Fordism in Scientific Management | Business Management | Advantages and Disadvantages

Fordism business management

Fordism in Scientific Management

Fordism is an organizational model based on standard mass production.

Of course, this concept is related to Taylorism insofar as Henry Ford develops and extends the principles of scientific organization of work; which he applies in his automobile production. Very quickly, the whole industry (not just automotive) applied these principles of productivity. But the notion of Fordism goes further.

At Ford first with relatively better paid employees thanks to productivity gains and Henry Ford’s famous quip: “I pay my workers well so they can buy my cars”. Then at the macroeconomic level, in a context of standardized mass production for mass consumption.

In this context, which is still not very competitive, it is easy to sell (consumer equipment needs) all the better as purchasing power increases. Even more broadly, Fordism corresponds to a long period of regulated capitalism, we speak of Fordist compromise, during which (until the oil shock of around 73) the “system” is win-win for both companies and for employees. In this macro and social vision, Fordism and Taylorism should no longer be confused.

Fordism is based on:

  • Standardization of products and parts allowing mass production,
  • Work on assembly lines (called chain work) resulting from a vertical and horizontal division of labor and its fragmentation.
  • Increasing the purchasing power of workers. Made necessary to compensate for workers’ loss of interest in repetitive tasks and made possible by productivity gains, it stimulates demand for goods, opening the way to mass consumption.

The Principles of Fordism

This production model is implemented using several principles:

1. Divide the work by separating the design from the realization, sequencing the tasks, and using an assembly line. It all boils down to assembly line work.

2. Standardize parts, products, which has the advantage of producing in large series. So it’s mass production.

3. Increase the wages of workers (five dollars a day, against two or three for longer days previously). This stimulates demand and therefore increases consumption. This increase is intended to avoid the resignations of workers who have increased with the appearance of assembly line work, deemed very hard.

Ford factories required a disciplined and skilled workforce willing and able to perform repetitive tasks on the assembly line. Frederick W. Taylor’s Principles of Scientific Organization of Labor (OST), better known as Taylorism, had already described how labor productivity could be radically increased by breaking down each movement of the assembly process and to organize them according to rigorous standards of time and pace.

What was new in Ford’s thinking was his vision. He was convinced that mass production was needed for mass consumption. Thus, the five-dollar wage for an eight-hour day both provided a compromise with the discipline required to work on the assembly line, but also provided workers with sufficient income and free time to they consume the products they themselves have made.

Consequences and limits of Fordism

However, this new mode of production is not without consequences:

1. It results in a combined increase in production, productivity and consumption. Consequently, a lowering of the production cost is brought about.
2. This assures the manager of a better control of workers’ work. Finally, the standardization of production put in place favors mass consumption.

“Post-war Fordism should no longer be seen simply as a system of mass production but as a true way of life”

But Fordism has its limits, such as the loss of qualification of worker work becoming repetitive and monotonous, or the lack of responses to the needs for diversification of production and in the face of competition from Asian countries at the end of the 1960s.

The end of Fordism, the beginning of neo-Fordism…

According to geographer David Harvey, Fordism began to deteriorate in the 1970s when it began to overproduce, leading to mass layoffs of workers and a consequent reduction in demand for products. The crisis resulting from inflation shook the Fordist system to such an extent that the post-Fordist system, known as “flexible overproduction”, emerged.

“This regime, again according to Harvey, is based on flexibility regarding work processes, labor markets, products, and consumption patterns. It is characterized by the emergence of new production sectors, new financial services, new markets, and above all, considerably intensified rates of commercial, technological and organizational innovation. »

Workers, instead of acquiring a skill for life, can now expect at least one, if not several, episode(s) of deskilling and requalification in their lifetime.

The detractors or critics of Fordism

Finally, we can see that Fordism has, like any movement, its detractors. Indeed, many criticisms of Fordism have flourished over time:

By Antonio Gramsci

– the Italian communist author Antonio Gramsci, criticized this organization of work. He denounces the misdeeds of the division of labor and machinery, and the increase in the exploitation of labor:

“It is no longer the machines that are at the service of Man, but the Man who serves the machines”, he says.

By Theory of Regulation

– supporters of the Theory of Regulation, criticize the arguments put forward by Henry Ford concerning the remuneration of workers, who, according to them, would not have increased their employees out of humanism but to combat and reduce a turnover of labour- too much work. To fight against the flight of workers, which weakens the new forms of organization, Ford is forced and forced to increase wages.

By La société du spectacle, Guy Debord

– in La société du spectacle, Guy Debord wrote in 1967 that the consequences of Fordism should not only be analyzed in terms of production. Society as a whole is modified by it: “With the industrial revolution, the manufacturing division of labor and massive production for the world market, the commodity appears effectively as a power that really comes to occupy social life. »

By Daniel Cohen

– Daniel Cohen, economist, highlights another point of fragility in Fordist construction, the functioning of which depends on factors external to it:

“If workers absorb the productivity gains generated in the factory, the incentive to hire new workers is reduced considerably. If the company anticipates that workers will always preempt the earnings they generate, it will always want to keep the number of workers hired as low as possible. The operating condition of Fordism is therefore “external” to it: it depends on the possibility of creating jobs in areas that escape it. In the 1950s and 1960s, we saw that it was the services that were able to play this role. Nevertheless, “as soon as the process (of job creation) fades, (…) the upward phase of wages must also be interrupted, or even temporarily reversed. (…) In this new world, the indexation of wages to productivity gains – if it continues however – appears in a new light. (…) [It is no longer] a way of ensuring job opportunities but [becomes] one of the effects of the wage negotiation conducted by the “insiders”. It then becomes contradictory with full employment. »

He also adds, revealing an internal contradiction, that “to buy the assent of the workers, it is not enough to double their wages compared to what they earned before; it has to be done relative to what they would earn elsewhere. It doesn’t really matter if you earn twice as much as yesterday. What counts to escape boredom, stupidity, is to think that one is better paid here than there. But the extension of Fordism to the entire economy makes this headlong rush impossible. »

Extended to the whole economy, the increase in wages generates inflation and no longer makes it possible to retain workers.

Scientific Management | Taylorism, Fordism, Toyotism

Sources: PinterPandai, The Collaboratory for Digital Discourse and Culture (CDDC), York University, Novida

Photo credit: Buffik / Pixabay

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