Lillian Moller GILBRETH and Frank Bunker GILBRETH worked together on giving special importance to the worker rather than other factors and applying social sciences to industrial management. By “giving special importance” I mean, creating an easy and efficient ambient to work.
The most known study of Gilbreths is time-and-motion study. Time-and-motion study improved methods to get more efficiency from industrial employees and increase the output. Their method created a systematic meaning to identifying and analyzing the number of movements and the time needed to complete the stated mission. Gilbreths publisher three books about the task, which are Motion Study(1911), Fatigue Study(1916) and Applied Motion Study(1917). Gaining maximum economy of effort was viewed and their study provided important tools for the design of modern manufacturing systems.
Frank Bunker Gilbreth also applied motion-picture photography to the study of surgical operations firstly.
Gilbreths pioneered industrial engineering which is now applied to all elements of factory operation.
30 Mart 2008 Pazar
FREDERICK WINSLOW TAYLOR
Taylor’s innovations in industrial engineering –especially in time and motion study- yielded a profit in productivity and influenced the development of modern industry of almost every country. His time study profession helped him to form “The Principles of Scientific Management” basically. These principles increased productivity in many factories which were carried out. These principles are below:
Rule-of-thumb work methods are replaced with methods based on a scientific study of the tasks.
Each employee is scientifically selected, trained, and developed rather than passively to be left to train themselves.
Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task" (Montgomery 1997: 250).
work is divided nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks
Taylor always claimed that production efficiency could be enhanced by elimination of waste time and motion.
He had more than 40 patents and he was definitely a brilliant inventor; he developed high-speed steel and one of his most famous studies involved shıvels. He developed himself as a consulting engineer in management.
Until his retirement, Taylor continued to dedicate to promote the principles of scientific management.
Rule-of-thumb work methods are replaced with methods based on a scientific study of the tasks.
Each employee is scientifically selected, trained, and developed rather than passively to be left to train themselves.
Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task" (Montgomery 1997: 250).
work is divided nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks
Taylor always claimed that production efficiency could be enhanced by elimination of waste time and motion.
He had more than 40 patents and he was definitely a brilliant inventor; he developed high-speed steel and one of his most famous studies involved shıvels. He developed himself as a consulting engineer in management.
Until his retirement, Taylor continued to dedicate to promote the principles of scientific management.
HENRY FAYOL
According to Fayol, who is one of the people who influenced modern concepts of management, management has five primary functions: planning, organizing, commanding, coordinating and controlling. He believed management theories could be developed.
Fayol is known as the father of the modern operational management theory. He developed his concept of administration and discussed the 14 principles of management in detail in his book “General and Industrial Management”. The 14 principles which he exhibited:
Specialization of labour. Specializing encourages continuous improvement in skills and the development of improvements in methods.
Authority. The right to give orders and the power to exact obedience.
Discipline. No slacking, bending of rules. The workers should be obedient and respectful of the organization.
Unity of command. Each employee has one and only one boss.
Unity of direction. A single mind generates a single plan and all play their part in that plan.
Subordination of Individual Interests. When at work, only work things should be pursued or thought about.
Remuneration. Employees receive fair payment for services, not what the company can get away with.
Centralization. Consolidation of management functions. Decisions are made from the top.
Chain of Superiors (line of authority). Formal chain of command running from top to bottom of the organization, like military
Order. All materials and personnel have a prescribed place, and they must remain there.
Equity. Equality of treatment (but not necessarily identical treatment)
Personnel Tenure. Limited turnover of personnel. Lifetime employment for good workers.
Initiative. Thinking out a plan and do what it takes to make it happen.
Esprit de corps. Harmony, cohesion among personnel. It's a great source of strength in the organisation. Fayol stated that for promoting esprit de corps, the principle of unity of command should be observed and the dangers of divide and rule and the abuse of written communication should be avoided.
Fayol is known as the father of the modern operational management theory. He developed his concept of administration and discussed the 14 principles of management in detail in his book “General and Industrial Management”. The 14 principles which he exhibited:
Specialization of labour. Specializing encourages continuous improvement in skills and the development of improvements in methods.
Authority. The right to give orders and the power to exact obedience.
Discipline. No slacking, bending of rules. The workers should be obedient and respectful of the organization.
Unity of command. Each employee has one and only one boss.
Unity of direction. A single mind generates a single plan and all play their part in that plan.
Subordination of Individual Interests. When at work, only work things should be pursued or thought about.
Remuneration. Employees receive fair payment for services, not what the company can get away with.
Centralization. Consolidation of management functions. Decisions are made from the top.
Chain of Superiors (line of authority). Formal chain of command running from top to bottom of the organization, like military
Order. All materials and personnel have a prescribed place, and they must remain there.
Equity. Equality of treatment (but not necessarily identical treatment)
Personnel Tenure. Limited turnover of personnel. Lifetime employment for good workers.
Initiative. Thinking out a plan and do what it takes to make it happen.
Esprit de corps. Harmony, cohesion among personnel. It's a great source of strength in the organisation. Fayol stated that for promoting esprit de corps, the principle of unity of command should be observed and the dangers of divide and rule and the abuse of written communication should be avoided.
MAX WEBER
Max Weber was a German political economist and sociologist. He is known as one of the founders of the modern study of the sociology and public administration. In his major works, Weber studies about rationalization in sociology of religion and government.
“The Protestant Ethic and the Spirit of Capitalism” is his most famous work and it is thought to be an introduction to Weber’s later works about interaction between different religious ideas and economic behavior. Also his most significant contribution is his “Politics as a Vocation” essay.
Weber states that there are three types of political leadership, authority and domination: legal, charismatic and traditional domination.
“The Protestant Ethic and the Spirit of Capitalism” is his most famous work and it is thought to be an introduction to Weber’s later works about interaction between different religious ideas and economic behavior. Also his most significant contribution is his “Politics as a Vocation” essay.
Weber states that there are three types of political leadership, authority and domination: legal, charismatic and traditional domination.
ABRAHAM MASLOW
Abraham Maslow is an American psychologist and philosopher who is best known for his self-actualization theory of psychology. Self-acusation theory argues that the primary goal of psychotherapy should be the integration of the self. Maslow was an important contributor in the US to humanistic psychology and known as the father of humanistic psychology. His conceptualization of a “hierarchy of human needs” is also known. He argued that each person has a hierarchy of needs that must be satisfied –from basic physiological requirements tı love, esteem, and self-actualization-.
Maslow’s primary contribution to psychology is “Hierarchy of Needs”. Needs which were contended by Maslow are grouped as:
o Conative needs
o Cognitive needs
o Aesthetic needs
o Neurotic needs (do not exist in the hierarchy but exists in theory)
In the pyramid, the more powerful need is lower and the weaker, distinctly human need is higher.
Maslow’s primary contribution to psychology is “Hierarchy of Needs”. Needs which were contended by Maslow are grouped as:
o Conative needs
o Cognitive needs
o Aesthetic needs
o Neurotic needs (do not exist in the hierarchy but exists in theory)
In the pyramid, the more powerful need is lower and the weaker, distinctly human need is higher.
my preference
If I were one of these people I would be Abraham WASLOW because he doesn’t ignore human apart from the other VIPs. Other people’s works are about getting more money, more productivity etc. in major; on the other hand, Waslow is humanistic.
19 Mart 2008 Çarşamba
Division of Labor, Assembly Line, Mass Production
Division of labour is the specialisation of cooperative labour in specific, circumscribed tasks and roles, intended to increase the productivity of labour. Historically the growth of a more and more complex division of labour is closely associated with the growth of total output and trade, the rise of capitalism, and of the complexity of industrialisation processes. Later, the division of labour reached the level of a scientifically-based management practice with the time and motion studies associated with Taylorism.
The productivity gains of the division of labor are important within any type of production process, ranging from pin manufacture to software production to legal practice and medical care.
The division of labor makes trade necessary and is the source of economic interdependence.
The assembly line concept was not "invented" at one time by one person, and no one person is the "father" of it. It has been independently redeveloped throughout history based on logic. Its exponentially larger development at the end of the 19th century and beginning of the 20th occurred among various people over decades, as other aspects of technology allowed. The development of toolpath control via jigs, fixtures, and machine tools (such as the screw-cutting lathe and milling machine) during the 19th century provided the prerequisites by making interchangeable parts a practical reality. Before the 20th century, the way that most manufactured products were made was that a single craftsman or team of craftsmen would create each part of a product individually by hand, using their skills and such tools as files and knives, and assemble them together into an assembly, making cut-and-try changes in the parts so that they would fit and work together (the so-called English System). The transition to other methods began as creativity and logic took advantage of the opportunities that the aforementioned machining developments presented. Thus, before the modern assembly line took shape, there were prototypical forms in various industries.
Mass production (also called flow production, repetitive flow production, or series production) is the production of large amounts of standardized products on production lines.
It was popularized by Henry Ford in the early 20th century, notably in his Ford Model T.
Mass production typically uses moving tracks or conveyor belts to move partially complete products to workers, who perform simple repetitive tasks to permit very high rates of production per worker, allowing the high-volume manufacture of inexpensive finished goods. Mass production is capital intensive, as it uses a high proportion of machinery in relation to workers. With fewer labour costs and a faster rate of production, capital is increased while expenditure is decreased. However the machinery that is needed to set up a mass production line is so expensive that there must be some assurance that the product is to be successful so the company can get a return on its investment. Machinery for mass production such as robots and machine presses have high installation costs as well. Thus, mass production is ideally suited to serve large, relatively homogenous populations of consumers, whose demand would satisfy the long production runs required by this method of manufacturing. As such, it is not surprising that, given a number of other factors, mass production first became prevalent in the United States.
One of the descriptions of mass production is that the craftsmanship is in the workbench itself, not the training of the worker; rather than having a skilled worker measure every dimension of each part of the product against the plans or the other parts as it is being formed, there are jigs and gauge blocks that are ready at hand to ensure that the part is made to fit this set-up. It has already been checked that the finished part will be to specifications to fit all the other finished parts - and it will be made quicker, with no time spent on finishing the parts to fit one another. This is the specialized capital required for mass production; each workbench is different and each set of tools at each workbench limited to those necessary to make one part. As each of these parts is uniformly and consistently constructed, interchangeability of components is thus another hallmark of mass produced goods.
Use of assembly lines in mass production
Mass production systems are usually organized into assembly lines. The assemblies pass by on a conveyor, or if they are heavy, hung from an overhead monorail.
In a factory for a complex product, rather than one assembly line, there may be many auxiliary assembly lines feeding sub-assemblies (i.e. car engines or seats) to a backbone "main" assembly line. A diagram of a typical mass-production factory looks more like the skeleton of a fish than a single line.
The productivity gains of the division of labor are important within any type of production process, ranging from pin manufacture to software production to legal practice and medical care.
The division of labor makes trade necessary and is the source of economic interdependence.
The assembly line concept was not "invented" at one time by one person, and no one person is the "father" of it. It has been independently redeveloped throughout history based on logic. Its exponentially larger development at the end of the 19th century and beginning of the 20th occurred among various people over decades, as other aspects of technology allowed. The development of toolpath control via jigs, fixtures, and machine tools (such as the screw-cutting lathe and milling machine) during the 19th century provided the prerequisites by making interchangeable parts a practical reality. Before the 20th century, the way that most manufactured products were made was that a single craftsman or team of craftsmen would create each part of a product individually by hand, using their skills and such tools as files and knives, and assemble them together into an assembly, making cut-and-try changes in the parts so that they would fit and work together (the so-called English System). The transition to other methods began as creativity and logic took advantage of the opportunities that the aforementioned machining developments presented. Thus, before the modern assembly line took shape, there were prototypical forms in various industries.
Mass production (also called flow production, repetitive flow production, or series production) is the production of large amounts of standardized products on production lines.
It was popularized by Henry Ford in the early 20th century, notably in his Ford Model T.
Mass production typically uses moving tracks or conveyor belts to move partially complete products to workers, who perform simple repetitive tasks to permit very high rates of production per worker, allowing the high-volume manufacture of inexpensive finished goods. Mass production is capital intensive, as it uses a high proportion of machinery in relation to workers. With fewer labour costs and a faster rate of production, capital is increased while expenditure is decreased. However the machinery that is needed to set up a mass production line is so expensive that there must be some assurance that the product is to be successful so the company can get a return on its investment. Machinery for mass production such as robots and machine presses have high installation costs as well. Thus, mass production is ideally suited to serve large, relatively homogenous populations of consumers, whose demand would satisfy the long production runs required by this method of manufacturing. As such, it is not surprising that, given a number of other factors, mass production first became prevalent in the United States.
One of the descriptions of mass production is that the craftsmanship is in the workbench itself, not the training of the worker; rather than having a skilled worker measure every dimension of each part of the product against the plans or the other parts as it is being formed, there are jigs and gauge blocks that are ready at hand to ensure that the part is made to fit this set-up. It has already been checked that the finished part will be to specifications to fit all the other finished parts - and it will be made quicker, with no time spent on finishing the parts to fit one another. This is the specialized capital required for mass production; each workbench is different and each set of tools at each workbench limited to those necessary to make one part. As each of these parts is uniformly and consistently constructed, interchangeability of components is thus another hallmark of mass produced goods.
Use of assembly lines in mass production
Mass production systems are usually organized into assembly lines. The assemblies pass by on a conveyor, or if they are heavy, hung from an overhead monorail.
In a factory for a complex product, rather than one assembly line, there may be many auxiliary assembly lines feeding sub-assemblies (i.e. car engines or seats) to a backbone "main" assembly line. A diagram of a typical mass-production factory looks more like the skeleton of a fish than a single line.
Frederick Winslow Taylor
Frederick Winslow Taylor is a controversial figure in management history. His innovations in industrial engineering, particularly in time and motion studies, paid off in dramatic improvements in productivity. At the same time, he has been credited with destroying the soul of work, of dehumanizing factories, making men into automatons.
“Born in 1856 into a wealthy Philadelphia family, Taylor disappointed his parents by working in a metal products factory, first as a machinist and next as a foreman. Shocked at the factory's inefficiency, and the practice of its skilled workers of purposely working slowly, Taylor proposed solutions that he believed would solve both problems. By studying the time it took each worker to complete a step, and by rearranging equipment, Taylor believed he could discover what an average worker could produce in optimum conditions. The promise of higher wages, he figured, would create added incentive for workers to exceed this "average" level. Taylor's time-and-motion studies offered a path away from the industrial wars of a century ago. Now what was needed was a way to apportion the wealth created by manufacturing enterprises. Taylor's answer sidestepped the class struggle and interest-group politics.
Generally creating enemies wherever he worked, and willing to bend the facts to suit his theories, Taylor's methods paid off, when on the eve of World War I, "Taylorism" became the first big management fad. An extreme version of Taylor's mind-set found its way into the operation of Nazi death camps and communist totalitarianism. The Taylor method prescribed a clockwork world of tasks timed to the hundredth of a minute, of standardized factories, machines, women and men. Naturally, ordinary workers resented having to work faster then they thought was healthy or fair.
It came to be revealed, that in case after case, Taylor and his adherents didn't actually use their time studies as the sole basis for setting normative output. Acknowledging that workers could not sustain peak level performances all day long, they used a margin of error or fudge factor of as much as a third to set a more realistic level. This of course, struck at the credibility that Taylor's system was based on scientific laws.”
Taylor believed that the industrial management of his day was amateurish, that management could be formulated as an academic discipline, and that the best results would come from the partnership between a trained and qualified management and a cooperative and innovative workforce. Each side needed the other, and there was no need for trade unions.
Louis Brandeis, who was an active propagandist of Taylorism (Montgomery 1989: 250), coined the term scientific management in the course of his argument for the Eastern Rate Case, which Taylor used in the title of his monograph The Principles of Scientific Management, published in 1911. His approach is also often referred to, as Taylor's Principles, or frequently disparagingly, as Taylorism. Taylor's scientific management consisted of four principles:
-Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.
-Scientifically select, train, and develop each worker rather than passively leaving them train themselves.
-Cooperate with the workers to ensure that the scientifically developed methods are being followed.
-Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.
These principles were implemented in many factories, often increasing productivity by a factor of three or more. Henry Ford applied Taylor’s principles in his automobile factories, and families even began to perform their household tasks based on the results of time and motion studies.
“Born in 1856 into a wealthy Philadelphia family, Taylor disappointed his parents by working in a metal products factory, first as a machinist and next as a foreman. Shocked at the factory's inefficiency, and the practice of its skilled workers of purposely working slowly, Taylor proposed solutions that he believed would solve both problems. By studying the time it took each worker to complete a step, and by rearranging equipment, Taylor believed he could discover what an average worker could produce in optimum conditions. The promise of higher wages, he figured, would create added incentive for workers to exceed this "average" level. Taylor's time-and-motion studies offered a path away from the industrial wars of a century ago. Now what was needed was a way to apportion the wealth created by manufacturing enterprises. Taylor's answer sidestepped the class struggle and interest-group politics.
Generally creating enemies wherever he worked, and willing to bend the facts to suit his theories, Taylor's methods paid off, when on the eve of World War I, "Taylorism" became the first big management fad. An extreme version of Taylor's mind-set found its way into the operation of Nazi death camps and communist totalitarianism. The Taylor method prescribed a clockwork world of tasks timed to the hundredth of a minute, of standardized factories, machines, women and men. Naturally, ordinary workers resented having to work faster then they thought was healthy or fair.
It came to be revealed, that in case after case, Taylor and his adherents didn't actually use their time studies as the sole basis for setting normative output. Acknowledging that workers could not sustain peak level performances all day long, they used a margin of error or fudge factor of as much as a third to set a more realistic level. This of course, struck at the credibility that Taylor's system was based on scientific laws.”
Taylor believed that the industrial management of his day was amateurish, that management could be formulated as an academic discipline, and that the best results would come from the partnership between a trained and qualified management and a cooperative and innovative workforce. Each side needed the other, and there was no need for trade unions.
Louis Brandeis, who was an active propagandist of Taylorism (Montgomery 1989: 250), coined the term scientific management in the course of his argument for the Eastern Rate Case, which Taylor used in the title of his monograph The Principles of Scientific Management, published in 1911. His approach is also often referred to, as Taylor's Principles, or frequently disparagingly, as Taylorism. Taylor's scientific management consisted of four principles:
-Replace rule-of-thumb work methods with methods based on a scientific study of the tasks.
-Scientifically select, train, and develop each worker rather than passively leaving them train themselves.
-Cooperate with the workers to ensure that the scientifically developed methods are being followed.
-Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work and the workers actually perform the tasks.
These principles were implemented in many factories, often increasing productivity by a factor of three or more. Henry Ford applied Taylor’s principles in his automobile factories, and families even began to perform their household tasks based on the results of time and motion studies.
18 Mart 2008 Salı
Henry Ford
“In 1891, Ford became an engineer with the Edison Illuminating Company in Detroit. This event signified a conscious decision on Ford's part to dedicate his life to industrial pursuits. His promotion to Chief Engineer in 1893 gave him enough time and money to devote attention to his personal experiments on internal combustion engines.
These experiments culminated in 1896 with the completion of his own self-propelled vehicle-the Quadricycle. The Quadricycle had four wire wheels that looked like heavy bicycle wheels, was steered with a tiller like a boat, and had only two forward speeds with no reverse.
Although Ford was not the first to build a self-propelled vehicle with a gasoline engine, he was, however, one of several automotive pioneers who helped this country become a nation of motorists.”
Henry Ford (July 30, 1863 – April 7, 1947) was the American founder of the Ford Motor Company and father of modern assembly lines used in mass production. His introduction of the Model T automobile revolutionized transportation and American industry. He was a prolific inventor and was awarded 161 U.S. patents. As owner of the Ford Company he became one of the richest and best-known people in the world. He is credited with "Fordism", that is, the mass production of large numbers of inexpensive automobiles using the assembly line, coupled with high wages for his workers. Ford had a global vision, with consumerism as the key to peace. Ford did not believe in accountants; he amassed one of the world's largest fortunes without ever having his company audited under his administration. Henry Ford's intense commitment to lowering costs resulted in many technical and business innovations, including a franchise system that put a dealership in every city in North America, and in major cities on six continents. Ford left most of his vast wealth to the Ford Foundation but arranged for his family to control the company permanently.
In 1891, Ford became an engineer with the Edison Illuminating Company, and after his promotion to Chief Engineer in 1893, he had enough time and money to devote attention to his personal experiments on gasoline engines. These experiments culminated in 1896 with the completion of his own self-propelled vehicle named the Ford Quadricycle, which he test-drove on June 4. After various test-drives, Ford brainstormed ways to improve the Quadricycle.[6]
Also in 1896, Ford attended a meeting of Edison executives, where he was introduced to Thomas Edison himself. Edison approved of Ford's automobile experimentation; encouraged by Edison's approval, Ford designed and built a second vehicle, which was completed in 1898.[7] Backed by the capital of Detroit lumber baron William H. Murphy, Ford resigned from Edison and founded the Detroit Automobile Company on August 5, 1899.[8] However, the automobiles produced were of a lower quality and higher price than Ford liked. Ultimately, the company was not successful and was dissolved in January 1901.[9]
Ford went to work building a racer. With the help of C. Harold Wills, he designed, built, and successfully raced a 26 horsepower automobile in October 1901. With that success, Murphy and other stockholders in the Detroit Automobile Company formed the Henry Ford Company on November 30, 1901, with Ford as chief engineer.[10] However, Murphy brought in Henry M. Leland as a consultant. As a result, Ford left the company bearing his name in 1902. With Ford gone, Murphy renamed the company the Cadillac Automobile Company.[11]
Ford once again focused on building a racecar, producing the 80+ horsepower racer "999", and getting Barney Oldfield to drive it to victory in October 1902. Ford also received the backing of an old acquaintance, Alexander Y. Malcomson, a Detroit-area coal dealer.[12] They formed a partnership, "Ford & Malcomson, Ltd." to manufacture automobiles. Ford went to work designing an inexpensive automobile, and the duo leased a factory and contracted with a machine shop owned by John and Horace E. Dodge to supply over $160,000 in parts.[13] Sales were slow, and a crisis arose when the Dodge brothers demanded payment for their first shipment.
In response, Malcomson brought in another group of investors and convinced the Dodge Brothers to accept a portion of the new company.[14] On June 16, 1903,[15] Ford & Malcomson was reincorporated as the Ford Motor Company, with $28,000 capital. The original investors included Ford and Malcomson, the Dodge brothers, Malcomson's uncle John S. Gray, Horace Rackham, and James Couzens. In a newly designed car, Ford gave an exhibition on the ice of Lake St. Clair, driving 1 mile (1.6 km) in 39.4 seconds, setting a new land speed record at 91.3 miles per hour (147.0 km/h). Convinced by this success, the race driver Barney Oldfield, who named this new Ford model "999" in honor of a racing locomotive of the day, took the car around the country, making the Ford brand known throughout the United States. Ford also was one of the early backers of the Indianapolis 500.
Ford astonished the world in 1914 by offering a $5 per day wage, which more than doubled the rate of most of his workers. The move proved extremely profitable; instead of constant turnover of employees, the best mechanics in Detroit flocked to Ford, bringing in their human capital and expertise, raising productivity, and lowering training costs. Ford called it "wage motive." The company's use of vertical integration also proved successful when Ford built a gigantic factory that shipped in raw materials and shipped out finished automobiles.
The Model T was introduced on October 1, 1908. It had many important innovations—such as the steering wheel on the left, which every other company soon copied. The entire engine and transmission were enclosed; the four cylinders were cast in a solid block; the suspension used two semi-elliptic springs.
These experiments culminated in 1896 with the completion of his own self-propelled vehicle-the Quadricycle. The Quadricycle had four wire wheels that looked like heavy bicycle wheels, was steered with a tiller like a boat, and had only two forward speeds with no reverse.
Although Ford was not the first to build a self-propelled vehicle with a gasoline engine, he was, however, one of several automotive pioneers who helped this country become a nation of motorists.”
Henry Ford (July 30, 1863 – April 7, 1947) was the American founder of the Ford Motor Company and father of modern assembly lines used in mass production. His introduction of the Model T automobile revolutionized transportation and American industry. He was a prolific inventor and was awarded 161 U.S. patents. As owner of the Ford Company he became one of the richest and best-known people in the world. He is credited with "Fordism", that is, the mass production of large numbers of inexpensive automobiles using the assembly line, coupled with high wages for his workers. Ford had a global vision, with consumerism as the key to peace. Ford did not believe in accountants; he amassed one of the world's largest fortunes without ever having his company audited under his administration. Henry Ford's intense commitment to lowering costs resulted in many technical and business innovations, including a franchise system that put a dealership in every city in North America, and in major cities on six continents. Ford left most of his vast wealth to the Ford Foundation but arranged for his family to control the company permanently.
In 1891, Ford became an engineer with the Edison Illuminating Company, and after his promotion to Chief Engineer in 1893, he had enough time and money to devote attention to his personal experiments on gasoline engines. These experiments culminated in 1896 with the completion of his own self-propelled vehicle named the Ford Quadricycle, which he test-drove on June 4. After various test-drives, Ford brainstormed ways to improve the Quadricycle.[6]
Also in 1896, Ford attended a meeting of Edison executives, where he was introduced to Thomas Edison himself. Edison approved of Ford's automobile experimentation; encouraged by Edison's approval, Ford designed and built a second vehicle, which was completed in 1898.[7] Backed by the capital of Detroit lumber baron William H. Murphy, Ford resigned from Edison and founded the Detroit Automobile Company on August 5, 1899.[8] However, the automobiles produced were of a lower quality and higher price than Ford liked. Ultimately, the company was not successful and was dissolved in January 1901.[9]
Ford went to work building a racer. With the help of C. Harold Wills, he designed, built, and successfully raced a 26 horsepower automobile in October 1901. With that success, Murphy and other stockholders in the Detroit Automobile Company formed the Henry Ford Company on November 30, 1901, with Ford as chief engineer.[10] However, Murphy brought in Henry M. Leland as a consultant. As a result, Ford left the company bearing his name in 1902. With Ford gone, Murphy renamed the company the Cadillac Automobile Company.[11]
Ford once again focused on building a racecar, producing the 80+ horsepower racer "999", and getting Barney Oldfield to drive it to victory in October 1902. Ford also received the backing of an old acquaintance, Alexander Y. Malcomson, a Detroit-area coal dealer.[12] They formed a partnership, "Ford & Malcomson, Ltd." to manufacture automobiles. Ford went to work designing an inexpensive automobile, and the duo leased a factory and contracted with a machine shop owned by John and Horace E. Dodge to supply over $160,000 in parts.[13] Sales were slow, and a crisis arose when the Dodge brothers demanded payment for their first shipment.
In response, Malcomson brought in another group of investors and convinced the Dodge Brothers to accept a portion of the new company.[14] On June 16, 1903,[15] Ford & Malcomson was reincorporated as the Ford Motor Company, with $28,000 capital. The original investors included Ford and Malcomson, the Dodge brothers, Malcomson's uncle John S. Gray, Horace Rackham, and James Couzens. In a newly designed car, Ford gave an exhibition on the ice of Lake St. Clair, driving 1 mile (1.6 km) in 39.4 seconds, setting a new land speed record at 91.3 miles per hour (147.0 km/h). Convinced by this success, the race driver Barney Oldfield, who named this new Ford model "999" in honor of a racing locomotive of the day, took the car around the country, making the Ford brand known throughout the United States. Ford also was one of the early backers of the Indianapolis 500.
Ford astonished the world in 1914 by offering a $5 per day wage, which more than doubled the rate of most of his workers. The move proved extremely profitable; instead of constant turnover of employees, the best mechanics in Detroit flocked to Ford, bringing in their human capital and expertise, raising productivity, and lowering training costs. Ford called it "wage motive." The company's use of vertical integration also proved successful when Ford built a gigantic factory that shipped in raw materials and shipped out finished automobiles.
The Model T was introduced on October 1, 1908. It had many important innovations—such as the steering wheel on the left, which every other company soon copied. The entire engine and transmission were enclosed; the four cylinders were cast in a solid block; the suspension used two semi-elliptic springs.
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