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.
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
Innovations in Textile
production
• Flying shuttle,
• Spinning jenny,
• Arkwright waterframe
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…
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
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)
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
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.
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.
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.
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.
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.
Chapter Four
Management Pioneers in the
Early Factory
Management Pioneers in the
Early Factory
This illustration of power loom weaving
appeared in Edward Baines's The History of
Cotton Manufacture in Great Britain (1835)
• Robert Owen – problems
in human terms
• Charles Babbage –
systematic management
• Andrew Ure – trained
managers
• Charles Dupin – took
Ure’s ideas to France
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
Robert Owen,
Biographical Notes
Robert Owen, Courtesy of Dr. Steven
Kreis http://www.historyguide.org
• 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’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.
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
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
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
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).
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)
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
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.
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.
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.