The Gathering Forces of Change
* Henry Ford Reshapes the Industrial World:
* Born 1863.
* Fascinated by technology and tried to improve the machinery he used. * Interests were in automobiles and he spent all of his spare time and money on his on prototype. * 1903, Ford Motor Company was incorporated and production of the Model A began. * In 1908 the Model T was being manufactured.
* Always emphasized continuous improvement and was interested in finding the quickest and cheapest way to produce cars. * Introduced the moving assembly line
* His philosophy in terms of product development:
* “Decide on your product design, freeze it, and from then on, spend all your time, effort, and money on making the machinery to produce it, concentrating so completely on production that, as the volume goes up, it is certain to get cheaper per unit produced.” * In 1910 Ford opened the largest automobile assembly plant in the world * Management and technical systems had to be improved: * Employee turnover
* Foremen had total power over the workers
* These abuses were magnified by the piece-rate system * Ford replaced the piece-rate system with a fixed wage and took the power to fire workers away from the foremen. * Ford believed that the abolition of poverty was only worthwhile end for business * 1914, Ford increased the minimum wage of employees from $2.34 for 9 hours work to $5.00 for an 8 hour day * Ford realized that the key to success was not low wages and long hours but it was high wages and reasonable hours so workers could afford to buy the things they produced and would have the time to do so.. * Public reaction was very strong.
* Ford created a system that “had all of the advantages and none of the disadvantages of socialism” * Ford hired a core of social workers to teach hygiene, to teach employees how to shop efficiently, how to open savings accounts, and how to purchase houses. * Sponsored a company-owned commissary where employees could buy food and goods almost 90% below the prices of other stores Opened a hospital that had fixed rates for all treatments * Ford’s labor policy was considered the most progressive in the world. * Ford saw unionization as another assault on his control and so he opposed it * He was not vulnerable to the “scarcity mentality” and saw money as a tool rather than as an end in itself. * Ford was one of the most influential industrialist and wealthiest men of his time and he took every step to share this wealth with the public. * The Quantitative vs. Nonquantitative Struggle Intensifies: * Quantitative is numbers or efficiency-oriented
* Was an outgrowth of the work of Frederick Taylor and his associates. * Key characteristics of the mechanistic approach to problem solving was that all specialist worked together on problem to derive the best-thought-out, most efficient solutions. * After WWII, operation research techniques were used rapidly by government and industry. * First academic course was offered by Massachusetts Institute of Technology in 1984 * First full degree program was begun at Case western Institute of Technology in 1951 * Techniques were developed and used to solve a lot of industrial problem. * Nonquantitative is emotions or psychology-oriented
* By middle of 1900a, a number of institutions had been developed to study social issue management and ti measure their influence on productivity * Institute for Social Research founded in 1947
* Conducted a wide range of experiments and surveys that showed adverse effects of pressure, of punitive vs. helpful supervision * Developed data to support their hypothesis that workers are more productive when supervisors solicit, listen to, and act on...