The Organisational Cycle: Age of Reasoning (Part 5)

Continued from Part 4

Published in August 2015 issue of Sraddha, Vol. 7 (1), pp. 134-157.

OUTCOME OF THE AGE OF REASON: THE SCIENTIFIC MANAGEMENT

It was believed that the capabilities of science can not only transform the physical world but also the arena of management. Scientific management introduced a novel way of organizing labor and measuring productivity at the modern workplace. With a stopwatch and a clever method of analysis, Frederick Winslow Taylor[1] gave industrial/organizational consultancy a groundbreaking tool: the efficiency study. He and his associates were the first people to study the work process scientifically. They closely observed the working procedures and their effect on worker productivity.[i]

The application of Taylor’s scientific management theory can be seen in nearly all modern firms. His imprint can be found in production planning, production control, process design, quality control, cost accounting, and even ergonomics. Another contribution of scientific management theory was the importance of quantitative analysis, or the analysis of data and numbers to improve production effectiveness and efficiency.[ii]

Taylor’s scientific management consisted of four primary principles[iii]:

Develop a science for each element of a worker’s work profile, which would then replace the old rule-of-thumb method.
Scientifically select and then train, teach, and develop the worker, whereas in the past the worker chose his own work and trained himself as best as he could.
Cooperate with the workers so as to ensure all of the work being done in accordance with the principles of the science that has been developed.
Ensure an almost equal division of the work and the responsibility between the management and the workmen. The management takes over all work for which they are better suited than the workers, like application of scientific principles, while in the past almost all of the work and the greater part of the responsibility were thrown upon the workers.

The Ford Motor Company was launched in 1903 in a converted factory. During its early years the company produced just a few cars a day. Groups of two or three men worked on each car.[iv] In 1908 the Ford Company unveiled the Model T, a four-cylinder, 20-horsepower car that cost between $825 and $850 (equivalent to $15,500-$16,000 in 2003). However, Henry Ford was determined to build a simple, reliable and affordable car; a car the average American worker could afford. Ford was able to decrease the price eight years later to $345-$360 by developing an assembly line mode of production. Ford’s output grew from just over 32,000 cars in 1910 to nearly 735,000 cars in 1916. His Highland Park and River Rouge factories would become famous for their low-cost, standardized mass production.[v] All this was made possible by Ford’s application of scientific management in its mass production plants through division of labour and specialisation of tasks.

Three ideas emerging from Taylor’s Principles of Scientific Management[vi] which are considered relevant to this day are:

Rewards: “A reward, if it is to be most effective in stimulating men to do their best work, must come soon after the work has been done…The average workman must be able to measure what he has accomplished and clearly see his reward at the end of each day if he is to do his best.”
Quality standards: The use of written documentation for each part of a worker’s job, inherent in scientific management, is strikingly prescient of the procedural documentation in use in the ISO (International Standards Organisation) series of quality standards.
Suggestion schemes: An incentive for employees to make suggestions if they feel an improvement could be made to either the method or the implement used to undertake a task.

Modern day examples of scientific management can be abundantly seen in organisations such as McDonalds. The fast-food chain has complete uniformity, no matter what location, country, as are the methods used to prepare food, clean floors, promote staff and even lock-up on closing. It is this ability to efficiently supply standard food and service throughout the world that has allowed McDonalds to become the biggest restaurant chain on the planet. One can find several examples of scientific management techniques being used in call centers, hospitals (including Aravind Eye Care) and many other organisations. It has definitely helped in streamlining operations.

One of the most critical components of scientific management was the “time and motion” studies. Taylor employed a young man to analyze all the operations and the motions performed in each task and to time the motions with a stopwatch. By knowing how long it actually takes to perform each of the elements in every job, it would be possible to determine a fair day’s work.[vii] Through painstaking analysis, Taylor could also see that work was more efficient when broken down into its constituent parts and standardized (current terminology of this practice is development of “Best Practices”). This standardization also entailed breaking the workers’ tasks into smaller and smaller parts; in essence, specifying not only what is to be done but how it is to be done and the exact time allowed for doing it.[viii] Standardization also implies one right way of doing the task, however, this could also mean no scope for continued improvement, originality and innovation. In other words, the scope for individual contribution to improve and innovate may be highly limited in such systems.

Sri Aurobindo not only foresaw the scope of applying scientific techniques to govern humans but also commented upon the shortcoming of doing so, in terms of loss of individual freedom and suppression of individual’s discovery of his law of being. While writing about the use of science to govern human life he wrote:

“Discovery by individual free-thought of universal laws of which the individual is almost a by-product and by which he must necessarily be governed, this attempt actually to govern the social life of humanity in conscious accordance with the mechanism of these laws seems to lead logically to the suppression of that very individual freedom which made the discovery and the attempt at all possible. In seeking the truth and law of his own being the individual seems to have discovered a truth and law which is not of his own individual being at all, but of the collectivity, the pack, the hive, the mass.”[ix]

Division of labour created two classes – the doers and the planners, the workers and the managers. Seen from one perspective this seems fine because the workers could focus on carrying the production demands, while the management concentrates on planning, developing new standards, marketing, etc. Thus a law and truth of the collective or the pack, to use Sri Aurobindo’s terminology, of two different classes was established as a result of the practice of division of labour.

But if this idea is carried too far and great walls between the two classes are created the same arrangement could prove to be detrimental. For example, an engineer developing new standards without the input of the workers, or workers not giving feedback to the managers on how a particular task could be improved, is neither in the interest of the organisation nor the customers. This too was foreseen by Sri Aurobindo, who wrote:

“Thus we should have a new typal order based upon purely economic capacity and function, gunakarma, and rapidly petrifying by the inhibition of individual liberty into a system of rationalistic conventions. And quite certainly this static order would at long last be broken by a new individualist age of revolt, led probably by the principles of an extreme philosophical Anarchism.”[x]

Scientific management entails breaking down of jobs into smallest possible parts, so that each worker only performs a few movements over and over. This reduces humans to perfect automatons, making the job monotonous, tedious and boring. Motivating the workforce and encouraging them to take pride in their work become a serious challenge. After the implementation of scientific management at Ford in 1913, Ford had to hire more than 52,000 men to maintain a workforce of only 14,000, due to high attrition rate. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere, thereby stopping the line and halting the production. The increased cost and delayed production kept Ford from selling its cars at low prices. Drastic measures were necessary if Ford was to keep up its production targets.[xi] As a solution to high turnover Ford astonished the world in 1914 by offering a $5 per day wage ($120 today), which was more than double the rate of most of the workers. Further, they even reduced the working hours from 48 hours per week to 40 hours. These moves were extremely profitable; instead of constant turnover of employees, the best mechanics in Detroit flocked to Ford, bringing their human capital and expertise, raising productivity, and lowering training costs.[xii] This example suggests that increasing the wages or reducing the worktime could be a good solution to worker motivation. But it is not a lasting or sustainable one. Dr. Paul Krugman (Nobel-winning economist) has this to say on the role of wages as a motivation factor:

“The obvious economist’s reply is, if paying higher wages is such a good idea, why aren’t companies doing it voluntarily?…But in any case there is a fundamental flaw in the argument: Surely the benefits of low turnover and high morale in your workforce come not from paying a high wage, but from paying a high wage ‘compared with other companies.’”[xiii]

Reducing the worker activity to fulfilling the bare necessities of the task in hand and removing any thought or skill from that task makes the work merely a mechanical motion. Following such a motion day in and day out without a true understanding of its purpose in the larger scheme of things could lead to a lack of pride and ownership of work. Taylor’s claim that workers are solely concerned with monetary reward and that every facet of work needs to be controlled from above seems outmoded, untrue, and impractical. Both Ford and Taylor shared a similar opinion of the workers on the assembly lines. Ford is known to have commented:

“The average worker, I am sorry to say, wants a job in which he does not have to think. Those who have what might be called the creative type of mind and who thoroughly abhor monotony are apt to imagine that all other minds are similarly restless and therefore to extend quite unwanted sympathy to the labouring man who day in and day out performs almost exactly the same operation.”[xiv]

While on the first read the above statement makes it look like a low opinion of the ordinary worker, a candid read will make it obvious that this does represent the ordinary mentality of a lot of workers, including those working in the so-called white collar professions. Sri Aurobindo’s social-psychological thought tells us that this is symptomatic of the conventional stage of evolution, a mentality that prefers status quo and has a preference for following a prescribed set of instructions, an existing well-established pattern without any motivation to explore the deeper rationale behind the outer practice or imagining any further improvement or modification in the pattern. This is true not only of the individual but also of the collective organisation.

Only when Reason begins to question the status quo will things begin to evolve further. It is interesting to note that while the scientific management practices evolved as a result of application of individual reasoning, the mass of workers did not evolve beyond a conventional mentality. Rather, it may be said that the success of scientific management relied upon keeping the workers at a conventional stage of psychological evolution.

[1]Frederick Winslow Taylor (1856-1915), an American inventor and engineer applied his engineering and scientific knowledge to management and developed a theory called scientific management theory. His two most important books are: Shop Management (1903) and The Principles of Scientific Management (1911).

[i]http://www.mindtools.com/pages/article/newTMM_Taylor.htm

[ii]http://study.com/academy/lesson/frederick-taylor-theories-principles-contributions-to-management.html

[iii]http://en.wikipedia.org/wiki/The_Principles_of_Scientific_Management

[iv]http://en.wikipedia.org/wiki/Ford_Motor_Company

[v]http://www.pbs.org/wgbh/theymadeamerica/whomade/ford_hi.html

[vi]Taylor, Frederic. 1998. The Principles of Scientific Management. Re-Published. Originally published in 1911. Dover Publications.

[vii]Dale, Ernest. 1973. Management, Theory & Practice. McGraw-Hill Publication.

[viii]Taylor, Frederic. (1998), The Principles of Scientific Management. Re-Published. Originally published in 1911. Dover Publications, p. 28, 17.

[ix]Sri Aurobindo, CWSA, Volume 25, p. 25.

[x]Sri Aurobindo, p. 22.

[xi]http://www.forbes.com/sites/timworstall/2012/03/04/the-story-of-henry-fords-5-a-day-wages-its-not-what-you-think/

[xii]http://en.wikipedia.org/wiki/Henry_Ford