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As inventor of 'scientific management' (Hoopes, 2003), Frederick W. Taylor (1856-1915) was a significant person. After leaving school, he came to work at a steel company, Midvale Steel. With the ongoing revolution he noticed that with the introduction of machines productivity increased however to distinguish a company productivity must not stop there. He looked at how to create more productivity out of the employees.
In order to create more productivity Taylor started studying the aspects of time and motion of the production process. As foremen at Midvale Steel he started measuring the time which was needed to conduct certain tasks. He wanted to change the mentality of the workers to carry out more work in less time with the same reward because 'men will not do an extraordinary days work for an ordinary day's pay' (Kanigel, 1997). So he let the workers make 10 axes each day and when they did not reach that amount, they would be paid much less. Taylor was convinced that a higher pay is the main motivation of workers (Hoopes, 2003).
After leaving Midvale Steel he began to invest in a paper-making company, this became a disaster due to an economic panic of 1893 and lost lots of assets (Karsten, 2010). In 1898 Taylor was hired by Bethlehem where he got his greatest success, he started to study the shoveling of iron ore. He noticed that the shovel they were using was not adequate for iron ore, only for coal. So he started to develop a new shovel which had a bigger load. He claimed that 'production more than tripled and costs fell and wages rose'. (Hoopes, 2003). Taylorism conducted productivity in an inhumane way, production were being simplified, standardized and formalized (Hoopes, 2003).
Gilbreth studied also productivity and his studies were similar to Taylors. However as Taylor focused more at the aspect of time Gilbreth focused more on the study of motions. This study looked at the bricklaying companies. During his study he noticed that reducing certain movements could reduce wasted time and improve the productivity (Karsten, 2010). So he invented the 'Gilbreth Scaffold', in order to reduce movements of picking bricks up. These improvements let to a decrease from 18 till 4 ½ movements (IW/SI News, 1968). This also led to machine-like working methods which thought of workers as human robots which had to execute certain tasks (Hoopes, 2003).
Taylor and his disciples, like for instance Gilbreth, were of great influence to their environment and a great inspiration to others which would study management. There were many criticisms about the way Taylorism treated the workers. However, after Taylor studies began to look more at the humane aspect of management and the working environment, but still Taylorism was the foundation of modern management and Taylor is seen as the 'Father of Scientific Management' as engraved on his gravestone (Hoopes, 2003).
Although Henry Ford (1863-1947) has been severely criticized for his anti-Semitic campaigns and his admiration for Hitler (Jardim, 1970) he has simply been extolled for the system that he introduced at the Ford motor company. A system that became known as Fordism. The low price of his model T changed the United States (Wicks, 2003), that is: for the first time in history (his) factory workers were able to buy automobiles, and as a result became more mobile. However, Ford had to implement new ideas and improve existing techniques to be able to produce the model T affordability.
The most significant changes were specialization, standardization, sequential production, the moving assembly line and the five dollar day (Casteel, 2009). In addition, Ford increased the efficiency of his company by specializing his workforce, that is, he carried on with Taylor's work by breaking down complex processes and turn them into simple jobs. As a result, the employees performed a single function in which they became specialized (Naruse, 1991).
Moreover, the moving assembly line putted pressure on the workers because subsequent tasks could not be performed without the previous ones (Casteel, 2009). Hence, this system was and is criticized for its inhumanity and rigidity (Naruse, 1991). However, it was not Ford who organized the sequential production but one of his employees (William Klann). Klann thought of it after he visited the slaughtering house were the carcasses were moved by a conveyor. So he broke down the entire process of building coils and later on introduced sequential production throughout the entire factory (Brinkley, 2003). As soon as this new form of production was incorporated in the linear assembly line, where parts were added, it resulted in significant reductions in the time required to move parts and automobiles (Casteel, 2009).
In order to increase efficiency even more, Ford extended another concept of Taylor, he continued to standardize parts so they no longer would not have to be custom-made. Thereby launching the process of vertical integration which would become one of the main characteristics of the company decades later (Norcliffe, 1997).
Nevertheless, this is merely half of the story: although Ford dramatically increased efficiency, factory-workers still could not buy his cars because they only earned one dollar per day (1914). However, Ford raised the minimum pay, the average pay of his workers was $2.34, to five dollar a day (Wicks, 2003). This is called the 'high wage doctrine', in order to stimulate demand he paid his workers higher salaries. In addition, it was also a measure to stimulate efficiency: Ford did not decide to lengthen the workday or to cut salaries but he did the opposite, he shortened the former and increased the latter. This while many other firms did the contrary. Moreover, Ford argued that there is a positive relationship between productivity and wages (Taylor, 2003), and time proved him right. In 1914, one year after the introduction of the five dollar day, productivity rose 40 to 70 percent, profits increased by 20 percent and turnover fell from 370 percent in 1913 to 16 percent in 1915 (Raff and Summers, 1987).
(Slichter, 1921, p. 244)
However, the turnover rates suggest that Ford had a third motive for the five dollar day, with a turnover rate of 370 percent in 1913 he was facing a serious challenge, the great majority of his most employees were inexperienced and thus inefficient (Slichter, 1921). Though, it was a problem which he could resolve by offering his employees a significant raise.
Notwithstanding, one could conclude that Henry Ford had a profound effect on the structural organization of the time: he introduced new processes and improved other processes were Taylor had started. Moreover, these structural changes can be found in modern companies, as well as his believe that "prosperity and happiness can be obtained by honest work" (Ford and Crowther, 2005: p. 3).
Evaluation of the Key Differences Between Taylorism and Fordism
Taylor conducted productivity in an inhumane way because production was simplified, standardized and formalized. He was studying the shoveling of iron ore when he noticed that the shovel the workers were using was too big for the weight of iron ore. The men used the same shovel for coal for which it was basically created. So he developed a new shovel with which they could move a smaller volume of iron ore and hence increased the speed of shoveling.
Fords main changes were specialization, which means each worker had to do one specific job in order to increase routine. He used standardization to simplify the work and accelerate the production process. Sequential production and the five dollar day were also timesaving and production increasing changes, Ford implemented.
His most significant change came with the introduction of the assembly line. This meant that workers were forced to maintain a certain speed because if they miss one part others could not continue the process. Ford was able to increase the efficiency of his company by specializing his workforce, which was introduced by Taylor's breakdown of complex processes into simple jobs.
One of the Key differences between Taylorism and Fordism is, that Taylor made the workers able to do their work faster, because of the improved shovel. What Ford did was that he let the assembly line run fast, so that the workers had to keep up so there was no interruption. They were forced to work fast. Taylor made the workers able to work fast, and Ford forced the workers to work fast.
They both aimed for an acceleration of productivity but Taylorism focuses more on the development of the workers (less movements) and Fordism concentrates mainly on the development in the process (assembly line). So they were both aiming for time saving but they had a different view on how to achieve this.