Wednesday, December 07, 2011

Book Review (#35 of 2011) Frederick Taylor - The Principles of Scientific Management

Since I've been reading seminal works this year, I decided to read this 1911 classic when it was posted on Project Gutenberg a while back. Taylor is credited as the father of scientific management as a field and this work is cited in Principles of Management classes like Smith's Wealth of Nations is in a Principles of Economics class.  It's another example of a book that is oft cited but rarely assigned to students to read-- I recall reading only excerpts from it in several Management classes as an undergrad, but the book is short enough to be fairly easily required reading.

Consider this part of the Introduction, written 100 years ago, after Pres. Theodore Roosevelt gave a speech urging conservation of national resources:
"We can see our forests vanishing, our water-powers going to waste, our soil being carried by floods into the sea; and the end of our coal and our iron is in sight. But our larger wastes of human effort, which go on every day through such of our acts as are blundering, ill-directed, or inefficient, and which Mr. Roosevelt refers to as a, lack of "national efficiency," are less visible, less tangible, and are but vaguely appreciated...As yet there has been no public agitation for "greater national efficiency," no meetings have been called to consider how this is to be brought about. And still there are signs that the need for greater efficiency is widely felt."
Taylor is an engineer who sounds like a supply-side economist.  Taylor's cause is fundamentally a Progressivist one, but he stands in opposition to Marxist elements agitating around him who are pitting the worker against the owner. Taylor is promoting a management style that requires heavily-involved owners and managers to increase the efficiency of the workers, the profitability of the businesses, and the wages of the workers.
"The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee."
This is a nationalist cause for Taylor-- maximum productivity means maximum standard of living for Americans.

"It is no single element, but rather this whole combination, that constitutes scientific management, which may be summarized as:  Science, not rule of thumb.  Harmony, not discord.  Cooperation, not individualism.  Maximum output, in place of restricted output.  The development of each man to his greatest efficiency and prosperity."


Taylor addresses the issue of shirking, or "soldiering" in his parlance, which he sees as widespread and contrary to the American spirit as demonstrated when Americans compete hard in sports on weekends.  This is fundamentally a problem of incentives-- if I'm paid by the day then I have no incentive to work quickly, but rather to prolong the number of days it takes to complete a job. Several examples of this in piece work is given, including the classic 1903 paper "Shop Management" on the Midvale Machine Shop.

Taylor confronts the following thinking that promote such shirking and inefficiency:

First. The fallacy, which has from time immemorial been almost universal among workmen, that a material increase in the output of each man or each machine in the trade would result in the end in throwing a large number of men out of work.
Second. The defective systems of management which are in common use, and which make it necessary for each workman to soldier, or work slowly, in order that he may protect his own best interests.
Third. The inefficient rule-of-thumb methods, which are still almost universal in all trades, and in practicing which our workmen waste a large part of their effort.
Scientific management is more than properly aligning incentives, like just paying someone for output rather than a flat daily rate. It requires investment in scientists who will first carefully observe the work being done and determine the most efficient way to do it. What's the proper size of the shovel? What's the maximum number of repetitions until a job is finished?  How far and how fast should the worker walk?  How often and for how long should his breaks be?  What is the "One Best Way" to do the job? The scientist becomes a micromanager, training workers in new ways of doing things in order to maximize productivity with the incentive dangled that the worker will receive higher pay for doing it this way.  

The example Taylor gives is from his time at Bethlehem Steel with workers shoveling pig iron. Here's a summary: 
"We found that this gang were loading on the average about 12 and a half long tons per man per day. We were surprised to find, after studying the matter, that a first-class pig-iron handler ought to handle between 47, and 48 long tons per day, instead of 12 and a half tons. This task seemed to us so very large that we were obliged to go over our work several times before we were absolutely sure that we were right. Once we were sure, however, that 47 tons was a proper day's work for a first-class pig-iron handler, the task which faced us as managers under the modern scientific plan was clearly before us. It was our duty to see that the 80,000 tons of pig iron was loaded on to the cars at the rate of 47 tons per man per day, in place of 12 and a half tons, at which rate the work was then being done. And it was further our duty to see that this work was done without bringing on a strike among the men, without any quarrel with the men, and to see that the men were happier and better contented when loading at the new rate of 47 tons than they were when loading at the old rate of 12 and a half tons." 
(Note: Taylor enlisted famed mathematician Carl G. Barth in his efforts.)  Taylor and his crew succeeded in achieving the 376% increase in productivity.  Workers went from earning the standard $1.15 a day to $1.85 a day, a 38% increase in their wage that put them well above what competing firms offered. Interestingly, when someone from another firm came and promised workers an even higher wage the Bethlehem management gave them its blessing to leave.  The workers came back to Bethlehem shortly thereafter because they found the other company's management always found ways to keep them from being productive to earn the higher promised wage. Other examples are given.  

Taylor's system requires owners to investment in scientific managers, and requires scientific managers to invest heavily in the workers, something with high up-front costs. Floor managers need not be highly educated engineers, only trained in how to use a slide-rule, which is sort of the 1900s equivalent of a scientific calculator.  

Wikipedia records Taylor's contribution to management thought and engineering, both here and places like Lenin's Soviet Union. I wouldn't hesitate to require this book in either a Principles of Management or Managerial Economics course.

The practicalities of Taylor's recommendations are questionable, and Wikipedia records that Bethlehem didn't implement all of his suggestions or methods.  But it's easy to see how the field of Management grew out of his work.  The book reminded me of the last time I worked on an assembly line and the plant had what I called the "Kaizen Team" who were people in white coats and clipboards monitoring our processes and looking for any ways they could improve efficiency.  The workers resented the team and suffered from Taylor's fallacy #1 (above) of assuming improved efficiency meant permanently eliminating their jobs (in some cases the workers were correct, however). I doubt many on the Kaizen Team had read Taylor in the original, though.  

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