industrial management,

term applied to highly organized modern methods ofcarrying on industrial, especially manufacturing, operations.

The Rise of Factories

Before the Industrial Revolution people worked with hand tools, manufacturing articles in their ownhomes or in small
shops. In the third quarter of the 18th cent. steam power was applied tomachinery, and people and machines were br
ought together under one roof in factories, where themanufacturing process could be supervised. This was the begin
ning of shop management. In thenext hundred years factories grew rapidly in size, in degree of mechanization, and in
complexityof operation. The growth, however, was accompanied by much waste and inefficiency. In theUnited States
many engineers, spurred by the increased competition of the postCivil War era,began to seek ways of improving pla
nt efficiency.

The Development of Industrial Management

Studies of Worker Performance
The first sustained effort in the direction of improved efficiency was made by Frederick WinslowTaylor
, an assistant foreman in the Midvale Steel Company, who in the 1880s undertook a seriesof studies to determine wh
ether workers used unnecessary motions and hence too much time inperforming operations at a machine. Each oper
ation required to turn out an article or part wasanalyzed and studied minutely, and superfluous motions were eliminat
ed. Records were kept ofthe performance of workers and standards were adopted for each operation. The early studi
esresulted in a faster pace of work and the introduction of rest periods.

Management of the Machine

Industrial management also involves studying the performance of machines as well as people.Specialists are employ
ed to keep machines in good working condition and to ensure the quality oftheir production. The flow of materials thro
ugh the plant is supervised to ensure that neitherworkers nor machines are idle. Constant inspection is made to keep
output up to standard. Chartsare used for recording the accomplishment of both workers and machines and for comp
aring themwith established standards. Careful accounts are kept of the cost of each operation. When a newarticle is t
o be manufactured it is given a design that will make it suitable for machine production,and each step in its manufact
ure is planned, including the machines and materials to be used.

Other Aspects of Management

The principles of scientific management have been gradually extended to every department ofindustry, including offic
e work, financing, and marketing. Soon after 1910 American firmsestablished the first personnel departments, and ev
entually some of the larger companies tookthe lead in creating environments conducive to worker efficiency. Safety d
evices, bettersanitation, plant cafeterias, and facilities for rest and recreation were provided, thus adding to thewelfare
of employees and enhancing morale. Many such improvements were made at theinsistence of employee groups, esp
ecially labor unions.
Over the years, workers and their unions also sought and often won higher wages and increasedbenefits, including gr
oup health and life insurance and liberal retirement pensions. During the1980s and 1990s, however, cutbacks and do
wnsizing in many American businesses substantiallyreduced many of these benefits. Some corporations permit empl
oyees to buy stock; others makeprovision for employee representation on the board of directors or on the shop grieva
ncecommittee. Many corporations provide special opportunities for training and promotion for workerswho desire adv
ancement, and some have made efforts to solve such difficult problems as jobsecurity and a guaranteed annual wage
.

Modern Trends
Modern technological devices, particularly in the areas of computers, electronics,thermodynamics, and mechanics, h
ave made automatic and semiautomatic machines a reality.The development of such automation is bringing about a s
econd industrial revolution and iscausing vast changes in commerce as well as the way work is organized. Such tech
nologicalchanges and the need to improve productivity and quality of products in traditional factorysystems also chan
ged industrial management practices. In the 1960s Swedish automobilecompanies discovered that they could improv

e productivity with a system of group assembly. In acontrast to older manufacturing techniques where a worker was r
esponsible for assembling onlyone part of the car, group assembly gave a group of workers the responsibility for asse
mbling anentire car.
The system was also applied in Japan, where managers developed a number of other innovativesystems to lower co
sts and improve the quality of products. One Japanese innovation, known asquality circles, allowed workers to offer
management suggestions on how to make productionmore efficient and to solve problems. Workers were also given t
he right to stop the assembly lineif something went wrong, a sharp departure from U.S. factories. By carefully controlli
ng themanufacturing process, Japanese managers were able to cut waste, improve productivity, andreduce inventory,
thus significantly reducing costs and improving quality. By the early 1980s,Japanese companies, which had once bee
n criticized for producing for producing low-qualitygoods, had established a reputation for efficiently producing highquality, high-tech products. Inthe 1980s and early 90s many U.S. companies looked to increase their competitiveness
byadapting Japanese methods for improving manufacturing quality.