I am currently completing my PhD in accounting at a UK University. I already hold a Bachelors degree and an MSc Research Methods both from UK universities. Over the past year I have conducted accounting seminars at a London University.
I am a Chartered Accountant with over 10 years experience working both in a private firm as an auditor and in commercial roles in industry for several companies that are household names in the UK. Recently I have turned my attention to supporting small businesses and social enterprises, helping them to get the most out of their accountants.
My practical experience combined with my academic knowledge gives me a unique perspective that is appreciated at both graduate and undergraduate level.
Critically examine the evidence which may claim that there has been a worldwide long-term decline in Fordist and Taylorist production systems.
Manufacturing in industrialised countries has been dominated for a significant part of the twentieth century by what are now known as Fordist and Taylorist production systems. In a response to economic and market changes there was an increase in the use of alternative Japanese production methods accompanied by a fall in manufacturing in the developed world (Womack, Jones and Roos 1990). This led some commentators to claim that there was a worldwide long-term decline in Fordist and Taylorist production systems ushering in an era of ‘Post Fordism’.
A number of theories are competing to explain these changes and predict what will happen next. As a result there is no consensus that the Post Fordism claim is true, however most are agreed that the changes in manufacturing marked the beginning of a new period of capitalism (Kiely 1998).
The first part of this essay is descriptive, outlining the key features of Fordism, Taylorism, Post Fordism and the economic circumstances in which they developed. To answer the question Post Fordism will be examined with respect to its ability to explain current trends, its theoretical basis and its implications for the future.
The essay will show there is little evidence to suggest that there is a long-term decline in Fordist and Taylorist production systems by providing counter evidence to suggest that contrary to Post Fordist claims, Fordist and Taylorist production systems persist and have found new homes outside of the manufacturing sector through the McDonaldization phenomenon (Ritzer 2008).
Much of the theory was developed analysing the motor industry because it has been central in fundamentally changing the way we make things. These principles have been adopted in practically every other industry in the USA and all over the world (Womack et al 1990). The implementation of these production systems have implications that include, and are not limited to, changes in customer relationship management (Womack et al 1990). Hetrick and Boje (1992) cited labour relations by Gorz and consumption, leisure and popular culture by Harvey as other areas that were impacted. This essay acknowledges these and other issues with a clear focus on the discussion of productivity.
Fordism and Taylorism
Fordism and Taylorism are often used synonymously to describe the twentieth century manifestations of the division of labour principle that Adam Smith introduced in his book the Wealth of Nations (Adam Smith Institute 2008).
Taylorism is the term used to describe the scientific management techniques developed by Frederick Taylor in the early twentieth century (Eldritch Press 2004). Taylor wished to increase productivity in the workplace and suggested that jobs should be divided into their constituent tasks and scientific analysis performed in order to find the “one best way” of performing each task.
An example of this scientific approach was applied by Taylor to shovelling pig iron at the Bethlehem steel factory: Shovellers were paid in proportion to the amount of iron that they shovelled, so a man who shovelled 50 tons in a day would be paid more than a man who shovelled 40 tons. Through observation it was found that a first-class man would do his biggest day’s work with a shovel load of about 21 pounds regardless of the material being shovelled.
To increase efficiency, Taylor provided 8 to 10 different kinds of shovels, each one appropriate to handling a given type of material to enable the men to handle an average load of 21 pounds. He also provided clear instructions on the task prior to execution. The result was to increase the average earnings of each shoveller from $1.15 to $1.88 per day and reduce the number of shovellers from approximately 600 to 140.
This exemplified the increases in productivity of the worker and eliminated any rule of thumb methods used previously. Individuals were scientifically trained and monitored by management to perform their specific tasks in a specific way (Eldritch Press 2004).
Henry Ford adopted the scientific management techniques of Taylor and implemented them in conjunction with the employment of machinery to assist in the manufacture process. By simplifying component parts, Ford was able to introduce factory assembly lines to bring simple parts to narrowly skilled workers who repeated a specific task. This increased efficiency. Ford’s Model T car was an example of a user-friendly homogenous product that was simply assembled with simple parts. The production system that later bore his name increased productivity and lowered costs, resulting in mass production of low quality but low cost cars. The cost savings of this mass production were passed onto consumers and resulted in mass consumption of motor vehicles (Womack et al 1990).
The economic environment that nurtured Fordism and Taylorism could be described as neo liberal market capitalism, where the market regulated most aspects of the economy with little regulation from the government. Maximising returns to owners of capital was a key driver in the economy and this often meant that short-term goals dominated decision-making strategies (Dicken 2002). In particular, liberal labour markets were essential for the growth of Fordism and Taylorism. The ability to hire new workers to work in a way dictated by management was central to its success. This had implications for union activity and membership. A complete treatment is beyond the scope of this essay however Ford himself was unable to fully implement his policies and eventually forced to shut down his Trafford Park plant due to ongoing problems with workers in the UK (Womack et al 1990).
Fordist and Taylorist production methods dominated the car industry into the 1950’s and it was during this period that the Japanese began experimenting with existing Fordist and Taylorist techniques to suit their own socio and economic circumstances.
With smaller domestic markets, scarce capital investment and a wider range of vehicles; Fordist mass production was unsuitable. Like Taylor they were interested in efficiency but they focused on eliminating muda (a term meaning waste) and increasing variety and quality. New labour laws meant that workers were able to ensure better conditions of employment. The assembly line was reorganised into flexible collaborative teams with less supervision and more responsibility for solving and anticipating problems.
After trial and error the “lean production” system was born, creating a variety of higher quality products. The system was considered lean because the supply chain used only what was necessary avoiding the huge inventories of unused parts or completed vehicle of Fordism. By ensuring that parts or cars were distributed efficiently, this created closer communication and geographical links between suppliers, producers and consumers (Womack et al 1990).
A complete discussion of the economic circumstances surrounding the increased adoption of lean production techniques is beyond the scope of the essay but regarding production two features are noteworthy: the apparent failure of the working class in advanced economies to consume at the rate and quantity required to sustain the Fordist model and the inability of the Fordist model to extract surplus value in the face of declining profits (Williams 2007). The Fordist mantra of “you can have any colour you want as long as it’s black” was becoming less relevant in a changing world where retailers had decided that the customer was always right.
Post Fordism examined
The Post Fordism argument claiming the long term decline of Fordist and Taylorist production systems is firmly focused on two phenomena: the fall in manufacturing in the developed world and the rise of lean production methods. The theoretical basis of these claims is examined below:
Post Fordism celebrated the ascension of lean production techniques borrowing heavily from postmodern theories (Winsor 1992). Figure 1 illustrates Winsor’s (1992) identification of Post Fordism as the third of three distinct stages of economic history.
The Pre Fordist stage refers to a nonexistent manufacturing sector, Fordism represents mass production in manufacturing and the third stage shows a long-term plateau of output as the manufacturing sector switches to using Lean production systems. Post Fordism comfortably explains the decline of Fordist production systems in the developed world and its requirement for a paradigm shift in manufacturing structures. Winsor (1992) clearly states that manufacturing should be fixed not discarded. This illustration of a manufacturing based future differs from the Neo Schumpeterian approach of Post Fordism presented by Amin (1994) where economic history is portrayed as a series of five Kondratievs’s or long term economic waves. The fourth Kondratiev closely resembles Fordism. The fifth Kondratiev is described as an innovation and knowledge intensive service driven “cybernetic macroeconomy”. An explanation comes from Amin (1994) who suggests that within the Post Fordism debate there is a dispute about the meaning of the term Post Fordism.
The Neo Schumpeterian model resembles the post-industrial paradigm and thus differs from the Post Fordism argument. Figure 2 illustrates the Post Industrial Paradigm; where economic history is considered to exist in 4 distinct stages: Pre Industrial, which is an agricultural-based economy with no manufacturing sector. The Industrialising period represents the introduction and growth of a manufacturing sector. The Industrial period is similar to the Fordist period in the Post Fordist Paradigm where mass production of consumer goods takes place. The Post Industrial period is where manufacturing production and exports decline to be replaced by growth in the service sector driven by advances in knowledge and technology.
Winsor’s definition of Post Fordism fails to explain the growth of the service sector in the developed world, representing 66% of GDP of high income (post industrial) countries compared to 35% of GDP of low income (industrialising) countries (World Bank 1995). Winsor (1992) looks to the Post Industrial paradigm to show that the world is in a post-industrial reality and the application of Post Fordist Solutions is hindering the development of the knowledge-based economy. In examining the claims of a worldwide decline in Fordist and Taylorist production systems this explains the decline in developed world manufacturing and the growth in the service industry. It also undermines the Post Fordist argument constructed upon the premise of a manufacturing based economy. This paradigm is also consistent with the persistence of Fordist and Taylorist production systems in the developing world as part of an international division of labour.
UK manufacturing company Dyson moved its manufacturing plant to Malaysia because of lower labour costs (BBC News 2002). The research and design elements of the company remained in the UK creating more service sector jobs to replace the manufacturing jobs lost. This is part of a growing trend: OECD Foreign Direct Investment Outflows rose to a record US$1.7 trillion (OECD Investment News June 2007) while the ratio of exports among OECD countries increased from 9.5% in 1960 to 20.5% in 1990 (Kiely 1998).
Post Fordist production techniques require closer proximity between producers, suppliers and consumers, which is difficult to reconcile to the globalising tendencies of transnational companies. Kiely (1998) suggests that Post Fordism is incompatible with the globalisation thesis.
Post Fordism has difficulty explaining the increase foreign direct investment in developing countries through lean production techniques when the international division of labour can ensure that Taylorist production methods may persist in countries with a competitive advantage in labour intensive production (Rustin cited by Hetrick & Boje (1992), Kiely 1998).
The persistence of Fordist and Taylorist production methods is not confined to developing countries through foreign direct investment. McDonaldization is a term coined by Ritzer (2008) to describe “the process by which the principles of the fast food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world” (Ritzer 2008 p1). The four dimensions of McDonaldization are Efficiency, Calculability, Predictability and Control; these are applied to both the product and the worker. Ritzer identifies Fordism and Taylorism as the precursors of McDonaldization and suggests that standardised routines, homogeneous products and workers, deskilling and efforts to increase productivity are characteristics of all three. McDonalds, a transnational company with globalising tendencies operates more than 31,000 restaurants in 119 countries employing more than 1.5 million people (McDonalds 2007) and coexists with Post Industrialisation by applying these methods to both the manufacturing and service sectors where simple non creative scripted tasks are performed. (Ritzer 2008). Aglietta cited by Amin (1994) discusses the application of Fordist Methods in the service sector to raise productivity. Contrary to a Post Fordist claim of a decline in Fordist and Taylorist production systems, McDonaldization suggests that Taylorism has moved “from shovelling pig iron to shovelling chips” (Williams 2007) in the fast food sector and the principles have been adopted in increasing sectors throughout the world.
Figure 3 outlines some of the similarities between the Accountancy profession and McDonalds. The writer is familiar with the accounting profession and has chosen it to illustrate how Fordist and Taylorist methods have found homes within the growing service sector. The Accountancy profession has benefited from the growth in the service sector that has accompanied the demise of Fordism in the manufacturing sector (Hanlon 1996).
|Task||Flipping Burgers||Checking Bank statement to Account Records|
|Guidance||McDonalds Bible||Audit Manual|
|Timekeeping||Clocking in Card||Approved Timesheets|
|Division of Labour||Yes||Yes|
|Enforced Dress Code||McDonalds Uniform||Suit|
|Emphasis on selling additional products/services||“Would you like fries with that?”||“We can provide additional services”|
Figure 3 Comparison of McDonalds/Audit Practice (Source (McDonaldization of Society 2008, Personal Experience ))
Like the fast food sector the industry is dominated by a small number of transnational companies (known as the Big 4) with established neo Weberian bureaucracies and rigid hierarchies enforcing sophisticated forms of control to standardise behaviour including and not limited to the use of a professional language (Anderson –Gough, Grey and Robson 1998), the construction of a professional identity (Kirkham & Loft 1993) and ongoing performance surveillance. An example is the use of weekly task summaries requiring approval by a supervising member of staff.
McDonaldization succeeds where Post Fordism fails by reflecting reality that is consistent with the Globalisation and Post Industrial phenomenon in the world accommodating the growth of Lean Production methods where applicable.
Post Fordism as Winsor (1992) portrayed it explains the decline in Fordism and Taylorism in the developed world and the rise in lean production techniques that accompanied it. Its use beyond that is considered by many commentators to be limited: Hetrick and Boje (1992) say that “engaging in anything remotely resembling a theoretical or conceptual closure should be avoided” (1992 p50). Kiely (1998) argues that with no clear analysis it is prescriptive instead of an analytical theory. Amin (1994) rejects the literature as a universally accepted theory of transition considering it to be a debate.
The Post Fordist debate forms part of the explanation but not all of it. Rustin is cited Hetrick and Boje (1992) as saying “Post Fordism is better seen as a one ideal typical model or strategy of production and regulation co-present with others in a complex historical ensemble” (p61)
Post Fordism is useful as one of many models within an ensemble of theories used to explain the globalised post-industrial landscape of the twenty first century. The inability of Post Fordism to accommodate the persistence of Fordist and Taylorist practices exemplified in McDonaldization limits its use as transition theory.
The recent financial crisis exemplifies how the short-term strategies designed to maximise returns to capital can have adverse affects on long term growth. The Post Fordist argument is important because of its call to action in changing the way that work is done. Advances in information and communication technology provide more scope for this flexibility. However as long as an economy is organised within a free market system there will always be incentives for increased efficiency and productivity. Fordist and Taylorist production methods will have a role. Perhaps this period should be called Neo Fordism (Amin 1994) to stress the strong continuity with Fordism and to reflect the ability of Fordism and Taylorism to coexist with other production systems. McDonaldization demonstrates the enduring qualities of Fordism and Taylorism to traverse sectors and economies.
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FORDISM, SCIENTIFIC MANAGEMENT AND THE LESSONS FOR CONTEMPORARY ORGANISATIONS
Fordism and Scientific Management are terms used to describe management that had application to practical situations with extremely dramatic effects. Fordism takes its name from the mass production units of Henry Ford, and is identified by an involved technical division of labour within companies and their production units. Other characteristics of Fordism include strong hierarchical control, with workers in a production line often restricted to the one single task, usually specialised and unskilled. Scientific management, on the other hand, originated through Fredrick Winslow Taylor in 1911, and in very basic terms described the one best way work could be done and that the best way to improve output was to improve the techniques or methods used by the workers. (Robbins p.38)
Many comparisons can be made between the two theories, such as the mechanisation, fragmentation and specialisation of work and that a lack of intellectual or skilled content will speed up the work at hand. Fordism's mechanisation of mass production further emphasised many of Taylor s popular beliefs about management being divorced from human affairs and emotions, using humans as instruments or machines to be manipulated by their leaders (Hersey p.84). Fordism fused and emphasised the scientific methods to get things done by Ford s successful mass-production processes. Contrasts also exist between the two theories. Fordism dehumanisied the worker whereas scientific management convinced the workers that their goals could be readily achieved along with their employers goals, therefore they should all work together in this direction. Fordism suited industrial companies participating in mass production, whereas Scientific Management could be used in many types of organisation. Large companies such as Ford Motors, The Reichskuratorium fur Wirtschaftkichkeit (RKW) in Germany examples these theories in practice. These theories of the past are lessons for the way modern organisations are run today. Managers now realise that they should treat their workers more democratically and since the mid-70 s, sweeping changes in markets and technology have encouraged managers and manufacturers to use greater product diversity and more flexible methods of production. Movements towards a more flexible organisation have become apparent. Examples of orgainisations such as Nissan, NASA and Toyota serve as modern day examples of post-Fordism and depict movement towards a modified Scientific Management.
Comparisons that can be made include Fordism's mechanisation of mass production and Taylor s attempts at using employees as machines. Taylor designed this using his principles of management that included developing a science for each element of work and finding the quickest way the job could be done. Henry Ford s ideal types of Fordist production system included using fixed and dedicated machines in individuals work, rather than turning the employee into a machine. (Hollinshead 1995)
With Taylor attempting to prove to the world that there was a science to management and that the quickest way was the best way, he attacked the incompetence of managers for their inefficiencies in running the railroads and factories. Using time and motion studies, Taylor achieved productivity increases of up to 200 per cent. (Dunphy, 1998, p.4). His thoughts were echoed by others: during a 1910 Interstate Commerce Commission hearing, Louis D. Brandeis argued that US railroads could save a million dollars a day if they introduced scientific management into their operations (Oakes, 1996). Taylor showed the world that the methodical and scientific study of work could lead to improved efficiency. He believed that by defining clear guidelines for workers many improvements could be made to the production of goods. Fordism like Scientific Management in the newly mechanised industries of the early 20th century emphasised that efficiency came from precision in job design, clear division of responsibilities and tight policing of implementation (Taylor, 1911). Taylorism and Fordism were consistent with notions of the organisation as a military machine first developed by Frederick the Great of Prussia, and later refined by Henri Fayol . (Taplin, 1995, p.430)
Scientific Management encouraged firms to improve efficiency by analysing individual processes of industrial production and then recreating them to produce maximum output from any given size labor force. (Hudson, 1997) Ford's production-line innovations compounded scientific management s efficiencies into the economy. Taylor believed it would be best to scientifically select, train, teach and develop the workers. (Robbins, 1997) However, in contrast, Fordism was based on mass production using semi skilled workers who could be easily replaced. Fordism did not care for the workers to work as a team and to Heartily co-operate to ensure that all work is done in accordance with the principles of science like Taylor s ideas of scientific management did (Robbins,1997, p.40). Although Fordism borrowed many scientific management ideas, it then advanced upon them to produce a new form of management that included management having hierarchical authority and technical control. Fordism enabled managers to regulate production and safeguard their own position within firms as well as meeting the efficiency criteria set by owners.
The obvious efficiencies of Fordism and features that were responsible for the economic successes of this system, also caused problems. Fordism proved particularly suitable to manufacturing in a mass consumption economy, required only occasional innovation of new products and used machines that only made specific goods. Often, these were of low-quality, low-value, high-volume nature, and competition was price based. Low quality could easily become poor quality; workers were poorly motivated with resulting high labor turnover and absenteeism; and coordinating the flow of materials through production processes was difficult (Wood, 1993). Fordism led to massive increases in productivity in certain industries, but the human cost was significant. At one point Henry Ford's assembly lines had an annual employee turnover of 380 per cent (Encarta, 1998). Fordism alienated workers and allowed no creativity. Where scientific management looked to divide work and responsibility almost equally between management and workers, Fordism was after minimum discretion between management and workers with fragmented work and minimal tasks for employees.
Examining what happened at the Ford Motor Company supports these facts. In 1913 Ford began using monotonous assembly-line techniques in his plant. Although assembly-line techniques greatly increased productivity, many people soon left their line jobs, because of the unpleasant monotony of the work and the repeated increases in production quotas. This is something that contemporary management techniques have realised; it is beneficial for employees to become involved within their jobs and not expected to be machines. Ford partly overcame this problem by doubling the daily wage then standard in the industry with his famous offer of $5 a day to workers who would put up with the alienated, regimented work conditions at Ford Motors (Clark, 1997). One worker said, You ve got to work like hell at Ford s... You can t let up. You ve got to get out the production and if you can t get it out, you get out (Rupert, 1997, p.11) His results were increased stability in Fords labor force and a substantial reduction in operating costs. Then the Model T automobile was introduced in 1908. With the help of this model, Ford became America s largest automobile producer and vendor. Nevertheless throughout the 1930s Ford began losing business to his competitors, mainly because they were slow introducing new models of automobiles every year. (Encarta, 1998)
Scientific Management and Fordism created a new type of revolution . The promise of massive increases in productivity led to the following of Fords and Taylor s models of management all over the world. Britain never had a scientific management movement like that in America, and the leading British engineering journals in the early 20th century revealed Taylorism receiving attention, much of it positive. Engineering became an unqualified supporter of scientific management, only The Engineer, a journal of engineering at the time, maintained sustained hostility to Taylorism declaring it was unfair and inhuman and not "sportsmanlike." The Engineer criticised the separation of workers thinking in their jobs from doing their jobs and described Taylorism as "scientific management gone mad. (Whitson, 1997)
Another organisation that followed both the American models of Taylor and Ford, was The Reichskuratorium fur Wirtschaftkichkeit (RKW) founded in 1921. This huge Berlin-based electro-technical and machine-constructing conglomerate strove to implement measures of industrial and organisational efficiency in Germany in the inter-war era. RKW s aim was to implement technical and organisational measures of industrial, and economic efficiency, an organization devoted to industry; efficiency, and production standardization. (Shearer, 1997, p. 569)
In modern times, firms have attempted to reconfigure work places and production systems using flat hierarchies and lean production systems in contrast to Scientific and Fordist management. Managers presume that these sorts of changes will enable firms to achieve flexibility, seen by many managers as essential to maintaining competitive advantage into and beyond the 21st Century. Flexible production systems opposing strict Fordist lines, made possible by these organisational changes and new technologies, permit shortened product development time. There is a new way of organising production and a departure from Fordism and all it contains.
However, scientific management was used by Japanese automobile constructors in the 1970s when they began to compete using fundamentally improved manufacturing processes that consistently produced vehicles of higher quality far faster than Detroit (Oakes p.569). Japan car manufacturers successfully decreased labour and production costs giving American Manufacturers a run for their money, Japans Toyota is an example that used Fordism as a base of new managerial processes.
Another modern day example, which drew on these two management methods, was in space science. NASA developed a set of measures to assess if they were implementing their own strategies. NASA's strategy, defined by the motto cheaper, faster, better, was to reduce the size and cost of space probes without eliminating any important missions. Figures show that the two missions to Mars launched in late 1996 were each one-fifth the real cost of previous Mars missions (under $200 million in 1996 dollars, as opposed to an average of $1 billion each for the previous eleven U.S. spacecraft launched for Mars) . (Oakes, 1996, p.589)
Post-Fordism has been described as a shift to the new information technologies;[a] more flexible, decentralized form of labour process and of targeting consumers by lifestyle taste and culture rather than by categories of social class [as well as] a rise of the service and white-collar classes and the feminization of the workforce: These are lessons managers have learnt and result in less rigidity and mechanisation and a reduction in the blue-collar masculine workforce. The firms that face the most difficulties in the new globalised marketplace are often those with labor intensive, standardised manufacturing processes. Companies emphasise that these new forms of work provide better jobs. For instance, Nissan projects an image of work as taking place in an empowering environment built around the themes of flexibility, quality and teamwork. (Hall, 1991, p.58)
In conclusion, both Fordism and Scientific Management share common themes yet also display some significant differences. They both encourage looking at the fastest way work can be completed and impose strict guidelines upon employees and their job descriptions. This has led to a great deal of dissatisfaction among employees in production lines with alienation and monotony of workers that encouraged a high turnover of employees at organisations that imposed these techniques. Henry Ford developed much of his conceptions upon Taylor s ideas of scientific management. These theories imply that contemporary organisations and their managers should take into consideration the ideas of employees to avoid division. Managers today often see workers as multi-skilled and more involved in the process of production via teamwork, the reintegration of manual and mental labour, and the empowerment of production workers. Today s mass production has seen technology wiping out many of the jobs once held by these employees. There is a movement towards a more flexible workplace in the wave of this new technology away from strict guidelines imposed upon workers and their job descriptions, they are now encouraged to learn about other areas of the workplace. Fordism and scientific management have greatly influenced our workplace today and their theories will continue to be built upon for years to come.
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