide 38:Part Two Internet Resources

The Samuel Gompers Papers http://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 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/

Slide 39:End of Part Two