History of Management Thought Daniel A. Wren Chapter 7

1. the tr ansfor mation of Amer ican Industr y
in post-Civil War
r ailr oad as the fir st big business
open new mar kets
telegr aph connected the nation for
financial, pr oduction, mar keting &
tr ansactions
Daniel McCallum intr oduced systematic
management on the Er ie r ailr oad
Review on Earlier Chapters
Car negie implemented systematic
management in steel industr y
outcome fr om technological advances
Other stage of Industr ial Revolution
changing power sour ce
evolving labor -management r elations
needs of systematizing manager ial pr actices
engineer s as pr ime sour ce of infor mation
about management pr actices
bor n in Pennsylvania
Backgr ound
enter Har var d Law School
an appr entice in Enter pr ise Hydr aulic
Wor ks of Philadelphia
saw bad industr ial condition in The Enter pr ise
Car r ier s : labor -> cler k -> machinist ->
gang boss of machinist -> super visor ->
master mechanic -> chief engineer
exper iment as basis for shop
management
got degr ee in mechanical engineer ing at
Stevens Institute of Technology
Taylor at Midvale
Lenny Mar tini - 29006014
Part II The Scientific M anagement Era
Ch. 7- The Advent of Scientific M anagement
Midvale implemented piecewor k
incentive system
natur al soldier ing
systematic soldier ing
= lump of labor
the wage system was a fault, not the wor ker s
a new industr ial scheme was essential to
pr event such bitter labor -management
encounter s
FW Taylor is a centr al figur e in development of management thought
Taylor gave a push and provided credibility to idea of management, esp
scientific management
over come soldier ing by scientific
management, fact finding method to
deter mine empir ically the r ight way to
per for m task
his Pr inciples of Scientific Management as tr ue science of management
most of Taylor 's insight ar e still valid today
there is no best way but there are always better ways
planning depar tment
exception pr inciple
machine layout & design
time study be the foundation of Taylor system
Summary
pr escr iptive time study
used as analytical purpose, future vs past uses of data
each job br oken into elementar y movement as possible
positive br eakthr oughs
useless movement discar ded
standar dization of tools & methods
The Sear ch for Science in Management
Taylor pr ovided the polestar to a significant er a in the evolution of
management thought
analytical
time study involves a car eful study of the
time in which wor k ought to be done
per centage added to allow unavoidable delays
& inter r uptions, cover the newness of wor ker ,
& for r est per iods
1901 : Taylor & family moved to Philadelphia
become inventor s and mechanical engineer
patent steel hammer , machine tools,
Taylor -White pr ocess of steel cutting
tools
building a file of elementar y movements & times to be used
constr uctive
Backgr ound
design new concept for golf clubs
Industr ial r evolution : piece based incentives
Ear lier payment systems
Henry Towne : gain shar ing
1909 : gave cour se on scientific
management in Har var d
Fr eder ick Har sley : pr emium plan
fr ee publicity of Taylor 's system
obser vation & analysis thr ough time
study to set the r ate or standar d
gr oup of Easter n r ailr oads asked the
Inter state Commer ce Commission for an
incr ease in fr eight r ates
Taylor 's pr oposal
differ ential r ate system of piecewor k
The Easter n Rate Case
some testimony about how r ailr oads
could save million dollar a day by
applying scientific management
Dodge : pr ogr ess at Link-Belt Company
Gilbr eth : scientific management could
be used in union shop
those who meet standar d r eceived an
extr aor dinar y pay
hope of r apid pr omotion
non economic incentives
The Quest for Impr oved Incentives
shor ter hour s of wor k
better sur r oundings & wor king conditions
union pr evented wor ker s for fulfilling
their per sonal desir es
Taylor wanted his system impr oves the
efficiency of gover nmental unit
str ike r esult of not consulting the wor ker
befor e do the time study
r esolution to pr event the use of time-measur ing devices and of
incentive payments in any militar y agency of the gover nment
par adox of high wages & low cost
people have the dr ive to achieve,
ambition suited with their wor k
The Advent of
Scientific
Management
Water town &The Congr essional Investigation
Taylor 's system and the attempt to br ing efficiency to
gover nment agencies was clear ly cr ippled
highest gr ade of wor k which his ability fit him
ter m fir st-class man
maximum amount of wor k which he can do and thr ive
when he works as first-class man should
be paid 30-100 % beyond aver age of his
class
gr eat loss as the r esult of inefficiency in almost all daily acts
management's task to find the wor k for
which employees wer e best suited
Taylor wrote about need for national efficiency in
Pr inciples of Scientific Management
fundamental pr inciple of scientific management ar e
applicable to al kinds of human activities
those who did not meet standar d
r eceived an ordinar y r ate of pay
paying men and not positions
Emer son : standar d unit of cost saved
millions in labor cost & mater ials &
maintenance
inefficiency lies in systematic management
led to consider ation of impr ovement in tools,
machines, mater ials, methods & ultimate
standar dization
domestic system : based on per for mance
1906 : Pr esident of Amer ican Society of
Mechanical Engineer s
Hathaway : incr ease wor ker 's wage at
Tabor Manufactur ing Company
quickest & best method for each elementar y
movement obser ved
the movement was timed & r ecor ded
2 phase
time study & per for mance standar ds
the principle object of management is to secure the
maximum pr osper ity for the employer and each employee
basis
Taylor : The Peripatetic
Philosopher
1. development of a tr ue science
2. scientific selection of the wor kman
Frederick Winslow Taylor : The Early Years
selection of wor ker s who could meet
standar ds when motivated with
differ ential piece r ate
philosophy of mutuality inter est
3. scientific education and development
definition of management
knowing exactly what you want men
to do, and then seeing that they do
it in the best and cheapest way
4. intimate fr iendly cooper ation between the management and the men
The Task Management System
science, not r ule of thumb
har mony, not discor d
cooper ation, not individualism
ar t of management
the r elations between employer s &
men for m without question the most
impor tant par t of this ar t
whole combination constitutes scientific management
management had r esponsibility to
design the job to gr eatest
pr oductivity
maximum output, in place of r estr icted output
the development of each man to his gr eatest efficiency & pr osper ity
mental r evolution of men to their duties, their wor k, their
fellow men, and towar d their employer
mental r evolution of management towar d their duties, their fellow wor ker s in
the management, their wor kmen, and all their daily pr oblems
cooper ation, not individualism
task management depended on
car eful planning
The Mental Revolution
distinction between planning of wor k & its per for mance
scientific management as mental r evolution
for m functional for emen to cope
complexity in managing
maximum output, in place of r estr icted output
qualities
the development of each man to his gr eatest efficiency & pr osper ity
br ains, education, special or technical knowledge,
manual dexter ity or strength, tact, ener gy, grit,
honesty, judgment or common sense, good health
given mor e r esponsibility by fur ther segr egating & delegating the function
unity of command
efficiency
incr easing sur plus
or der of wor k r oute cler k
r esult of mental r evolution
gain mor e pr ofit for employer
instr uction car d cler k
incr ease wage for wor kmen
time & cost cler k
shop disciplinar ian
union built & encour aged antagonism setting the wor ker
apar t fr om management
scientific management encour aged a mutually of inter ests
union wants labor have mor e gain fr om employer
Taylor's Functional Foreman
vir tues & defects
Taylor's functional foreman
union vs scientific management
speed boss
r epair boss
both system and good men ar e needed
for being best system
success will be in pr opor tion to the ability, consistency, and
r espected author ity of the management
peacemaker
gang boss
scientific management wants mutuality inter est thr ough
impr oved pr oductivity
inspector
functional author ity
Taylor & The Human Factor
in scientific management, ther e is never only the best way,
but ther e always a better way
functionalization was an attempt at decentr alization
exception pr inciple
all author ity based on knowledge, not position
1890 : Gener al Manager of Manufactur ing Investment Company
Taylor impr essed by Hayes-Basley system of account in MIC
with engineer ing backgr ound & knowledge in accountant,
Taylor decided to become consulting engineer for
management
impr oved pr ocess & condition of female labor
fir st client : Simonds Rolling Machine Company
Steel Motor Company
implemented accounting system to set up expense
classification, distr ibute over head expenses, impr ove
mater ial handling & contr ol system
developed system of cost accounts for mater ial pur chases,
inventor ies and issuance of stor es
char t, r outing & assembly sheet
installed a system of functional for emen
established a planning depar tment
Taylor : The Manager & The Consultant
or ganized the toolr oom & stor er oom
Bethlehem Steel Company
implemented accounting system
Hayes-Basley accounting system
cost as integr al par t of daily planning & contr ol
study wor ker fatigue
set the r ate of payment ar bitr ar ily
Sanfor d E. Thomson
Henr y L. Gantt
Assistants
Car l Bar th
Dwight V . Mer r ick
James Gillespie
Maunsel White
Taylor 's tale of Schmidt
7- The Advent of Scientific Management - Lenny 29006014.mmap - 20/09/2006 -
per suade listener s that systematic management could be
applied to even the most basic wor k pr ocesses and still yield
substantial impr ovement