Frederick w. taylor's 1899 pig iron observations: examining eact, eiction, and lessons eor the new millennium

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^' Academy of Management Journal 20(10. Vol. 43. No. 6. 1283-1291.

CHARLES D. WREGE Cornell University RICHARD M. HODGETTS Florida International University Taylor's pig iron observations at Bethlehem Iron in 1899 are often cited as an example of how scientific management helpedincrease industrial efficiency. The current research, relying almost exclusively on primary sources, reveals that Taylor's famous pig iron anecdote was erroneous. Additionally, this article offers lessons and guidelines for managers in the new millennium. Although Frederick W. Taylor's impact on management cannot be denied, whether his work always represented the use of science to solve managementproblems is questionable. George has said that Taylor believed "to maximize output with a given level of effort . . . the scientific method had to be applied to worker selection, job determination, creation ofa proper environment, and so on, to determine properly the task for each man" [1972: 93). This concept of a scientific, research-based approach in management practice was not new (Hoagland, 1955).For example, in Poland in the late 1890s Karol Adamiecki was developing work flow network diagrams to solve production problems in local factories [Marsh, 1975). However, Taylor did impress his audiences by describing the apparent use of scientific methods to reduce costs and to create prosperity for the workforce. More importantly, his claims were readily accepted by practitioners and scholarsuntil almost 75 years later, when they were challenged by Wrege and Perroni [1974). These authors focused on how Taylor's account of his study of pig iron loading at the Bethlehem Iron Company continually changed in the years from 1901 to 1911. However, they did not attempt to study the details of pig iron loading or whether the company or the workers actually prospered from the piece rate systemthat Taylor recommended. The current research focuses on these latter three aspects of Taylor's work. The reason for the continued acceptance of Taylor's observations largely lies in the persistent reliance of management scholars on published sources (usually those appearing in management publications) rather than on original documents prepared at the time of the actual events Taylor described.1283

Unfortunately, for the majority of the readers of management publications, the printed word has an aura of authenticity that is seldom questioned, and original documents are neglected. This study draws on original documents and presents an analysis of what really happened during the famous pig iron observations of 1899. It also presents lessons to be learned by researchers in general andmanagement scholars in particular.

BACKGROUND Management history is replete with anecdotes regarding the work of prominent people. Yet perhaps no story is more famous that that of Frederick Taylor's pig iron observations, which were conducted at the Bethlehem Iron Company of South Bethlehem, Pennsylvania, in March-May 1899. Taylor had come to Bethlehem at the behest of Robert Linderman, presidentof the company, to reduce costs by introducing a piece rate system [South Bethlehem Globe, 1898; Taylor, 1898). When Taylor arrived at Bethlehem, pig iron was selling at $11.50 per long ton [2,240 pounds) [Hobson, 1899), and the company had 10,000 tons on hand. However, it was waiting for a better price before selling. By March 1899, the price had risen to $13.50 per long ton [Iron Age, 1899), andthe company quickly sold its inventory and began preparations for loading the iron onto gondola cars for shipment. At this point Taylor decided to take advantage of the opportunity to study pig iron loading for the purpose of lowering loading costs, as well as to secure data for a book he was preparing on time and performing work. He assigned two of his assistants, James Gillespie and Hartley...
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