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The Industrial Revolution in Great Britain. The Steam Engine James Watt perfected the Steam Engine making it a reliable source of power for factories and transportation. It became more economical to bring people to the work (factory) rather than taking the work home (domestic system).

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The Industrial Revolution in Great Britain

  • The Steam Engine

    • James Watt perfected the Steam Engine making it a reliable source of power for factories and transportation.

    • It became more economical to bring people to the work (factory) rather than taking the work home (domestic system).

    • As factories grew, management/leadership became more important.


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The Steam Engine

  • Milling wheat into flour

    • A human turning a millstone can covert one-half bushel of wheat into flour in one hour.

    • Three bushels can be ground in one hour with a horse-driven mill.

    • A steam driven mill can do 10 bushels per hour.

Steam Engine at British Science Museum Jones, D.. http://pics.tech4learning.com


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Innovations in Textile production

  • Flying shuttle,

  • Spinning jenny,

  • Arkwright waterframe


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Management: The Fourth Factor of Production

  • Management joins land, labor and capital as a recognized factor of production.

  • Richard Cantillon, currency speculator

    • First to use the term entrepreneur

    • “The work of any to sell to another at an uncertain price”

  • Jean Baptiste Say also wrote about entrepreneurs and noted their frequent roles as managers for others.

  • Also know that Joseph Schumpeter said that entrepreneurs “break down the old economic order and rebuild a new one”

  • Say versus Smith…Difference in views on returns to the entrepreneur…


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Management Problems in the Early Factories

  • Labor:

    • Recruiting workers

    • Training (most were illiterate)

    • Discipline/Motivation

      • Wage incentives (the “carrot”)

      • Punishment or fines (the “stick”)

      • Use of religious morals and values to create the proper work attitudes and behaviors (the “factory ethos”)

      • Finding qualified managers

  • The Ludite movement


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Management Problems in the Early Factories

  • Developing Managers/Leaders was also difficult.

  • No body of management knowledge existed.

  • The general view of leadership depended on character of the leader and personal traits.

  • James Montgomery – first management texts of managerial advice:

    • How to discern quality & quantity of work

    • How to adjust & repair machinery

    • How to keep costs down

    • How to “avoid unnecessary severity” in disciplining subordinates

  • Early advocate for worker incentivization (See last paragraph on page 51)


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Management Problems in the Early Factories

  • Management Functions in the Early Factory

    • Planning operations

    • Planning against worker organization and Luddites

    • Planning of power sources and connections

    • Planning flow of work

    • Controlling performance

  • Check out pgs. 52-54 for early examples of organizing, motivating and control


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Cultural Consequences of the Industrial Revolution

  • Condition of the Worker

    • Economists Thomas Malthus and David Ricardo view worker condition as dismal and inevitable.

    • Robert Owen, Karl Marx, and Friedrich Engels saw people as powerless in their environment.

      However…

    • Rise of capitalism released people from drudgery.

    • Incentive plans, steady employment and regular hours improved worker well-being.

    • Workers’ real wages and conditions improved.


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Cultural Consequences of the Industrial Revolution

  • Child and Female Labor

    • Primarily found in the textile industry.

    • Entrepreneurs ranged from exploiters to good employers such as Josiah Wedgwood, Matthew Bolton, James Watt and Robert Owen.

    • Contradictory evidence, religious and moral concerns affect understanding of the true situation.

    • Over time, legislation and capitalism made it uneconomical to employ children.

    • Industrial capitalism created a method to gain leverage for a better life.


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Cultural Consequences of the Industrial Revolution

  • Industrial Revolution inherited worker poverty.

  • Industrial efficiency reduced prices of goods and raised real wages.

  • Child and female labor existed long before factories began.

  • Victorian values of keeping women at home created the atmosphere for critics of the factory system like Charles Dickens.


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Industrial Revolution – Summary

  • Overall

    • Wages were rising

    • Infant mortality was declining

    • Machinery replaced some of the drudgery

  • The Industrial Revolution was the beginning of improving peoples’ standard of living.


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Summary

  • The Industrial Revolution created a new cultural environment and new management challenges.

  • Organizations changed by infusions of capital, division of labor, and the need for performance.

  • The role of the entrepreneur-manager and its need was recognized.


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Chapter Four

Management Pioneers in the Early Factory


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Management Pioneers in the Early Factory

  • Robert Owen – problems in human terms

  • Charles Babbage – systematic management

  • Andrew Ure – trained managers

  • Charles Dupin – took Ure’s ideas to France

This illustration of power loom weaving appeared in Edward Baines's The History of Cotton Manufacture in Great Britain (1835)


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Robert Owen,(1771- 1858)Utopian Socialist

  • Learned about management by observing and trial and error on the job.

  • Contributions

    • Reformed the factory system by improving workers’ working & living conditions.

    • Employed child labor but worked to get a law passed to regulate hours of work.

    • “Silent Monitor” which relied on peer pressure or public knowledge of performance vs. corporal punishment.

Robert Owen Wren, History of Management Thought


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Robert Owen, Biographical Notes

  • Self-made, successful entrepreneur

  • Founded his first factory in Manchester, England at 18

  • Established New Lanark, Scotland partnership with new vision in 1795

  • Applied new ideas about the welfare of society to the workplace

  • Established utopian community New Harmony in Indiana, USA

Robert Owen, Courtesy of Dr. Steven Kreis http://www.historyguide.org


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Robert Owen’s Philosophy

  • Entrepreneurs should invest in the “vital machine” (people) as a means of increasing profitability.

  • He desired a communal society :

    • All would share equally, regardless of contribution.

    • There would be no division of labor.

    • There would be no wage system.

  • Individuals were “creatures of their environment;” character developed if the material and moral environment was proper.


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Charles Babbage (1792-1871)Irascible Genius

  • Never a manager, however a keen observer of the factory and a brilliant inventor and scientist.

  • The Difference Engine – a mechanical calculator

  • The Analytical Engine – the first computer


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Wrote: On the Economy of Machinery and Manufactures

  • Contributions:

    • Scientific, systematic approach in analyzing industrial operations

    • Descriptive cost accounting (not standard costing that Emerson developed later)

    • Mutual interests between the workers and management

    • Bonus for suggestions

    • Profit sharing


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Andrew Ure (1778-1858)Management Education Pioneer

  • First “teacher of management”

  • Well known scientist – his courses attracted those seeking technical knowledge to obtain a managerial job

Andrew Ure, courtesy of Strathclyde University Archives OP4/18


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Andrew Ure

  • Ure wrote about the operations of the factory including:

    • Admonishing the workers to accept the introduction of machinery.

    • Organizing the factory into an “organic system” of “the mechanical, the moral and the commercial” (production, personnel, and sales & finance areas).


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Andrew Ure

  • Had an early notion of the task of the general manager to integrate the parts to contribute to the whole (organic system).

  • Defended the factory claiming it enabled more benefits to society.

  • Believed that workers were generally non-appreciative of management’s efforts.

  • Defended the factory system using comparison data from the cotton mills of 1833 and 1804. (See pages 71 and 72)


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Charles Dupin (1784-1873)Industrial Education in France

  • Taught courses similar to Ure’s management classes in France.

  • Unique Insights

    • Technical/manual work was different from managing others – “Special Study”

    • This “Special Study” could be taught rather than gained by experience alone.

    • Technological advancement did not lead to unemployment.

    • Through education, workers could share in industrial prosperity.

Charles Dupin


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Charles Dupin

  • Was influenced by colleague Jean Baptiste Say, industrial economist.

  • Influenced the work of Henri Fayol indirectly.

  • His materials on management and his Discours sur le Sort des Ouvries, published in 1831, influenced thousands in France.


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Summary

  • Why did management fail to develop in this period?

    • Early writings emphasized techniques and not managing.

    • The period was dominated by the inventor-pioneer.

    • Illiteracy and difficulty in disseminating knowledge prevented practicing managers from knowing the works of Owen, Babbage, Ure, and Dupin.


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Summary continued

  • The genesis of modern management can be found in Great Britain and France after the Industrial Revolution:

    • Robert Owen searched for harmony between the human factor and the age of machines.

    • Charles Babbage applied a scientific approach to management.

    • Andrew Ure taught and developed managers in Glasgow.

    • Charles Dupin taught management courses in France.


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