Mgmt
Chapter 9:
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
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