The Industrial Revolution in Great Britain

1
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.

2
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
3
Innovations in Textile production

• Flying shuttle,
• Spinning jenny,
• Arkwright waterframe

4
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 SmithDifference in views on returns
  to the entrepreneur

5
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

6
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)

7
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

8
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.

9
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.

10
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.

11
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.

12
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.

13
Chapter Four

• Management Pioneers in the Early Factory

14
Management Pioneers in the Early Factory

• Robert Owen problems in human terms
• Charles Babbage systematic management
• Andrew Ure trained managers
• Charles Dupin took Ures ideas to France

This illustration of power loom weaving appeared
in Edward Baines's The History of Cotton
Manufacture in Great Britain (1835)
15
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
16
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
17
Robert Owens 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.

18
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

19
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

20
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
21
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).

22
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 managements efforts.
• Defended the factory system using comparison data
  from the cotton mills of 1833 and 1804. (See
  pages 71 and 72)

23
Charles Dupin (1784-1873)Industrial Education in
France

• Taught courses similar to Ures 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
24
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.

25
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.

26
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.