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 Learning Objectives:

1. To present the historical, technological, economic, social and cultural  perspectives and context out of which modern management sprang and operated.

2. To gain insights relevant to management from an in-depth study of the Industrial Revolution.

3. To discover how the Industrial Revolution by its nature and scope gave birth to modern Management.

4. To develop profound and broader perspectives necessary for leadership in analyzing the historical and empirical relations between the Industrial Revolution and modern Management.

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1. The Nature and Scope of  Industrial Revolution

1.1 A revolution is a profound and radical change in the economic, social, or   political structure. It is a process of transformation in the economy, society,

and political systems.

While it may appear sudden or spontaneous, the process of revolution actually covers a period of time. Suddeness of change is more associated with coup d’ etat-- the sudden seizure of political power by the military.

1.2 The Industrial Revolution is the process of change from an agrarian, handicraft or feudal economy to one dominated by industry.

1.3 The Industrial Revolution cannot be treated as a definite period of time in history. Although the Industrial Revolution started in England and first spread to Belgium and the France, it cannot be asserted that it is over with the passage of  the 18th and 19th centuries. It is still on-going as a process in our time and will continue to go on with Technological Revolution.

It was the result of gradual succession of change over a long period of time.

Some of its elements can be traced back from the medieval period.

1.4 With the hindsight of contemporary history, we can even sat its embryonic roots can be traced from what Alfin Toffler calls the First Wave of Civilization --Agricultural Revolution which supplanted the Hunting Stage.

1.5 Agriculture was revolutionary because:

* The acquisition, possession, enjoyment and ownership of land gave rise to wealth. And with wealth came power -- economic and political.

* Agricultural improvements made possible excess production over subsistence level, thus making possible provision of food for larger non-agricultural  population.

* This enabled non-agricultural workers to engage in crafts and production of  goods and services.

* It enabled the creative and innovative to produce arts, literature, and culture.

* It gave rise to trade and commerce.

2. First Situs of  

Industrial Revolution

2.1. England is the birthplace of Industrial Revolution. Why England?

2.2. Because scientific, technological, political, legal economic, social and cultural environment in England was favorable to industrialization:

*

At the end of 18^th century, continental Europe was for ahead in pure research in the physical and chemical sciences.

However, the English excelled in the application of scientific knowledge to  practical affairs, particularly in industries.

*

Technological revolution accompanied the Industrial Revolution as traditional methods of production the domestic handicraft system of manufacturing --could not provide adequate response to market conditions as primary cause of  industrialization. It led to factory-based mechanization.

*

Political liberty and individual rights were guaranteed. The right to life, liberty and property, the right to due process and freedom from illegal persecution were  protected and recognized.

*

The sanctity of property rights and sanctity of contracts were held in high regard.

*

A patent law protected the intangible rights of inventors and the creative.

*

The Agrarian Revolution in England centered on land use which increased  production more than what improved technology could do so. The Enclosure Movement of the 18^th century increased the efficiency of farm lands as common  pastures and fields were replaced by more compact and easily farmed private

holdings.

Farmers were motivated to experiment with new forms of husbandry -- notably root crop rotation and convertibility between cultivated and pasture land -- that increased productivity.

*

England had the domestic capital or wealth saved and accumulated from land and international trade. Banking and insurance services were available.

**

Every inventor who needed an entrepreneur with capital and vision to exploit anEvery inventor who needed an entrepreneur with capital and vision to exploit an innovation could easily find such f

innovation could easily find such financial backer.inancial backer.

**

England was richly endowed with coal and iron ore. It had wool. Its colonies hadEngland was richly endowed with coal and iron ore. It had wool. Its colonies had iron, cotton, dyewoods, lumber and naval stores.

iron, cotton, dyewoods, lumber and naval stores.

**

It It had had adeadequaquate te tratranspnsport ort syssystemtem. . RoaRoads ds and and cancanals als werwere e bubuiltilt. . RaiRailrolroadsads extended transportation network. These in addition to

extended transportation network. These in addition to traditional British merchanttraditional British merchant marine which was the largest in the world at the time.

marine which was the largest in the world at the time.

**

Social mobility, as a result of economic changes in social relations in the meansSocial mobility, as a result of economic changes in social relations in the means of production, was common and open. This became an incentive to savings and of production, was common and open. This became an incentive to savings and accumulation of wealth and capital.

accumulation of wealth and capital.

**

The Demographic Revolution -- Britain’s population in the 1700’s doubled againThe Demographic Revolution -- Britain’s population in the 1700’s doubled again  by 1850 -- provided stimulus to increased demand f

 by 1850 -- provided stimulus to increased demand for food.or food.

Pop

Populaulatiotion n grogrowth wth in in devdeveloelopiping ng coucountrntries ies todtoday ay tentends ds to to retretard ard ecoeconomnomicic development. But Britain in the 18

development. But Britain in the 18^thth century was a wealthy country with a standard of century was a wealthy country with a standard of  living well above subsistence. Thus the population explosion from 1750 enlarged the living well above subsistence. Thus the population explosion from 1750 enlarged the effective demand for consumption. Since the population generally had the purchasing effective demand for consumption. Since the population generally had the purchasing  power, the population explosion had a beneficial effect on economic development.

 power, the population explosion had a beneficial effect on economic development.

**

The The shishipperppers s and and tratraderderss and most of and most of all the all the mermerchachants saw nts saw ththe e marmarketket opportunities. Hence, the increasing demand for improvements in the process of  opportunities. Hence, the increasing demand for improvements in the process of  manufacturing or the production of goods.

manufacturing or the production of goods.

**

The ProtestaThe Protestant Ethic, as nt Ethic, as Max Weber Max Weber callcalls s them, of them, of hard work, saving, sacrifhard work, saving, sacrificeice (fo

(foregrego o todtoday’ay’s s comcomforfort t for for tomtomorrorrow’ow’s s secsecuriurity)ty), , honhonestesty, y, trutrust, st, - - valvaluesues conducive to economic progress - were widely lived up to and practiced outside conducive to economic progress - were widely lived up to and practiced outside the confines of churches and even

the confines of churches and even after religious services.after religious services.

3

3.. MMaaiin n FFeeaattuurrees s oof  f   Industrial Revolution Industrial Revolution The main features of the

The main features of the Industrial Revolution were Technological, economic, social, andIndustrial Revolution were Technological, economic, social, and cultural.

cultural.

3.1.

3.1. Technological features:Technological features:

**

The use of new basic materials -- iron and steel.The use of new basic materials -- iron and steel.

**

The use of new energy sources -- both fuels and motive power -- such as coal,The use of new energy sources -- both fuels and motive power -- such as coal, steam engine, electricity, petroleum, and internal combustion engine.

steam engine, electricity, petroleum, and internal combustion engine.

**

The invention of new machines -- spinning jenny and the power loom thatThe invention of new machines -- spinning jenny and the power loom that  permitted increased production with smaller expenditure of human energy.

 permitted increased production with smaller expenditure of human energy.

**

The new organization of work -- the Factory System -- which entailed increasedThe new organization of work -- the Factory System -- which entailed increased division of work and specialization of function. (Note that F. W. Taylor’s School division of work and specialization of function. (Note that F. W. Taylor’s School of Scientific Management is based on

of Scientific Management is based on the study of work in the study of work in the Factory System.)the Factory System.)

**

^{DevDeveloelopmepments nts in in tratranspnsportortatiation on and and comcommunmunicaicatiotions ns -- -- stesteam am loclocomoomotivtive,e,}

steamship, automobile, airplane, telegraph, and radio.

steamship, automobile, airplane, telegraph, and radio.

**

The increasing application of science The increasing application of science to industry.to industry.

The

These se tectechnohnologlogicaical l brebreaktakthrohroughughs s madmade e pospossibsible le masmassivsive e use use of of natnaturaurall resources and mass production of manufactured goods.

resources and mass production of manufactured goods.

3.2.

3.2. Socio-economic and Cultural Features of Socio-economic and Cultural Features of Industrial RevolutionIndustrial Revolution

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