Henry Ford and the Model T have long been symbols of the modern industrial age. Even the subsequent growth and success of Ford’s rival, General Motors was due in large part to GM’s need to find an innovative response to the Model T. In large measure the managerial approach of Henry Ford, as well as his preferences in managerial theory, is paradigm of much that was constructive and much that was imperfect in early approaches to management.
The son of a poor Irish immigrant, Henry Ford was born in 1863 and grew up on a farm in rural Michigan. He was fascinated by machinery and was quite skilled in repairing and improving almost any machines. He started the Ford Motor Company in 1903 and by 1908, the Model T was built.
In the early part of the century when automobiles were introduced they were a symbol of status and wealth, the near exclusive province of the rich. Ford intended to change that: the Model T was to be for the masses – a car that virtually anyone could afford. He understood that the only way to make such a car was to produce it at high volume and low cost. Ford focused his factory efforts on efficiency, mechanizing wherever possible and breaking down tasks into their smallest components. One worker would perform the same task over and over, producing not a finished part, but one of the operations necessary for the production of the whole; the incomplete part would then be passed on to another worker, who would contribute a successive operation. Ford was able to achieve remarkable efficiencies: Although the first Model T took over 12 ½ hours to produce, only 12 years later, in 1920, Ford was producing one Model T every minute. By 1925, at the peak of the car’s popularity a Model T was rolling off Ford’s assembly lines at the rate of one every 5 seconds.
However, mechanization of the plant had some adverse effects. The faster Ford pushed his workers, the more disgruntled they became. In 1913, turnover was 380 percent and Ford had to hire ten times more workers than he needed just to keep the line moving. In an action that at the time was unprecedented. Ford simply decided to double wages in order to get the best people and motivate them to work harder. In the days following the announcement that wages were being doubled, thousands and thousands of men came to the Ford plant in search of work. Police had to be called in to control the crowds.
When he died in 1945, Ford was worth over $600 million. He left an indelible mark on both American industry and society. His name is synonymous with mass production and the development of Modern management theory.
Most people associate Henry Ford with the Model T the affordable mass produced automobile that changed society. But Ford is also important as a management thinker because he developed ideas about how organizations function. Moreover, Ford hired theorists such as Frederick Winslow Taylor, and gave them the chance to develop their management theories.
People have been shaping and reshaping organizations for many centuries. Looking back through world history, we can trace the stories of people working together in formal organizations such as the Greek and Roman armies, the Roman Catholic Church, the East India Company ad the Hudson Bay Company. People have also long been writing about how to make organizations efficient and effective since long before terms such as management came to common usage. Two prominent and instructive examples are the writings left for Managements to follow:
1. An organization is more stable if members have the right to express their difference and solve their conflicts within it
2. while one person can begin an organization, it is lasting when it is left in the care of many and when many desire to maintain
3. A weak manager can follow a strong one, but not another weak one and maintain authority.
4. A manager seeking to change an established organization should retain at least a shadow of the ancient customs.