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Frederick W. Taylor's 1899 Pig Iron Observations: Examining Fact, Fiction, and Lessons forthe New Millennium

Author(s): Charles D. Wrege and Richard M. HodgettsSource: The Academy of Management Journal, Vol. 43, No. 6 (Dec., 2000), pp. 1283-1291Published by: Academy of ManagementStable URL: http://www.jstor.org/stable/1556350 .Accessed: 10/02/2011 10:33

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? Academy of Management Journal2000, Vol. 43, No. 6, 1283-1291.

FREDERICK W. TAYLOR'S 1899 PIG IRON OBSERVATIONS:EXAMINING FACT, FICTION, AND LESSONSFOR THE NEW MTILLENNIUMCHARLES D. WREGE

Cornell UniversityRICHARD M. HODGETTSFlorida International University

Taylor'spig iron observationsat Bethlehem Iron in 1899 are often cited as an exampleof how scientific management helped increase industrial efficiency. The current re-search, relying almostexclusively on primarysources, reveals thatTaylor'sfamouspigiron anecdote was erroneous. Additionally, this article offers lessons and guidelinesfor managers in the new millennium.

Although FrederickW. Taylor's impact on man-agement cannot be denied, whether his work al-ways represented the use of science to solve man-agementproblems is questionable. Georgehas saidthat Taylor believed "to maximize output with agiven level of effort. . . the scientific method had tobe applied to worker selection, job determina-tion, creation of a proper environment, and so on,to determine properly the task for each man"(1972: 93).This concept of a scientific, research-basedap-proachin managementpracticewas not new (Hoag-land, 1955). For example, in Poland in the late1890s KarolAdamiecki was developing work flownetwork diagramsto solve production problems inlocal factories (Marsh,1975). However, Taylor didimpress his audiences by describing the apparentuse of scientific methods to reduce costs and tocreate prosperity for the workforce. More impor-tantly, his claims were readily accepted by practi-tioners and scholars until almost 75 years later,when they were challenged by Wrege and Perroni(1974). These authors focused on how Taylor'sac-count of his study of pig iron loading at the Beth-lehem Iron Company continually changed in theyears from 1901 to 1911. However, they did notattempt to study the details of pig iron loading orwhether the company or the workersactually pros-pered from the piece rate system that Taylor rec-ommended. The currentresearch focuses on theselatterthree aspects of Taylor'swork.The reason for the continued acceptance of Tay-lor's observations largely lies in the persistent reli-ance of managementscholars on published sources(usually those appearing in management publica-tions) ratherthan on original documents preparedat the time of the actual events Taylor described.

Unfortunately, for the majority of the readers ofmanagementpublications, the printed word has anaura of authenticity that is seldom questioned, andoriginal documents are neglected.This study drawson originaldocuments and pre-sents an analysis of what really happened duringthe famous pig iron observations of 1899. It alsopresents lessons to be learned by researchers ingeneral and managementscholars in particular.

BACKGROUNDManagement history is replete with anecdotes

regardingthe work of prominent people. Yet per-haps no story is more famous that that of FrederickTaylor's pig iron observations, which were con-ducted at the Bethlehem Iron Company of SouthBethlehem, Pennsylvania, in March-May 1899.Taylor had come to Bethlehem at the behest ofRobert Linderman, president of the company, toreduce costs by introducing a piece rate system(South Bethlehem Globe, 1898; Taylor, 1898).When Taylorarrived at Bethlehem, pig iron wasselling at $11.50 per long ton (2,240 pounds) (Hob-son, 1899), and the company had 10,000 tons onhand. However, it was waiting for a better pricebefore selling. By March 1899, the price had risento $13.50 per long ton (Iron Age, 1899), and thecompany quickly sold its inventory and beganpreparationsfor loading the iron onto gondola carsfor shipment. At this point Taylor decided to takeadvantageof the opportunityto study pig iron load-ing for the purpose of lowering loading costs, aswell as to secure data for a book he was preparingon time and performingwork. He assigned two ofhis assistants, James Gillespie and Hartley C.Wolle, to study the loading process. They reported1283


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Academy of Management Journaltheir observations to Taylor,who made decisions.The two men began by firstselecting ten of the verybest workersand having them work as fast as theycould loading pig iron for a full day. Commentingon the results, Wren (1994) reported:

During he first day, the workers oaded 75 tonseach,fillingonecar.Since theaverageonsperdayhad previouslybeen about 121/2ons perworker,theworkerswere exhausted.Gillespieand Wolle thendeducted40 percent or time to be allotted o restanddelays,establishinghe new standardt 45tonsper workerper day. (1994: 117)On the basis of these results, Taylor then set apiece rateof $0.0375 per ton. So a worker who metthe standard of 45 tons would earn $1.69 for theday, a substantial increase over the $1.15 day ratethat the average pig iron loader was then earning.On countless occasions, Taylorused the storyhehad fashioned about the pig iron observations toexplain how productivity increases at BethlehemIron were achieved and how the workers earnedmoremoney. The "win-win"aspect of the anecdotewas extremelyattractive o Taylor'slisteners. How-ever, was his story accurate, or was it contrivedthrough the use of omissions and generalizationsregardingwhat really happened a century ago atBethlehem?

METHODSIn an effort to clarify the work of Wrege andPerroni (1974) on Taylor's pig iron observationsthrough use of greater detail and to evaluate theaccuracyof Taylor'sreportsof his observations,wetook four approaches. First, the report written byGillespie and Wolle regarding the results of theobservationsin 1899 was studied in detail to deter-mine the amount of work that the pig iron loadersdid and their rates of pay. Second, an analysis wasmade of the weather conditions at Bethlehem dur-ing this time period. Third, the personal diary ofRobertSayre, second largeststockholderat Bethle-hem, was studied. Fourth,fromthese new findings,lessons were derived for managementscholars forthe new millennium.A number of importantconsiderations are criti-cal in examining Taylor's pig iron story.One of themost significantis the natureof the productand thelayout of the shipping area at Bethlehem Iron. Asecond is the process that was used in loading theiron forshipment. A third is the performanceof theworkers and the costs associated with the work.

Layout and LoadingPigs and piles. In 1899 at Bethlehem, a pig ofiron (or ingot; 92 pounds) was 32 inches long, 41/2inches high, and 4 inches wide. These pigs wereorganized for loading by first putting them into"basic piles." Each pile consisted of 390 pigs and

was approximately2 feet high, 2 feet deep, and 35feet long. Then the workers added the basic pilestogetherto create a pile of full pigs 10 feet tall. Asseen in Figure la, the final result was 12 rows with5 basic piles perrow and then a shorterrow in frontthat consisted of just over 2.5 basic piles. The rea-son for the shorter row was to make it possible toerect planks supportedby wooden blocks from thepile of full pigs to the gondola car, located directlyin front of the short pile. The men could then pickup the pigs, walk on the plank, and put them intothe car.Gangs and gondolas. In the period March-May1899, two types of standardgauge, wood gondolarailway cars were being used at Bethlehem. Ac-cording to John O'Connor,a freight car historian,the older of the two types was the 1869 gondola,which was 30 feet long and made to hold 25,000pounds; the newer was the 1880 gondola, whichwas 33 feet long and made to hold 36,000 pounds(J. O'Connor, personal interview, September 2,1997). In either case, it was possible to line up tencars in front of a full pile and begin loading.As already noted, planks would be placed fromthe top of the gondola car to the frontportionof thepile, which was five feet high (again,see Figurela)and three feet fromthe car. Two people in the gangwould remain in the car, and the rest would bringthe pig iron to them to be stacked neatly in thegondola so that the car would not tilt in transit andderail.The gangwould startwith level 1 of the pileand then move on to level 2. As the pig iron loadingcontinued, the top of the pile would be reducedand the elevation of the planks would be increased,so that the men could load levels 3, 4, and 5.This explanation fits well with Taylor'sdescrip-tion and gives the impression that the loading was

both simple and routine. In fact, it was not sosimple, for four reasons we discovered after carefulanalysis of the original documents but that Taylorfailed to include when he told his pig iron story.First, considerable time was requiredto adjust thewooden blocks that were needed to support theplanks (Gillespie & Wolle, 1899). Second, duringbad weather the workers had to walk very carefullyon the ingots and the planks, thus reducing theiroutput-and weatherin this geographicregiondur-ing the winter and spring was sometimes brutalThe following sections examine each of these.

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(AllentownDaily Call, 1899). Third, controlled ex-


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Wregeand HodgettsFIGURE 1

Configurations of Iron to Be Loaded(la) A Full Pile of Pigs

10'

(lb) Typesof Pocket Casts

Type 1 cast, hemmedin on all sides.Average oading time =.576 minutesType 2 cast, hemmedin on two sides.Average loading time=.548 minutes

Type 3 cast, hemmedin frontand rear.Averageloading time =.552 minutes

periments conducted by Gillespie and Wolle in themiddle of March 1899 revealed that the work doneby each of the work teams varied sharply-as didthe labor cost per ton (see Table 1). So from the verybeginning there were different amounts beingloaded by different work teams, and Taylor and hisassociates were having trouble determining bothstandard work levels and incentive rates. Fourth,much of the loading was actually done from whatwere called "pocketed casts." These were piles ofpigs located in various configurations around the

yard and containing special pig iron orders of 25tons each, as shown in Figure lb. The average timeit took a man to load a pig from a pile when walking1 to 15 feet in good weather was .271 minutes; incontrast, loading from pocketed casts could re-quire, as can be seen in Figure lb, as much as .576minutes per pig because of the configuration of thecasts (Gillespie & Wolle, 1899). Therefore, Taylorhad to raise the pay rate for loading from pocketedcasts, in some cases to as much as $0.0700 per longton, and this significantly influenced overall costs.

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Academy of Management JournalTABLE1Controlled Observations of Pig Iron Loadinga

Factors Friday, March 10 Saturday, March 11 Monday, March 13Storage conditions Pile of 17.9 long tons (pocketed) Pile of 25.7 long tons (pocketed) Pile of 16.6 long tons (pocketed)Type of pig Half: 46 pounds Full: 92 pounds Full: 92 poundsTotal pounds loaded 40,096 (17.9 x 2,240) 57,568 (25.7 X 2,240) 37,184 (16.6 X 2,240)Pigs loaded 872 (40,096/46) 626 (57,568/92) 404 (37,184/92)Tons loaded 17.9 (40,096/2,240) 25.7 (57,568/2,240) 16.6 (37,184/2,240)Walk on level 5 feet 5 feet 7 feetWalk on plank 12'3" rise 10'6" rise 2'9" riseTop of car 2'6" above the plank 2'6" above the plank 2'6" above the plankSize of gang 4 men 12 men 10 men(2 in the car, 2 loading) (2 in the car, 10 loading) (2 in the car, 8 loading)Time spent loading 52.5 minutes 54.0 minutes 14.0 minutesWeather conditions Cloudy, 50?, Cloudy, 55?, Fair, 60?,clear, milder clear, milder cloudy, threateningTons per man 4.48 (17.9/4) 2.14 (25.7/12) 1.66 (16.6/10)Tons loaded per man per minute 0.08533 (4.48/52.5) 0.03963 (2.14/54.0) 0.1660 (1.66/10)Tons loaded per man in 1 hour 5.12 (0.08533 X 60) 2.38 (0.039630 X 60) 9.96 (0.1660 x 60)Tons loaded per man in 10 hours 51.2 (5.12 X 10) 23.8 (2.38 X 10) 99.6 (9.96 X 10)Tons loaded by gang 204.8 (51.2 X 4) 285.6 (23.8 x 12) 996 (99.6 X 10)Cost to load $4.60 ($1.15 X 4) $13.80 ($1.15 X 12) $11.50 ($1.15 x 10)

(4 men) (12 men) (10 men)Cost per ton $0.022461 ($4.60/204.8) $0.048319 ($13.80/285.6) $0.011546 ($11.50/996)a Source: Gillespie and Wolle (1899: 23-28).

In all likelihood, Tayloroverlookedthese problemsbecause the work approachwas eventually revisedand the new one was easier to explain.Performanceand Pay

Gillespie and Wolle's ongoing analysis led themto conclude that the initial method of loading thepigs was inefficient. Too much time was lost inplacing the planks in their proper position andsupporting them with blocks of wood. So they de-signed metal hangersthat hooked over the side of agondola car, hanging two feet below the top of thecar. The hangers made it possible for one man toplace one end of a plankon a pile and the otherendin the hangers,thus eliminatingthe need to arrangethe wooden blocks on the railway tracks.Gillespie and Wolle also met with Taylor to de-termine the piece rate incentive plan. Taylor hadset a rate of $0.0375 per long ton but found that themen would not load pig iron at this rate. Therewere two reasons for this reluctance. One was thatthe day ratewas $1.15, and a worker would have toload 31 long tons in orderto make more than thisamount ($0.0375 x 31 = $1.16). The second reasonwas that the work of loading the increased tonnagewas extremely fatiguing, as will be seen shortly,and many loaders found that aftera day or two ofloading they had to be reassignedto otherwork ona day rate basis because they could not continuetheir loading efforts.As a result, a revised incentive

plan based on how farthe workershad to carrytheiron was introduced. The piece rate per ton wasincreased to $0.0438 for those who were loadingpig iron piled no more than 15 feet from the side ofthe car and not more than 5 feet below the top edgeof the car. For those who had to walk greaterdis-tances or faced obstacles in carryingthe iron, therate went as high as $0.0700 per ton (Gillespie &Wolle, 1899).Under the revised incentive plan, a few workerscontinued to load the cars, but the others had be-come too fatiguedto remain on the incentive plan.So Gillespie and Wolle again changed the system.Each man was now assigned to a gondola, and hewould simply throw the pigs into the car.With thisarrangement, ome workers were able to makemoremoney by loading the pig iron under the incentivesystem than by accepting the $1.15 day rate. Ofcourse, the actual wages earned depended on thedistance the iron had to be carried,the elevation ofthe planks, and the difficulty of the loading. More-over, most workers were unable to make morethan$0.90 a day on the piece rate system, and so theychose to go back to the day rate of $1.15. However,two workers, Henry Noll and Simon Conrad, didprofit from the incentive system because they wereloading from distant pocketed casts and were thuspaid as much as $0.070 per long ton. Yet not eventhey worked on the piece rate system every day.They needed time to rest and recover their energy.As seen in Table 2, in March 1899 Noll was on

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TABLE 2Henry Noll and Simon Conrad's Work Recordsa

Date Day Type of Pay DaysNollMarch30-31 Thursdayand Friday Incentive 2 daysApril 1, 3, 4 Saturday,Monday,and Tuesday Incentive 3 daysApril 5-14 Wednesday-Friday Daywork 9 daysApril 15 Saturday Incentive 1 dayApril 17-18 Mondayand Tuesday Daywork 2 daysApril 19 Wednesday Incentive 1 dayApril 20 Thursday Daywork 1 dayApril 21, 22, 24-27 Friday-Thursday Incentive 6 daysApril 28-29 Fridayand Saturday Daywork 2 daysMay 1-6, 8 Monday-Saturdayand Monday Daywork 7 daysMay 9 Tuesday Incentive 1 dayMay 10-11 Wednesdayand Thursday Daywork 2 daysMay 12-13 Fridayand Saturday Incentive 2 daysMay 15-16 Mondayand Tuesday Daywork 2 daysMay 17-18 Wednesdayand Thursday Incentive 2 daysMay 19-20 Fridayand Saturday Daywork 2 daysMay 22-25 Monday-Thursday Incentive 4 daysMay 26 Friday Daywork 1 dayMay 27-29 Saturdayand Monday Incentive 2 daysConradMay 1-5 Monday-Friday Daywork 5 daysMay 6 Saturday Incentive I1dayMay 8 Monday Daywork 1 dayMay 9-10 Tuesdayand Wednesday Incentive 2 daysMay 11 Thursday Daywork 1 dayMay 12 Friday Incentive 1 dayMay 13 Saturday Daywork 1 dayMay 15-16 Mondayand Tuesday Incentive 2 daysMay 17 Wednesday Daywork 1 dayMay 18-19 Thursdayand Friday Incentive 2 daysMay 20, 22-24 Saturdayand Monday-Wednesday Daywork 4 daysMay 25-27, 29 Thursday-Saturdayand Monday Incentive 4 days

aSource:Wregeand Greenwood(1899).

the piece rate system for only 2 days. During Apriland May of that year, he was on the piece ratesystem only 11 days each month and was paid on aday work basis for the remaining 14 work days ineach month. A close analysis of Table 2 shows that,in early April 1899, Noll worked under the incen-tive payment plan for 3 days and then returned today work for 9 days. Later in the month, he worked6 days on incentive (a day off, Sunday, fell in themiddle of this work period) and then went on dayrate for 9 days. Only at the end of May did he worksteadily on the incentive system. Of course, some ofthe occasions on which he was paid a day rate werea result of the weather-but many were not. This isevident (see Table 2) from the records of the otherloader, Simon Conrad, who had 12 incentive daysduring May. Six of these days were ones on whichNoll was on day rate! So it is highly likely that Nollcould also have worked on incentive these days.Why did he not? Fatigue was a key reason.

Another factor that was never explained by Tay-lor is how the pig iron handlers could have savedthe company money, given that there were so manycosts associated with their efforts. Taylor reportedthat his goal was to load a long ton at a cost of$0.0500 (Taylor, 1901). In fact, this goal was impos-sible, given that workers could earn more than$0.0500 by loading from the pocketed casts, wherethe rates were as high as $0.0700 per long ton. Howmuch, then, did Taylor save the company with hisnew method of loading the iron?In analyzing the costs for the 7,490 long tons thatwere actually loaded from March 30 through May31, 1899, it is important to realize that only 27percent (2,015/7,490) of this work was done underthe incentive plan. The bulk of the tonnage wasloaded by day gangs paid $0.0940 per ton. Exhibit 1(next page) provides an analysis of these data.So Taylor's story about loading the pigs at$0.0500 per ton was not true, although he did man-

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Academy of ManagementJournalEXHIBIT1Costs for Loading Pig Iron at Bethlehem IronCompany,March 30-May 31, 1899: The OldMethod versus Taylor's Modified Approach

Old method:Total cost of loading 7,490 long tons $677.10under day rateof $0.0904/ton

Modifiedapproach:Amount Loaded under Piece Rate

Worker Long Tons Amount EarnedNoll 745 $ 41.58Conrad 457 23.01All others 813 24.32Total 2,015 $ 88.91

Cost of Loading Remaining Amount7,490 longtons

-2,015 long tons loaded underpiece rate5,475 long tons left to be loadedunder day rate ($0.904/ton) $494.94

Totalcost of loading7,490 ongtons $ 88.91undermodifiedapproach,March30-May31,1899 494.94$ 583.85

Savingsbasedon use of modified $ 677.10approach -583.85$ 93.25

age to reduce the overall cost of loading the 7,490long tons by a total of $93.25 (see Table 3). On theotherhand, he omitted a significantadditional cost:Because the pig iron handlers were now throwingthe iron into the car,there would be damageto thegondolas, and these costs would be billed back toBethlehem.LESSONSTO BE LEARNED

The pig iron observations offer some very usefullessons to management researchers, especiallythose in the management history area.The follow-ing is a discussion of five of the most useful.Anecdotal Data Are Often Erroneous

Most of what managementscholars know aboutthe pig iron observations has been learned fromsecondary sources, such as Taylor's (1911) Princi-

pies of Scientific Management, or from current text-books. In Taylor'scase, he simplified the observa-tions by presenting only some of the information.As a result, the story is fluid and consistent, but itomits many significant facts, as reported here. Inretrospect,it is evident that Taylortook some of thefacts associated with the observations and wovethem togetherinto a coherent and logical storythatintrigued his audience.In fairness, Tayloris not the only person to havepresented erroneous anecdotal data.Manymanage-ment textbook authors have drawn on secondarysources in presenting Taylor's studies. In the pro-cess, they have embellished the data and added"facts" hat aresimply not true. As a result,Taylor'sanecdotes have now taken on mythical propor-tions. For example, the data from Gillespie andWolle show that, afterthey had conducted one dayof walking experiments with a group of sevenworkers,Gillespie and Wolle assigned the pig ironhandlers to their tasks. In contrast to what somebasic textbooks report, Taylor and his assistantsconducted no training of workers and made norefined adjustments to the loading routines. Theonly changes that were made were in the amount ofmoney paid per long ton (up to $0.0700 for somepocketed casts)and the way the workers loaded thecars (initially in teams and then individually).

Primary Sources Must Be ConsultedThe second lesson to be learned formanagementhistorians is that original sources must be exam-ined because they offer a more complete, moredetailed picture. The data provided by Gillespieand Wolle clearly show that the pig iron loadingtechniques had to be continually changed becausethe work was too demanding and the money wasnot sufficiently motivational.Additionally, original documents reveal thatTaylor's primary interest in conducting these ob-servations was probablyto convince JosephWhar-ton, Bethlehem's primary stockholder, to let himbuy stock at a reduced price (Taylor, 1899). Tay-lor's observations may well have been influencedby his attemptsto ingratiatehimself with the majorstockholders, who knew little about what he wasdoing and were likely to believe his reportsof greatsuccess. In fact, RobertSayre, who was at Bethle-hem when Taylorwas supposedly saving the com-pany money, wrote in his diary for April 8, 1899,thatTaylorwas "causingagreatdeal of money to bespent unnecessarily" (Robert Sayre Diary, 1899).

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Wregeand HodgettsAll Data Have Inconsistencies

One of the reasons why Taylor's pig tale hassurvived for so long is that it has no inconsisten-cies. Everythingin the story fits togetherneatly. Infact,an analysis of the primarydata associated withthese observations shows that a number of thingsmade it difficult to state definitively what was hap-pening and to measure the full bottom-line impactof the work. When there are no inconsistencies inthe data, one has to wonder what has been left outof the calculations.For example,beforeundertaking he studies, Tay-lor relied on datageneratedby Gillespie and Wollefrom company records in March 1899. They foundthat a total of 3,430 long tons had been loaded in2,697 hours at a cost of $310.10, or $0.1106 per ton(3,430/$310.10),and that the average person loaded12.7 tons daily (Gillespie & Wolle, 1899). Theserecords, however, were inadequatebecause they didnot cover the number of men loadingthe iron, howthe iron was stored(whether n unobstructedpiles orpocketed casts), the distance the iron had to be car-ried,the heightof the planks,the type of railwaycarsbeingloaded,or the weatherconditionsfromMarch1to March 15, 1899.Second, the cost of loading a pig varied consid-erably, as seen in Table 1. One of the determiningfactors was how long the crews worked.The datainthis table show that the crew loading iron on March13 did so at a cost of less than 2 cents per ton, butthey worked for only 14 minutes. The other twocrews worked for a little less than 1 hour. Giventhat the fatigue factorwas critical in this work andthe typical workday was 10 hours, how valuablewere findings that were based on less than 60 min-utes of work?Third, when each workerwas assigned his owngondola to load and the pigs were thrown into thewooden carrather han stackedneatlyin it, the usefullife of the car would have been reduced.The reasonthe pigshadbeen stackedwas to ensurethatthey didnot slide about and cause excessive wearand tearona gondola'sbearingsand undercarriage,njuriesthatwould cause derailment.Damage romthis new load-ing methodwould have been costly,and the railroadwould have passed these costs on to Bethlehem.However, this fact was never exploredby Gillespieand Wolle, an omission that leaves one to ponderwhat the long-runcost of loadingthe pigs underthisnew arrangementwould have been.

Replication Is the Hallmark of Good ScienceThere is no reported evidence of other compa-

drive down their own loading costs. Yet such evi-dence would be the best proofthat the observationsdid indeed produce the results that Taylorcited. Inevery science, replication is critical to theory vali-dation.One reasonforthe lack of replication is undoubt-edly that Taylor's approach was no more efficientthan the old method of loading iron. Any companythat carefully examined the costs and the savingswould have quickly concluded that the prize wasnot worth the pursuit.A second reason overlookedby most by research-ers is that Taylor's observations could not haveadded much to the company's bottom line, even ifeverything worked according to plan. His statedobjective was to cut the cost of loading pig ironfrom $0.0904 per long ton to $0.0500, thus savingthe company $0.0404 per long ton. Overlookingthefact that his payment plan, with its incentives run-ning as high as $0.070 per long ton, made a $0.0404saving impossible, one must consider the fact thateven if Taylor had been totally successful in hisefforts,he would have saved Bethlehem Iron a totalof only $302.60 (7,490 long tons X .0404). So for the50 days thatthe observationslasted, the firm wouldhave been able to reduce expenses by a mere $6.05a day!When othercompanies analyzed the value ofTaylor's approach,it is likely thatthey also realizedthatall of this effortwould, atbest, produce little (ifany) savings. This calculation was undoubtedlywhy there were no large-scale replications of thestudy. Taylortold a good tale, but he could not sellit to senior-level managers who focused on factsand not anecdotes.Digital Archiving Is Now Critical

In 1994, two national groups,the CommissiononPreservationand Access and the ResearchLibrariesGroup,created the Task Force on Digital Archives.Since then, this not-for-profittask force has beenextremely active in helping to develop guidelinesfor ensuring the successful transferand protectionof digital material fromone generationof computertechnology to another. In particular, the group ishelping archivists organize, preserve, and protectaccess to a wide range of stored resources by: (1)compiling and distributing guidelines, standards,and best practices for digital preservation, (2) de-veloping varied means to coordinate digital preser-vation activities within institutions, and (3) help-ing to formulate institutional policies foracquiring,converting, storing, and maintaining digital mate-rials (Hedstrom & Montgomery, 1998). As thesekinds of effortscontinue to make headway, recordssuch as those used in the current research will be

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Academy of ManagementJournalbetter protected, and the ability to review and an-alyze original documentation will be significantlyincreased.THE VALUEOF THEOBSERVATIONS ORTHENEW MTTT.ENNIUM

In retrospect, the 1899 pig iron observations areimportantbecause they show that one of the pri-mary goals of managementhas not changed in overa century:to reduce costs. At the same time, how-ever, the observationspoint out the importance ofresearchers being more systematic and sophisti-cated in their approach to reaching their goals.Taylor and his associates made copious mistakes,the most importantbeing that they simplified theresults of their study and glossed over the incon-sistencies. In the new millennium, where hyper-competition will rule the day, firms that repeatTaylor's mistakes will find themselves unable tocompete effectively.A second and complementary conclusion thatemerges from the reanalysis of Taylor's observa-tions is that"benchmarking"s goingto be a criticalactivity in the new millennium. In fact, this ap-proach, and related strategies, are proving ex-tremely important in helping organizationsmain-tain a competitive stance. If Taylor and hisassociates had gone farther n studying all the ele-ments influencing pig iron handling, they mighthave realized quite clearly that their cost figureswere erroneous. Additionally, they did not get theworkers involved in the process via feedback re-garding how the work could be done more effi-ciently. Today many enterprises are sidesteppingthis problem by creating empowerment programs.Admittedly, empowerment was not a concept thatwould have been accepted in 1899, but that obser-vation helps reinforce our point: new methodsmust be continually introduced if organizations'managements hope to increase their productivitylevels.A third useful point to be derived from the Taylorstudies is that in the new millennium, increasedfocus must be given to the scientific collection ofdata. Too much of Taylor, Gillespie, and Wolle'swork was limited in scope and value. Forexample,the controlled observationsthat were conducted inMarch 1899 and reported in Table 1 did not con-tribute any substantive value to the study becausethe conditions under which each team workedwere significantly different,thus making it impos-sible to answerkey questions like these: What is theideal work crew size? How do the working condi-tions correlatewith the amount of output per day?

tics of the workers that results in some peopledoing more work than others? Even more impor-tantly, if these work crews continued working forthe entire ten-hour day, what conclusions couldhave been drawn regarding how to organize thecrews for maximum efficiency?A fourth importantpoint is that anecdotal dataare no substitute for quantitative analysis. Modernorganizations pursuinghigher-qualityoutputshavenow realized that record keeping, charting, feed-back, and objectiveanalysis are far more importantthan anecdotes. After studying some of America'smost successful corporations, Hodgetts (1998)found that all of them used quantitativeand ongo-ing measures to determinetheir quality and perfor-mance. Anecdotes typically smooth out inconsis-tencies and lead to misinterpretationof data-andthese actions result in erroneous conclusions. Inthe new millennium, managers and scholars willneed to pay far less attentionto story telling and farmore to data collection and analysis.In conclusion, the major reason for examiningthe pig iron observations is to reemphasize thatreduced cost has long been and remains a majorgoal of management.However, the tools and tech-niques contemporary organizations must use topursue this objectivewill have to be different fromthose of the past. What Taylor did was standardpractice for his day-and the results show that hereally did not accomplish much more thangeneratea story that has been retold and refashioned in somany ways that what the typical managementreader"knows"about what happened atBethlehemIron a century ago is more fiction than fact. In thenew millennium, managers will have to increas-ingly focus on data collection and analysis andfight the tendency to accept anecdotes and hearsayas accurate. In an emergingworld of hypercompe-tition, this lesson could spell the difference be-tween success and failure.

REFERENCESAllentown Daily Call. 1899. Microfilm records of

weather conditions. March-April.George,C. 1972. History of management thought (2nded.) EnglewoodCliffs,NJ:Prentice-Hall.Gillespie, G.,&Wolle, H. 1899. Reporton the establish-ment of piecework in connection with the loadingof pig-iron at the works of the Bethlehem Iron Co.,South Bethlehem, Pennsylvania (compiled June17). Hoboken, NJ: Frederick W. Taylor Collection,Stevens Institute.Hedstrom,M., &Montgomery,S. 1998. Digital preserva-tion needs and requirementsin RLGmember insti-Is there any difference in the physical characteris-

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Wregeand HodgettsHoagland, J. 1955. Management before Frederick Taylor.Academy of Management Proceedings: 15-24.Hobson, T. 1899. The Philadelphia iron market in 1898.Iron Age, January 5: 21.Hodgetts, R. M. 1998. Measures of quality & high per-formance. New York: American Management Asso-ciation.Iron Age. 1899. March 5: 23.Marsh, E. R. 1975. The harmonogram of KarolAdamiecki. Academy of Management Journal, 18:358-364.Robert Sayre Diary. Easton, PA: National CanalMuseum Archives.South Bethlehem Globe. 1898. May 27: 1. Bethlehem,PA: Archives of the Moravian Church.Taylor, F. 1898. F. Taylor to R. Davenport, January 3. InFrederick Taylor's papers. Hoboken, NJ: FrederickW. Taylor Collection, Stevens Institute.Taylor, F. 1899. F. Taylor to J. Wharton, March 20. InFrederick Taylor's papers. Hoboken, NJ: FrederickW. Taylor Collection, Stevens Institute.Taylor, F. W. 1901. Discussion of H. L. Gantt paper.American Society of Mechanical Engineers Trans-actions, December 5: 119.

Taylor, F. W. 1911. Principles of scientific manage-ment. New York: Harper.Wrege, C., & Greenwood, R. 1998. Frederick W. Taylor's

"pig iron loading observations" at Bethlehem, March10, 1899-May 31, 1899: The real story. Canal His-tory and Technology Proceedings, 17: 189-191.Wrege, C., &Perroni, A. 1974. Taylor's pig-tale: A histor-ical analysis of Frederick W. Taylor's pig-iron exper-iments. Academy of Management Journal, 27:6-27.Wren,D. 1994. The evolution of management thought.New York: Wiley.Charles D. Wrege received his Ph.D. from New YorkUniversity. He is the Academy of Management historianand archivist and the curator of the History of Manage-ment Theory Collection at Cornell University. His re-search focus is in management history, with particularemphasis on Frederick W. Taylor.Richard M. Hodgetts received his Ph.D. from the Univer-sity of Oklahoma. He is a professor of strategic manage-ment at Florida International University. His current re-search focuses on strategy in multinational enterprisesand the use of high-performance work groups in theinternational arena.

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