§1.No humanist treatment of modern industry can ignore the recent advances of scientific methods into the regulation both of standards of production and standards of consumption.In both arts alike the crude empiricism of the past is giving place to a more ordered, conscious rationalism.As is only natural, the advance of science is more rapid in the productive arts.
In recent years many scattered attempts have been made to apply physiology and psychology to economic processes.Business men by scientific observation and experiment have brought criticism to bear upon the traditional and empirical modes of organising and conducting businesses.The more or less hand-to-mouth methods which were possible in small businesses where the manager was owner, and could keep a close personal supervision of his employees and all their work, were found increasingly unsuitable to modern types of large capitalist business.It was necessary to devise regular methods for correlating the work of the different departments, and for enabling a single central purpose to operate by complex delegation through several grades of subordinate officials with automatic checks and registers.More accurate methods of book-keeping, especially of cost-taking, were devised;experiments were made in bonuses, profit-sharing, fines, pace-making and various modifications of the wage-systems applied to evoke more energy, skill, or care from the workers and officials; hours of labour and shift-systems were subjected to measured tests.Still more recently the detailed technology of manual and mental labour has been made material of physiological and psychological investigation.Scientific Management has become a conscious art.Business colleges in America and germany give courses of instruction in this art, and a new profession has arisen of expert advisers who are called in as specialists to diagnose the deficiencies or wastes of industrial or financial power in particular businesses and to prescribe remedies.
Economic progress, regarded from the standpoint of the business man, consists in getting a given quantity of saleable goods turned out at a lower cost of production.That cost of production consists of the salaries and wages paid to various grades of employees for mental and manual labour, cost of materials and power, standing expenses for maintenance of plant and premises, including replacement and insurance, and interest upon capital.
Anything that reduces any one of these costs, without a corresponding increase of another, is profitable from the standpoint of the individual employer, or of all employers in the trade, if it be generally adopted, or of the consuming public, if it wholly or partly goes to them in lower selling prices.Where the reduction of costs simply takes the shape of reduced wages for the same work, however, it causes no net increase of concrete wealth, but merely distributes the same amount (or less by reason of reduced efficiency of labour) in a different manner.Such a reduction cannot then be regarded as economic progress, from the national standpoint.
But every other reduction of cost carries with it prima facie evidence of a net increase of concrete wealth.Inventions of machinery, improved chemical or other treatment of materials, better business organisation and subdivision of labour, improved skill and energy in employees, better book-keeping, credit, marketing arrangements, -- all such technical improvements promote the increase of concrete wealth.In all these ways many great advances have been made in various industries.But, alike in invention and in organisation, too much has been left to chance, or to the pressure of some emergency, too little is the result of ordered thought.Business has been conducted too much in the spirit of an art, too little in that of applied science.
The modern tendency is to introduce the exacter methods of science.The modern large manufacturing or mining enterprise employs expert engineers and chemists, not only to test and control the operation of existing processes, but to invent new and cheaper ways of carrying out a process, to discover new products and new uses for by-products.It employs expert accountants to overhaul its book-keeping and finance and to suggest improvements.Initiative and economy are to be studied, evoked and applied along every path.
§2.But until lately the detailed organisation of labour and its utilisation for particular technical processes had received little attention in the great routine industries.Even such technical instruction as has been given to beginners in such trades as building, engineering, weaving, shoemaking, etc., has usually taken for granted the existing tools, the accepted methods of using them and the material to which they are applied.
To make each sort of job the subject-matter of a close analysis and of elaborate experiment, so as to ascertain how it could be done most quickly and accurately and with the least expenditure of needless energy, comes as a novel contribution of business enterprise.To get the right man to use the right tools in the right way is a fair account of the object of Scientific Management.At present a man enters a particular trade partly by uninstructed choice, partly by chance, seldom because he is known by himself and his employer to have a natural or acquired aptitude for it.
He handles the tools that are traditional and are in general use, copying the ways in which others use them, receiving chance tips or suggestions from a comrade or a foreman, and learning from personal experience how to do the particular work in a way which appears to be least troublesome, dangerous, or exhausting.Both mode of work and pace are those of prevailing usage, more or less affected by machinery or other technical conditions.
The scientific manager discovers enormous wastes in this way of working.
