Understanding Organisational Behaviour IB1230

ID: 1323413

Describe how either Taylor or Ford changed organisational management and workplace practices. Critically analyse how they continue to influence contemporary organizational behaviour

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1976

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1323413

20/01/2014

Understanding Organisational Behaviour IB1230

ID: 1323413

Introduction
“In the past the man has been first; in the future the system must be first.”
Frederick Winslow Taylor.
In the late 19th century, Frederick Winslow Taylor, known to many the forefather of scientific management, sparked the automation revolution, the third great transition in the history of

humanity (after the Neolithic Revolution, a result of the development of agriculture around
6,000 B.C and the industrial revolution in the 18th century) (Souza, 1999, p.1). However, it can be argued that Taylor’s greatest contribution to capitalism was not the revolution itself, but how Taylorism brought about the era of competition and syncretism with contrasting or corresponding concepts on organisational management and workplace practices, particularly
Fordism, which arguably extended the dynamics of Taylorism centered on the use of assembly line. This essay will examine how Fordism developed organisational management and modified workplace practices by exploring known historical application of its principles and theories. Thereupon, it will further analyse how elements of Fordism still exist in modern management sciences, taking example from Nike’s organizational system and Bangladesh sweatshops. How Fordism changed Organisational Management and Workplace Practices

First of all, it is essential to explore the pre-Ford era to understand the changes Ford instilled in workplace practices. The pre-Ford era mainly involved skilled craft workers operating general-purpose machinery with non-standardised parts to assemble small quantities of high quality products (Edgell, 2006, p.74). A real-life example of this is Ford’s first enterprise, the
Detroit Automobile Company, which its gasoline-powered delivery truck proved to be expensive, unreliable, and complicated to manufacture (Brian & Evans, 1995, p. 107). Ford influenced organisational management by introducing the assembly-line and deskilling its workers. As a distinctive type of labour practice, Fordism is a manufacturing paradigm that encompasses mass production based on moving assembly-line practices achieved with semiskilled labour, that is, a mass worker (Souza, 1999, p.4). This means each worker performed single and simple repetitive task in a progressive continuous flow. With this, Ford was able to maximize efficiency by splitting and deskilling its workers, thereby reducing training and labour cost (Giddens & Sutton, 2010, p.893). Through this process, Ford was able to propel the automotive industry from a lower quality and higher priced units by the Detroit Automobile
Company to a higher quality, low cost Ford Model T in 1908 (Bryan, 2012, p.1), thereby laying the grounds for future capitalist managers.

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Understanding Organisational Behaviour IB1230

ID: 1323413

Secondly, to further examine how Ford influenced organizational management, it is similarly paramount to study its preceding period. Before Ford instilled its concepts to its automobile factories, industries around the world practiced in what was called the “extensive mode of regulation”, characterized by a national bargain which pitted capital and the state against labour (Boyer and Saillard, 2002, p.20). Also, there was no distinction between ownership and control, resulting in difficulty in controlling large corporations (Souza, 1999, p.4). Fordist mode of regulation involved the separation of ownership from control in large corporations with a distinctive multi-divisional, decentralised organization subject to central controls, as well as recognition of trade unions (Jessop, 1991, pp. 136-7). By introducing efficient techniques of managerial control and supervision, Ford was able to effectively control its corporation in the macro level rather than micro. Furthermore, trade unions protected workers from exploitation and ensured fair wages, which in turn led to better working conditions and higher productivity.
Decline of Fordism and the arrival of post-Fordist/Neo-Fordist concepts

However, his standardisation principle was declined in the 1970s due to its most elementary nature. Ford’s repetitive simple methods meant that workers in Ford’s factory were inevitably deskilled, which proved detrimental to the country in the long run (Gramsci, 1950, p.44). This experience likely aggravated a negative reaction from its workers, despite their high salaries, which affected productivity (Ibid, p.44). Furthermore, the increasing intensification of work, deskilling, monotony and alienation lead to forms of resistance which affects the level of regulatory interest bureaucracy and increased costs regarding absenteeism, sloppiness and sabotage (Bonefeld & Holloway, 1991, p.8). Nonetheless, Ford argued (1991, p.142) that the factory organization did not aim at the slightest to prevent the development of ability, but rather to reduce the waste and losses due to mediocrity. Furthermore, his assembly-line production was proved very effective when Ford’s River Rouge plant became the largest integrated factory in the world, with production of cars grew exponentially from 14.00 in 1906 to 600.000 in 1916, fuelling the American prosperity and affirming Fordism’s effectiveness (Sturgeon and
Florida, 2000).

Due to its shortcomings mentioned and changes in global factors, the classical management conception was only successful until the 70’s (Souza, 1999, p.6). According to Regulationists, the Fordist model entered a structural crisis owed to several factors (Yagi and Yokokawa et al., 2012, p.131). Firstly, consumer behaviour was evolving and wanted more variations in goods produced which led to the demise of the assembly line method (Lane, 1995, p.63).
Secondly, the 1970s productivity rates were declining due to global inflation caused by the
1973 OPEC Oil shock (Ibid, p.65). US-Based transnational companies were over-producing
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Understanding Organisational Behaviour IB1230

ID: 1323413

due to the import penetration of US markets by European or Japanese, partly caused by the rise in value of the US dollar after the Bretton Woods agreement collapsed in 1971 (Harvey,
1990, p.60). Last and most importantly, there were great technological changes, most notably the computer-aided manufacturing, rendering Ford’s assembly line concept impractical.
Fordist model “became associated with rigidity and was pronounced to be unable to respond to respond to the new problems and challenges” (Lane, 1995, p. 64).
How Fordism influenced contemporary organizational behaviour

Due to these limitations and numerous world conditions such as the great technological changes and extensive globalisation, the capitalist world had to search for a new strategic orientations and organizational structure or a new production model (Lane, 1995, p.69). These new production models are now known as post-Fordism, a new system of economic production that is characterised by small-batch production, new information technologies, and emphasis on types of consumers in contrast to previous emphasis on social class, and specialized products and jobs (Hall, S., 1988, p.24). However, there is still an ongoing debate among scholars of whether elements of the Fordist regime-of-accumulation still co-exists with aforementioned post-Fordist concepts (neo-Fordism) (Ibid, 1988, p. 24).

Nike Inc. is considered to be the leading dominant figure of post-Fordist achievement by firstly fragmentation of Nike Inc.’s divisions (Katz, 1994, p.31). Being the leading shoe brand in the world, Nike employed several subcontracting-production arrangements that allow the company a high degree of flexibility in dynamic and fluid markets, which further increase pluralism and fragmentation, a notable post-Fordist industrial development (Ibid, p.32).
Furthermore, Nike’s primary method of production is using computer-aided design and engineering used in Beaverton, California, that not only allows the elimination of labourintensive and time consuming tasks, but also endless variation of product choices for consumers through their NikeID™, both notable features in post-Fordist theories (Ibid, p.54).

However, it can be argued that there are common denominators in the Fordism and postFordism. One may say that post-Fordist theories is a modified version of Fordism, designed to adapt to the new working environment of the world. From the aforementioned traits of postFordism in Nike, it has been identified that elements of Fordism exists in its workplace practices. For example, Nike Inc.‘s organizational culture still relies on vertical integration, a main trait of Fordism, to reinforce production (Stabile, 2003, p. 200). This is essential as Nike needs to be able to track and catalogue their produced shoes from all their production partners
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Understanding Organisational Behaviour IB1230

ID: 1323413

in several countries (Ibid, 2003, p.201). This necessity of reinforcing production made Nike to reinforce Fordist production values rather than decentralizing production to various or medium-sized enterprises (SMEs) (Katz, 1994, p.42). Essentially, some of the Fordist principles have been retained to support varying conditions such as Nike’s need to invigilate its manufacturers.

Having said that, there are still numerous areas around the world that continue to practice
Fordism’s assembly-line method. Wild & Jones (1991, p.391) found that the assembly-line production in developing countries is much more prevalent than elite occupations such as information processing, marketing, and product development. Furthermore, it is difficult to apply new technology and post-Fordist concepts such as mass marketing to underdeveloped countries without incurring a large corresponding loss of jobs and error (Ibid, p.388). One notable example are sweatshops in Bangladesh, home to a number of subcontracted manufacturers of several transnational companies such as Disney and Nike, where quality of life and education is low (Miers, 2003, p.22). Thus, Lal (1997) states that industrialisation has become identified with development in the Third World, and that most Third World people live in countries whose more abundant resource is just labour. Fordist method of cheap deskilled labour, coupled with the increasingly globalised world with palpable presence of foreign direct investment to developing countries, has been proved to successfully raise output, productivity, and incomes.

Conclusion

To conclude, Ford has unquestionably pioneered the automation revolution that led to the drastic change in organizational management and workplace practices. Through his methods of mass assembly-line that produced standardised goods, vertically integrated corporations, as well as decentralised organisation, Ford was able to increase capitalist efficiencies in the period of 1890 to 1970. However, it may be argued that Ford’s demise in the 1970s was not due to the flaws in its concept such as the increasingly monotonous organization of work or the contradictions of model of consumption, but rather to the changes in the world conditions such as technological advancement, worldwide inflation, as well as extensive globalisation that renders some of the Fordist concepts impractical and in conjunction spurring corporations to search for a new model of production (Lane, 1995). That being said, after careful consideration, I believe the period after the crisis did not abandon Fordist concepts entirely.

There are several stark differences that separate the two to accommodate the ever changing world situation. The Fordism model is dictatorial, with inflexible discipline, splitting the manual
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Understanding Organisational Behaviour IB1230

ID: 1323413

work from the intellectual and taking man as an accessory of the machine. Classical management control is performed by rigid supervision procedures. The “post-Fordist” model presents flexible authority and control systems by which passivity and compliance made spaces for dynamism and creativity, pertinent to contemporary fragmented niche markets.
While there are apparent changes in the way by which work is done and controlled, one can conclude that no evolution has occurred between Fordism and Post-Fordist theories.

It could be reasonably contended that management theories in Fordism and Post-Fordism both targets maximum rationalization of the production system, greater increase in productivity, profitability and competition (Souza, 1999, p.16). This partly explains why Fordist theories is still ever present in contemporary business practices if they are indeed beneficial to the firm. Further explanation of Fordism concepts in contemporary organizational behaviour is attributed to differing socio-economic conditions of various countries, as Fordism is found prevalent in developing countries due to its labour intensive resources and impoverished economy (Wild & Jones, 1991, p.391). It is worth noting that Fordist principles in developing countries have concerns pertaining corporate-social responsibility. While it was acceptable in the early 20th century, the Fordist methods of low-wage and mechanistic workplace practices are deemed unacceptable in the 21st century.

However, the rising intricacies of socio-economic environment in more developing countries where consumers demands are higher than before, paired with the ever changing technology, renders some of the core principles of Fordism obsolete to strive in better business environment. The world has transformed and globalised immensely in the past century, which requires corporations to modify business practices and organizational management in different business industry to accommodate these transformations. Post-Fordist theories have been proved to be effective as well as productive in meeting the demands of the current market and different working conditions. The necessity for these modifications was identified, addressed and made possible through the initial efforts of Ford and Taylor, who contributed immensely to constructive transformations and modifications in effective operation management. 6

Understanding Organisational Behaviour IB1230

ID: 1323413

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