In 1776, Adam Smith published his famous book, The Wealth of Nations. In that book, he described some key economic and business principles that still hold true today. The first chapter of his book described the concepts of division of labor. His classic example describes the work processes and production of workers in a pin-making factory.
Smith described that making pins involved drawing out, straightening, cutting, and whitening wire, grinding points, and making and attaching heads to the wire. Several distinct operations were also required to make the heads. Completed pins also had to be bundled and packaged. In total, about 18 distinct tasks were required to make pins.
As described by Smith, novice workers who created pins entirely by themselves could each perhaps “make one pin in a day, and certainly could not make twenty.” Workers probably had to put on and take off gloves, locate and handle tools, move between workstations, and learn or relearn skills that had not been recently practiced. Extending Smith’s conclusions, a group of 10 novices working by themselves could produce no more than 200 pins in a day.
Smith also described the work of pin makers employed in a factory. Rather than working independently and performing all of the tasks by themselves, these workers functioned as a team and each performed only a few of the 18 pin-making tasks – which they did everyday. Smith estimated that the total daily output for this group of workers was 48,000 pins or 4,800 pins per worker each day. Smith gave three reasons for those tremendous gains in productivity.
When physical tasks are continually repeated, the body learns to automatically perform the motions with minimal concentration or mental effort – he called this dexterity of the worker. Smith also recognized that dividing labor does away with time wasted moving between work stations, locating tools, putting on equipment, and learning/relearning tasks. Lastly, by performing the same tasks day in and day out, workers can envision and construct machines to aid them in their work and to make production more efficient.
Smith suggested that the division of labor contributes to nations becoming wealthy and prosperous. He described that by everyone in a society working in a job where they could become specialists, the benefits of the division of labor would arise and considerable excess output would be produced. When division of labor occurs in every job and industry in a society, excess production would occur throughout all areas of society. By then trading the excess output of workers throughout society in a common marketplace, all people could enjoy more goods and services at lower prices than if they had all worked independently for all they needed.
In addition to the tremendous differences in output between Smith’s workers, there is another significant difference. The factory workers were organized. Organization requires a coordinating mechanism – or manager. To reap the benefits of division of labor, groups and organizations must have workers who specialize in defining jobs, training and supplying workers, and controlling the flow of work. Part of that specialization includes understanding the principles and benefits of the division of labor.
Hawthorne Studies
Efficiency is a big topic these days. With gasoline and energy prices at all-time highs, many people are looking to get the most out of every energy dollar. Some are trading in their gas-guzzling vehicles for ones that are more fuel-efficient. They want to travel further on each gallon of fuel they purchase.
The theories used to structure organizations and jobs through the Industrial Revolution and into the early 1900s were also very focused on efficiency. Companies wanted to maximize organizational output and simultaneously minimize the inputs to produce those outputs. In manufacturing, jobs were studied and tasks reduced so that each worker performed only a few distinct operations. With every worker in a factory doing one or two things over and over, workers became very efficient in their production. Employees worked long days with few breaks and had little chance to interact with others, make decisions, or give input to the production process. Workers were viewed as interchangeable parts of an efficient manufacturing machine.
Although very efficient in their production, the factories of the Industrial Revolution were rather unpleasant places to work. Performing the same repetitive tasks everyday was boring and monotonous for the workers and because many had no input in setting the terms and conditions of work, employees also tended to feel powerless and enslaved. Not until some groundbreaking research in the 1920s and 1930s did the traditional understanding of the relationship between efficiency and worker performance change.
From a multi-year study of workers at an assembly plant, known as the Hawthorne Studies, organizational researchers recognized the importance of paying attention to human needs and making workers feel valued. In a series of work-performance experiments, workers were allowed to give input to management decisions and permitted to interact with their coworkers (and thereby become members of a team).
The experiments manipulated the hours of work and the timing and durations of lunch and rest breaks. Performance was studied across the entire series of experiments. Researchers found that performance rose across each experimental condition – even ones giving workers longer breaks and shorter work hours. Traditional organization theorists would never have predicted this finding. It would have been like turning off an efficient machine for part of the day and getting more output from it than if it had been left on for the entire day. The findings caused managers and researchers to question their assumptions and beliefs about organizations, efficiency, performance
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
Basics of Management. Management concepts and theories. Definition of Management. Principles of Management.Management certification
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