The period roughly beginning in 1750 and ending in 1870 is the Industrial Revolution: machine power replaces man and animal power, industrial organization becomes large scale, and productive work becomes highly specialized. Technological innovations that characterize the Industrial Revolution began earlier in other places, but only in Great Britain in this period is there such an early great leap in national economic productivity accompanied by widespread social transformation of an agrarian society into an industrialized one.The Industrial Revolution's dramatic impact on Great Britain lay possibly in the social, political, and legal conditions which were particularly favorable to change there. Private property was protected by British law and less subject to arbitrary seizure by the monarchy; taxation was not any more onerous than in other Western states; intellectual property rights were protected by established patent law; and, a combination of limited monarchy with an undercurrent of popular democratic sentiments, favored entrepreneurial risk-taking and private wealth creation more-so than anywhere else in Europe.
Consistent with Max Weber's thesis: Protestantism had rooted firmly in Great Britain with the king as head of the Church of England. While most of Europe still followed mercantilism, Great Britain's government pursued a relatively hands-off economic policy in matters of commerce. The Bank of England, established in 1694, also promoted economic development. The Bank was a private stock company (until nationalized in 1946) and in return for securing national debts had authority to issue currency -- promoting the circulation of money for business exchanges and a national monetary system.
Colonialism favored the development of the corporation, permitting capitalization through the sale of stocks. Early exchanges had been organized throughout Europe but traded mostly in commodities and currencies. Although Amsterdam's Bourse was the first to formally begin trading in securities in 1785, soon the London Stock Market was organized to trade in commercial stocks. In 1856 Parliament enacted the the English Joint Stock Companies Act, granting limited liability to investors and providing for public accounting of invested funds and earnings.Natural resources also played a determinative role in Great Britain's Industrial Revolution. The country had ample coal and iron deposits to create an early iron industry.
Thomas Newcomen in 1705, improving upon an earlier patent by John Calley, successfully built a steam engine that pumped water from coal mines. In 1760 John Smeaton applied the steam engine to fan the furnaces used in manufacturing iron. Iron production rose from 12 tons per furnace to 40 tons per furnace. This increased productivity made available a large supply of iron at low cost, and led to new uses for iron: bridges, ships, and other machines.If iron was the key metal of the Industrial Revolution, at the center of the Industrial Revolution was replacement of human and animal labor with that of the machine, the steam engine. A mechanical engineer James Watt improved the Newcome engine to create a truly workable and reliable source of power.
In 1775, Watt went into business with the British manufacturer Matthew Boulton, owner of the Soho Engineering Works at Birmingham, to manufacture steam engines that could be used in a variety of industrial settings, not just in mining. This partnership became one of the most important businesses of the Industrial Revolution.Boulton & Watt served as a kind of creative technical center for much of the British economy. They solved technical problems and spread the solutions to other companies.
Similar firms did the same thing in other industries and were especially important in the machine tool industry. This type of interaction between companies was important because it reduced the amount of research time and expense that each business had to spend working with its own resources. The technological advances of the Industrial Revolution happened more quickly because firms often shared information, which they then could use to create new techniques or products.One of the consequences of the introduction of steam power was that now mills and manufacturing that had run successfully with water power, could be located anywhere, not just close to water. Frederick Winslow Taylor: Father of Modern Management Modern management is the collaboration of people and machines to create value. In the early days of industrialization the innovators of machines and the innovators of organization and management were engineers.
Engineers, after all, were the ones closest to the machines, and this fact placed them at the interaction of workers and machines.This certainly helps explain Frederick Taylor and his invention of "Scientific Management". Taylor began his career as the first management theorist, consultant, and "guru" as an apprentice foreman and common laborer, positions from which he quickly advanced to chief engineer. Taylor's early resume, however, belies the fact that he was born into an affluent Philadelphia family. His direct observations of men at work led him to develop what we would call "motivation" theory, although this is a psychology term that would not be imported into the management vocabulary until later.
Taylor's own point of view, although benign towards workers, saw human labor very much analogous to machine work--- something to be "engineered" to achieve efficiency. His theories on management would be promoted worldwide (and maybe took stronger root in Japan than in the U. S. or Europe) and would be controversial at home. If greater economic development through efficient and productive work was Taylor's own view of his work, the growing Labor Movement would see "Taylorism" as exploitive.Organized labor's antagonism to the American popularity of Taylor's work would eventually lead to Congressional hearings and, pretty much, the demise of "Scientific Management".
Taylor developed his management theories in his book Shop Management published in 1903, making it arguably the first scholarly work on management. Although there were books and published pieces on what could be termed "management" these were more of a "guide to" or trade publication on best practices. Shop Management approached the role of manager as a general role with specific functions with respect to collaborative work.The problem, as Taylor saw it, was that workers were inefficient because: (1) Workers tended to ration their work load or work less than they could, because working faster and harder would mean that there would be less or no work to do in the future. (2) Management failed to structure work effectively and to provide appropriate incentives. It should be pointed out that Taylor is writing before the establishment of a "minimum wage" (the minimum wage became federal law in 1938), so the notion of what is "a fair day's work for a fair day's pay" was arbitrary.
A day-rate or hourly-rate was a common practice at the turn of the century. Taylor viewed these wage practices as rewarding for attendance, not performance. While another common practice was the "piece-rate" system that paid workers on the basis of output, this generally failed because standards were poorly set, employers cut rates when workers earned "too much", and workers would conceal their real capacity for production to keep standards low. The solution, to Taylor, lay in iscovering the appropriate work standard and fitting wages to the standard. Management should establish specific work targets, pay workers for the tasks and goals met, and provide regular feedback.
The main elements of his theory were:1. Management is a true science. The solution to the problem of determining fair work standards and practices could be discovered by experimentation and observation. From this, it follows, that there is "one right way" for work to be performed. 2. The selection of workers is a science.
Taylor's "first class worker" was someone suitable for the job. It was management's role to determine the kind of work for which an employee was most suited, and to hire and assign workers accordingly. 3. Workers are to be developed and trained. It is management's task to not only engineer a job that can be performed efficiently, but management is responsible for training the worker as to how the work is to be performed and for updating practices as better ones are developed.
This standardizes how the work is performed in the best way. 4. Scientific management is a collaboration of workers and managers. Managers are not responsible for execution of work, but they are responsible for how the work is done.
Planning, scheduling, methods, and training are functions of the manager. The "scientific" approach towards work led Taylor to investigate work through "task allocation" which meant that a job would be studied by sub-dividing it into discrete tasks, each element of the job would be investigated to discern the optimal efficiency by which it could be accomplished.The elements of the job, properly designed, then, would be reconstructed as an efficient job. The criticism of this approach is that it omits the worker's own contribution to the design of work and, thereby, alienates the worker from the job. Still, what Taylor does is link national wealth and company profits to how effectively work is performed, and he defines a cooperative role between labor and management in wealth creation.
Taylor's system was widely adopted in the United States and the world until its demise in the 1930's as organized labor pushed for a minimum wage based on hourly pay, as opposed to Taylor's contention that pay ought to be based on performance. In practice "Taylorism" too often fell short of a collaboration between labor and management and, frequently, was a mask for business exploitation of workers. The enduring and unquestionable contribution of Frederick Taylor is that management is firmly established as something done by trained, professional practitioners and is elevated as the subject of legitimate scholarship.