An assignment

on
“A prelude to scientific Management”

Course title: Management Thoughts

Course code: Mgt-407

Submitted to:

Nafiza Islam

Assistant professor

Department of Management Studies

Jahangirnagar University

Submitted by:

Team “Vision Quest”

Department of Management Studies

Jahangirnagar University

Date of submission: 02.12.2018

 Group Profile

Mohammad Aiub (ID-1539)

Nazmun Nahar (ID-1528)
Lucky (ID-1514)
Puspen Nath Pranta (ID-1557)
Fatema Khatun (ID-1522)
Foysal Ahmed (ID-1536)
 A Prelude to Scientific Management

Introduction:

During the second half of 19th century a new industrial era began in America, brought
about primarily by the expansion of mechanical industries and by the abolition of
slave labor.

Capital as we know it was not yet in existence. Modern form of capital was not
determined until the introduction in 1862 of the limited liability joint stock company.
An association which had some of the features of both partnership and a corporation.

It resembled a corporation in that:

▪
Shares of stock were transferable
▪
Its existence was not affected by the death of member

▪
Its management was in the hands of elected directors

It was like a partnership in that:

▪
Each shareholder was personally liable for all the company’s debt

▪
The relationships between members were governed by general law of
partnership

The introduction of joint-stock companies in the economy provided for:

1. Separation of capitalist from the employer

2. Division between capital and management

Owners were not shareholders and employers were in the main salaried managers.
Because of these changes, large business organizations were built up by financiers
such as Jay Gould, J.P. Morgan and Cornelius Vanderbilt.
Beginning of the Railroads:

During this period America’s most dramatic enterprise, the railroads, grew in
importance and stature. As a result:

▪
Rail lines extended, new territories were opened and competition for business
was keen.
▪
Managers began to consolidate their holdings in order to operate more
efficiently for greater profits.

HENRY VARNUM POOR:

Henry Varnum Poor was an American. He was born in December 8, 1812 and died in
January 4, 1905. He was an editor of American railroad journal, Financial analyst and
lawyer. He joined his uncle’s law firm being called to the bar in 1838. In 1849, he
purchased the American Railroad Journal of which became manager and editor.

Contribution of Henry Poor to Management:

Henry poor appeared on the scene to establish basic managerial principles for large
business organization. He has 3 principles:

• Organization

• Communication

• Information

Organization:

-The careful division of work.

-He proposed that a railroads organization should be designed to ensure that each
man’s time was fully utilized.

Communication:

- A reporting system which would keep management information of the operations.

Information:

- Analyzing reports to improve operations.

DANIEL CRAIG MCCALLUM:

He was a Scottish born American railroad engineer, general manager of the New
York and Eric Railroad and Union Brevet Major General during the American Civil
War, known as one of the early pioneers of management.

Contribution of Daniel C McCullum to Management:

1) In 1840, started building and maintaining railway bridges as subcontractor for

the New York and Eric Railroad.

2) Got promoted in 1854 as superintendent

3) New management methods and communication protocol using the telegraph

was introduced by him

4) The first modern organizational chart is credited to manage the business

operation

5) He set down a set of general principles of management in 1856

THE SCIENTIFIC MANAGEMENT MOVEMENT:

The first management publications were operated by the New York Public Library in
1917. Previously the managers of these industrial complexes use to discuss about their
problems and read the papers about Mechanical Engineers. From 1881 to 1897 eleven
titles were published. Later, 1897 to 1899 six titles were published but all of them
were under the engineering journals.

When the industrial revolution happens, they find out that one of the labor efficiency
is depend on a good wage or a good wages system. But examining the titles they find
out that the first management problem is concerning the wages. For that the large
organization were losing

1. Their power of direct supervision

2. Managers were seeking incentives as a substitute.
HENRY ROBINSON TOWNE:

Henry Robinson Towne was born in August 24, 1844 (Philadelphia) and died in 1924.
He was a mechanical engineer and the President of The Yale and Towne
Manufacturing Company for 48 years. The editors of Industrial Management: The
Engineering Magazine claimed that Henry R. Towne was unquestionably the pioneer
of scientific management.

Contribution of Henry R. Towne to Management:

Towne began the systematic application of efficient management methods and one by
one he published three papers with modern management methods. His important
contributions can be given in some points below:
▪
First paper “The Engineer as an Economist”-an inspiration for F. W. Taylor
▪
Shop Management

▪
Pleaded for the recognition of a science of management

▪
Second paper “Gain Sharing” in 1896

▪
Definite wage rate to each employee

▪
Third paper “Evolution of Industrial Management” in 1921.

▪
Contrasted the status of scientific management

▪
Set the climate and atmosphere for later application of scientific methods.

First Paper “The Engineer as an Economist”:

It was delivered to the American Society of Mechanical Engineers in 1886, probably

inspired F. W. Taylor to devote his life’s work to scientific management. In this paper
Towne recognized that information on shop management was there but there was no
established vehicle for exchanging and disseminating that information. So, Towne
pleaded for the recognition of a management with its own literature, journals and
associations. He emphasized that only through such exchange entrepreneurs could
benefit from the experience of others.
Second Paper “Gain Sharing”:

It was published in 1896. He contended that profit sharing was neither an equitable
adjustment nor a correct solution to an economic problem. The gain that one
department could make through its efforts could be lost in another. He advocated the
determination of the cost for each element of production. Then, what the employees
of one department gained could be returned to them according to their merit. For this
reason, he called his plan Gain Sharing rather than Profit Sharing. Townes plan
guaranteed a definite wage rate to each employee.

Third Paper “Evolution of Industrial Management”:

It was written in 1921. In this paper he contrasted the status of scientific management
noting particularly the establishment of industrial management courses in technical
colleges and universities.

So, without any doubt, Henry R. Towne’s main contribution to management is that he
set the climate and atmosphere for the later application of scientific methods.

HENRY METCALFE:

Captain Henry Metcalfe was born in October 29, 1847 and died in August 17, 1927.
He was an American army ordnance officer, an inventor and early organizational
theorist, He is known for his 1873 invention of a detachable magazine for small arms.
He worked on modern management accounting. He developed the "time card" and
theory on the role of middle management.

Contribution of Henry Metcalfe to Management:

While Towne was developing his ideas at Yale and Towne, Captain Henry Metcalfe
was exploring the management labyrinth at the Frankford Arsenal. Metcalfe’s main
contributions to management are given below:
▪
Development of new system for organization and control
▪
Recognition by Frederick W. Taylor and American Management Association

▪
The Cost of Manufactures and the Administration of Workshops, Public and
Private, 1885-Pioneer work in the area of management science
▪
Theory based on control
 ▪
Visualized and insisted that all authority should emanate from a given source,
with a flow back to that source of detailed information concerning
expenditures and accomplishments.
▪
Disposed of all except the most important and needed reports
▪
eliminated 13 different kinds of books and reports in Frankford Arsenal

▪
“The Shop-order system of Accounts”. Transactions of the American Society
of Mechanical Engineers 7 (1886)
▪
Continued to experiment in better managerial control techniques

FREDERICK HALSEY (1856-1935):

He was an American mechanical engineer and economist who was long time editor of
the American Machinist magazine. He was born in New York in 1856 and died in
1935. He graduated from Cornell University with a degree in mechanical engineering.

Disagreed with Town’s plan: He disagreed with town’s plan from two points of view

1. Reward for all

2. Profit sharing: He believed that profit come not only from a particular source
he believed that profit may arise and from that thought he disagreed with
profit sharing for four reasons.

I. Many sources
II. Lazy men benefited
III. Did not share losses
IV. Cutting piece rate

Premium plan:

His premium plan called for a determination of the normal time for completing a job
with a premium rate paid the employee for the time saved. The plan guaranteed each
worker a full day’s pay plus the premium if his initiative warranted it. It focuses on
three things,

1. Normal time
 2. Full day payment

3. 2/3 gain for employer

Advantages:

1. It is simple to understand

2. It guarantees time wages to workers

3. The wages of time saved are shared by both employers and workers

4. Fixed overhead cost is reduced

Disadvantages:

1. Quality of work suffers

2. Workers criticize this method on the ground that the employer gets a share of
wages of the time saved

3. It is difficult to determine standard time and hourly rate of wages.

In many sectors and in most theory Halsey criticized Towne’s ideas and methods. In
most cases, Halsey’s methods are effective. His premium plan works well for both
employer and employees.