Industrial Revolution: Business and Production Models

Posted on Mar 18, 2025 in Social sciences

Organization of Business and Productive Models

Consequences of the Industrial Revolution

  • Demographic Shift: Transfer of population from the countryside to the city (rural exodus).
  • International migrations.
  • Sustained population growth.
  • Large differences between peoples.
  • Economic independence.

+Economic Serial production Development of capitalism:

  • Emergence of large companies.
  • Unequal exchanges.

+Social:

  • The proletariat is born.
  • The Social Question is born.
  • Environmental: Deterioration of the environment and degradation of the landscape.
  • Irrational exploitation of the land.

The application of science and technology allowed the invention of machines that improved production processes.

  • The depersonalization of labor relations: it is passed from the family workshop to the factory.
  • The use of new energy sources, such as coal and steam.
  • The revolution in transport: railways and steamboat.
  • The emergence of the urban proletariat.

Classic School

“A man who thinks is counterproductive.”

“Man is the prolongation of the machine.”

  • One best way.
  • Social Darwinism.
  • Context of change.
  • 1720-1850.

Planning -> Organization -> Direction -> Control

Scientific Management

  • Frederick W. Taylor.
  • Henry Ford.

Scientific Management (Taylor)

  • Rationalist base of homo economicus.
  • New style of management and organization of work through systematic analysis and control.
  • Rationalize and standardize activities by decomposing tasks into an ordered series of simple movements.
  • Separation of the conception and programming of the simple execution of the work.
  • Super specialization of work.
  • Special emphasis on controlling and coordinating work through the hierarchical personal relationship.

Proposals:

To link salary with production –> The conflicts between entrepreneur and worker are over since now they do not have antagonistic interests, but they cooperate.

Fordism

Introduction of the assembly line.

Henry Ford (1863-1947):

  • Reduced the workday in his factory to eight hours a day.
  • Creator of the first major chain manufacturing processes, a movement known at the beginning of the century as Fordism.
  • Use of the assembly lines to achieve greater productivity and followed criteria of vertical and horizontal integration.
  • Improvement of wages.
  • Reduction of working hours.
  • Improvement of environmental conditions in the factory.
  • Creation of free schools for children of staff, for apprentices, and for teaching English and organizing cultural and sports activities.
  • Creation of a salary system based on bonuses that reward productivity and good work behavior.

Coercive logic –> Decrease of quality and benefits.

NUMMI: Authoritarian management and standardization –> Repetitive tasks needed by the standardization –> Lack/reduction of interest and creativity –> Dysfunctional behaviors.

Elton Mayo

  • There is a desire to get along with classmates.
  • Role of emotions.
  • Economic self-interest is the exception, not the rule.
  • Everyone has to cooperate if civilization wants to survive.

Hawthorne Experiments

Unexpected Results:

All experimental groups, regardless of the intensity of the light, increased their productivity. The company asks for the collaboration of Elton Mayo who from then on will direct one of the longest investigations in the history of the company that give rise to an organization model known as Human Relations.

Operators were asked to participate; their ideas, suggestions, and comments were taken into account in an unsuspected climate of freedom. They were treated responsibly and not as mere machines.

Conclusions from the Experiments:

  1. Importance of latent psychological factors => Existence of other reasons that are not economic.
  2. Influence of the group (informal relations). Rules are established regarding the pace of work.

Contributions from this School

  • Homo economicus overcoming – Other social motivations.
  • Need to overcome alienation through recognition and make it a participant in the company.
  • Group as a unit of basic analysis.

“The worker can be a valuable resource in the company, but only if he or she is treated as a person.”