The Pin Factory
What are the reasons that hierarchies emerge in organizations? What about the roles and the nature of this emergence? Does this aid in structuring these organizations/work areas? In this essay, I will be relating the description of activities that take place in an early industrial pin factory from Adam Smith’s Wealth of Nations to the organizing and structuring of work. The relation will be described done by examining the division and specialization of labour, requirements that lead to the need for coordination, Horizontal and Vertical Differentiation required for coordination and how structure/hierarchy arises and if it is in fact needed.
We can see that through the division and specialization of labour that Adam Smith’s pin factory is an example of a cottage industry transforming into a modern organization at the beginning of the industrial revolution. The pin factory could be viewed as a cottage industry due to the fact that it’s a small, loosely organized, yet flourishing complex of industry. We can also see the pin factory as a modern organization (at the beginning of the industrial revolution) due to the division of labour/roles throughout its ten workers. Each man has a specific task(s) dedicated to the creation of the pin and though the factory was very poor, when they worked hard, they could make upwards of forty-eight thousand pins a day. “Each person, therefore, making a tenth part of forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day” (Wealth of Nations, Smith, 1776) This shows that in order for the pin factory to obtain an effective method of output, there must be a form of division and specialization of labour which leads to Horizontal differentiation. This occurs through the organization
We can see that through the division and specialization of labour that Adam Smith’s pin factory is an example of a cottage industry transforming into a modern organization at the beginning of the industrial revolution. The pin factory could be viewed as a cottage industry due to the fact that it’s a small, loosely organized, yet flourishing complex of industry. We can also see the pin factory as a modern organization (at the beginning of the industrial revolution) due to the division of labour/roles throughout its ten workers. Each man has a specific task(s) dedicated to the creation of the pin and though the factory was very poor, when they worked hard, they could make upwards of forty-eight thousand pins a day. “Each person, therefore, making a tenth part of forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they certainly could not each of them have made twenty, perhaps not one pin in a day” (Wealth of Nations, Smith, 1776) This shows that in order for the pin factory to obtain an effective method of output, there must be a form of division and specialization of labour which leads to Horizontal differentiation. This occurs through the organization
Cited: Jones, G. R., Mills, A. J., Weatherbee, T. G., & Mills, J. H. (2006). Organizations and Organizational Effectiveness. Organizational Theory, Design, and Change (ch. 1-4). Toronto: Pearson Education Canada. Thorelli, H. B. (1986). Networks: Between markets and hierarchies. Strategic Management Journal, 7(1), 37-51. Williamson, O. E. (1975). Markets and Hierarchies: Analysis and Antitrust Implications: A Study in the Economics of Internal Organization. Social Science Research Network, 1. Retrieved February 4, 2013, from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1496220