Frederick Winslow Taylor (March 20, 1856 March 21, 1915) was an American mechanical engineer who sought

t to improve industrial efficiency.[1] He is regarded as the father of scientific management and was one of the first management consultants.[2] Taylor was one of the intellectual leaders of the Efficiency Movement and his ideas, broadly conceived, were highly influential in the Progressive Era. biogragraphy Taylor was born in 1856 to a wealthy Quaker family in Germantown, Philadelphia, Pennsylvania. Taylor's father, Franklin Taylor, a Princetoneducated lawyer, built his wealth on mortgages.[3] Taylor's mother, Emily Annette Taylor (ne Winslow), was an ardent abolitionist and a coworker with Lucretia Mott. His father's ancestor, Samuel Taylor, settled in Burlington, New Jersey, in 1677. His mother's ancestor, Edward Winslow, was 1 of the 15 original Mayflower Pilgrims that brought servants or children, and 1 of 8 that had the honorable

distinction of Mister. Winslow served for many years as the Governor of the Plymouth colony. Educated early by his mother, Taylor studied for two years in France and Germany and traveled Europe for 18 months.[4] In 1872, he entered Phillips Exeter Academy in Exeter, New Hampshire, with the plan of eventually going to Harvard and becoming a lawyer like his father. In 1874, Taylor passed the Harvard entrance examinations with honors. However, allegedly due to rapidly deteriorating eyesight, Taylor chose quite a different path. Instead of attending Harvard, Taylor became an apprentice patternmaker and machinist, gaining shop-floor experience at Enterprise Hydraulic Works in Philadelphia (a pump-manufacturing company whose proprietors were friends of the Taylor family). He left his apprenticeship for 6 months, and represented a group of New England machine tool manufacturers at Philadelphia's centennial exposition. Taylor finished his 4 year apprenticeship, and then in 1878 he became a

machine shop laborer at Midvale Steel Works. At Midvale, Taylor was quickly promoted to time clerk, journeyman machinist, gang-boss over the lathe hands, machine shop foreman, and then research director and finally chief engineer of the works (while maintaining his position as machine shop foreman). Taylor's fast promotions surely reflected not only his talent but also his family's relationship with Edward Clark, partial owner of Midvale Steel. (Edward Clark's son Clarence Clark, who was also a manager at Midvale Steel, married Taylor's sister.) Early on at Midvale, working as a laborer and machinist, Taylor recognized that workmen were not working their machines, or themselves, nearly as hard as they could (which at the time was called "soldiering") and that this resulted in high labor costs for the company. When he became a foreman he expected more output from the workmen and in order to determine how much work should properly be expected he began to study and analyze the productivity of both the

men and the machines (although the word "productivity" was not used at the time, and the applied science of productivity had not yet been developed). His focus on the human component of production eventually became Scientific Management, while the focus on the machine component led to his famous metalcutting and materials innovations. While Taylor worked at Midvale, he and Clarence Clark won the first tennis doubles tournament in the 1881 US National Championships, the precursor of the US Open.[1] Taylor became a student of Stevens Institute of Technology, studying via correspondence[5] and obtaining a degree in mechanical engineering in 1883. On May 3, 1884, he married Louise M. Spooner of Philadelphia. From 1890 until 1893 Taylor worked as a general manager and a consulting engineer to management for the Manufacturing Investment Company of Philadelphia, a company that operated large paper mills in Maine and Wisconsin. He spent time as a

plant manager in Maine. In 1893, Taylor opened an independent consulting practice in Philadelphia. His business card read "Consulting Engineer Systematizing Shop Management and Manufacturing Costs a Specialty". Through these consulting experiences, Taylor perfected his management system. In 1898, Taylor joined Bethlehem Steel in order to solve an expensive machine shop capacity problem. As a result, he and Maunsel White, with a team of assistants, developed high speed steel, which paved the way for greatly increased mass production. Taylor was forced to leave Bethlehem Steel in 1901 after antagonisms with other managers. After leaving Bethlehem Steel, Taylor focused the rest of his career on publicly promoting his management and machining methods through lecturing, writing, and consulting. In 1910, due to the Eastern Rate Case, Frederick Winslow Taylor and his Scientific Management methodologies become famous worldwide. In 1911, Taylor introduces The Principles of Scientific

Management paper to the American mechanical engineering society (8 years after his Shop Management paper). On October 19, 1906, Taylor was awarded an honorary degree of Doctor of Science by the University of Pennsylvania.[6] Taylor eventually became a professor at the Tuck School of Business at Dartmouth College.[7] Late winter of 1915 Taylor caught pneumonia and one day after his fifty-ninth birthday, on March 21, 1915 he died. He was buried in West Laurel Hill Cemetery, in Bala Cynwyd, Pennsylvania. Work Taylor was a mechanical engineer who sought to improve industrial efficiency. Taylor is regarded as the father of scientific management, and was one of the first management consultants and director of a famous firm. In Peter Drucker's description, Frederick W. Taylor was the first man in recorded history who deemed work deserving of

systematic observation and study. On Taylor's 'scientific management' rests, above all, the tremendous surge of affluence in the last seventy-five years which has lifted the working masses in the developed countries well above any level recorded before, even for the well-to-do. Taylor, though the Isaac Newton (or perhaps the Archimedes) of the science of work, laid only first foundations, however. Not much has been added to them since even though he has been dead all of sixty years.[8] Future US Supreme Court justice Louis Brandeis coined the term scientific management in the course of his argument for the Eastern Rate Case before the Interstate Commerce Commission in 1910. Brandeis debated that railroads, when governed according to the principles of Taylor, did not need to raise rates to increase wages. Taylor used Brandeis's term in the title of his monograph The Principles of Scientific Management, published in 1911. The Eastern Rate Case propelled Taylor's ideas to the forefront of

the management agenda. Taylor wrote to Brandeis "I have rarely seen a new movement started with such great momentum as you have given this one." Taylor's approach is also often referred to as Taylor's Principles, or frequently disparagingly, as Taylorism. Taylor's scientific management consisted of four principles: 1. Replace rule-of-thumb work methods with methods based on a scientific study of the tasks. 2. Scientifically select, train, and develop each employee rather than passively leaving them to train themselves. 3. Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task" (Montgomery 1997: 250). 4. 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.

Managers and workers Taylor had very precise ideas about how to introduce his system: It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with management alone.[9] Workers were supposed to be incapable of understanding what they were doing. According to Taylor this was true even for rather simple tasks. 'I can say, without the slightest hesitation,' Taylor told a congressional committee, 'that the science of handling pig-iron is so great that the man who is ... physically able to handle pig-iron and is sufficiently phlegmatic and stupid to choose this for his occupation is rarely able to comprehend the science of handling pig-iron.[10]

Taylor believed in transferring control from workers to management. He set out to increase the distinction between mental (planning work) and manual labor (executing work). Detailed plans specifying the job, and how it was to be done, were to be formulated by management and communicated to the workers.[11] The introduction of his system was often resented by workers and provoked numerous strikes. The strike at Watertown Arsenal led to the congressional investigation in 1912. Taylor believed the laborer was worthy of his hire, and pay was linked to productivity. His workers were able to earn substantially more than those under conventional management,[12] and this earned him enemies among the owners of factories where scientific management was not in use. Propaganda techniques Taylor promised to reconcile labor and capital. With the triumph of scientific management, unions would have nothing left to do, and they

would have been cleansed of their most evil feature: the restriction of output. To underscore this idea, Taylor fashioned the myth that 'there has never been a strike of men working under scientific management', trying to give it credibility by constant repetition. In similar fashion he incessantly linked his proposals to shorter hours of work, without bothering to produce evidence of "Taylorized" firms that reduced working hours, and he revised his famous tale of Schmidt carrying pig iron at Bethlehem Steel at least three times, obscuring some aspects of his study and stressing others, so that each successive version made Schmidt's exertions more impressive, more voluntary and more rewarding to him than the last. Unlike [Harrington] Emerson, Taylor was not a charlatan, but his ideological message required the suppression of all evidence of worker's dissent, of coercion, or of any human motives or aspirations other than those his vision of progress could encompass.[13]

Management theory Taylor thought that by analyzing work, the "One Best Way" to do it would be found. He is most remembered for developing the stopwatch time study, which combined with Frank Gilbreth's motion study methods later becomes the field of time and motion study. He would break a job into its component parts and measure each to the hundredth of a minute. One of his most famous studies involved shovels. He noticed that workers used the same shovel for all materials. He determined that the most effective load was 21 lb, and found or designed shovels that for each material would scoop up that amount. He was generally unsuccessful in getting his concepts applied and was dismissed from Bethlehem Steel. Nevertheless, Taylor was able to convince workers who used shovels and whose compensation was tied to how much they produced to adopt his advice about the optimum way to shovel by breaking the movements down into their component elements and recommending

better ways to perform these movements. It was largely through the efforts of his disciples (most notably H.L. Gantt) that industry came to implement his ideas. Moreover, the book he wrote after parting company with Bethlehem Steel, Shop Management, sold well. Relations with ASME Taylor's own written works were designed for presentation to the American Society of Mechanical Engineers (ASME). These include Notes on Belting (1894), A Piece-Rate System (1895), Shop Management (1903), Art of Cutting Metals (1906), and The Principles of Scientific Management (1911). Taylor was president of the ASME from 1906 to 1907. While president, he tried to implement his system into the management of the ASME but was met with much resistance. He was only able to reorganize the publications department and then only partially. He also forced out the ASME's long-time secretary, Morris L. Cooke, and

replaced him with Calvin W. Rice. His tenure as president was trouble-ridden and marked the beginning of a period of internal dissension within the ASME during the Progressive Age.[14] In 1911, Taylor collected a number of his articles into a book-length manuscript which he submitted to the ASME for publication. The ASME formed an ad hoc committee to review the text. The committee included Taylor allies such as James Mapes Dodge and Henry R. Towne. The committee delegated the report to the editor of the American Machinist, Leon P. Alford. Alford was a critic of the Taylor system and the report was negative. The committee modified the report slightly, but accepted Alford's recommendation not to publish Taylor's book. Taylor angrily withdrew the book and published Principles without ASME approval.[15] Taylor published the trade book himself in 1912.

Henri Fayol (Istanbul, 29 July 1841Paris, 19 November 1925) was a French mining engineer and director of mines who developed a general theory of business administration.[1] He and his colleagues developed this theory independently of scientific management but roughly contemporaneously. He was one of the most influential contributors to modern concepts of management.

Biography Fayol was born in 1841 in a suburb of Istanbul, Ottoman Empire, where his father, an engineer, was appointed superintendent of works to build a bridge over the Golden Horn[1] (Galata Bridge). They returned to France in 1847, where Fayol studied at the mining school "cole Nationale Suprieure des Mines" in Saint-tienne. When 19 years old he started as an engineer at a mining company "Compagnie de Commentry-

Fourchambeau-Decazeville" in Commentry. By 1900 the company was one of the largest producers of iron and steel in France and was regarded as a vital industry.[1] Fayol became managing director in 1888, when the mine company employed over 1,000 people, and held that position over 30 years until 1918. In 1916 he published his experience in the book "Administration Industrielle et Gnrale", at about the same time as Frederick Winslow Taylor published his Principles of Scientific Management Theory Fayolism Fayol's work was one of the first comprehensive statements of a general theory of management.[2] He proposed that there were five primary functions of management and 14 principles of management[3]

Functions of management
1. to forecast and plan

2. to organize 3. to command 4. to coordinate 5. to control (French: contrler: in the sense that a manager must receive feedback about a process in order to make necessary adjustments).

Principles of Management
1. Division of work. This principle is the same as Adam Smith's 'division of labour'. Specialisation increases output by making employees more efficient. 2. Authority. Managers must be able to give orders. Authority gives them this right. Note that responsibility arises wherever authority is exercised. 3. Discipline. Employees must obey and respect the rules that govern the organization. Good discipline is the result of effective leadership, a clear understanding between management and workers regarding the

organization's rules, and the judicious use of penalties for infractions of the rules. 4. Unity of command. Every employee should receive orders from only one superior. like from top to bottom in an organization. 5. Unity of direction. Each group of organisational activities that have the same objective should be directed by one manager using one plan. 6. Subordination of individual interests to the general interest. The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole. 7. Remuneration. Workers must be paid a fair wage for their services. 8. Centralisation. Centralisation refers to the degree to which subordinates are involved in decision making. Whether decision making is centralized (to management) or decentralized (to subordinates) is a question of proper proportion. The task is to find the optimum degree of centralisation for each situation.

9. Scalar chain. The line of authority from top management to the lowest ranks represents the scalar chain. Communications should follow this chain. However, if following the chain creates delays, cross-communications can be allowed if agreed to by all parties and superiors are kept informed. 10. Order. People and materials should be in the right place at the right time. 11. Equity. Managers should be kind and fair to their subordinates. 12. Stability of tenure of personnel. High employee turnover is inefficient. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies. 13. Initiative. Employees who are allowed to originate and carry out plans will exert high levels of effort. 14. Esprit de corps. Promoting team spirit will build harmony and unity within the organization.

Fayol's work has stood the test of time and has been shown to be relevant and appropriate to contemporary management. Many of todays management texts including Daft[4] have reduced the six functions to four: (1) planning; (2) organizing; (3) leading; and (4) controlling. Daft's text is organized around Fayol's four functions....

Mary Parker Follett (3 September 1868 18 December 1933) was an American social worker, management consultant and pioneer in the fields of organizational theory and organizational behavior. She also authored a number of books and numerous essays, articles and speeches on democracy, human relations, political philosophy, psychology, organizational behavior and conflict resolution. Along with Lillian Gilbreth, Mary Parker Follett was one of two great women management gurus in the early days of classical

management theory. She admonished overmanaging employees, a process now known as micromanaging, as bossism and she is regarded by some writers as the mother of Scientific Management. As such she was one of the first women ever invited to address the London School of Economics, where she spoke on cutting-edge management issues. She also distinguished herself in the field of management by being sought out by President Theodore Roosevelt as his personal consultant on managing not-forprofit, non-governmental, and voluntary organizations. In her capacity as a management theorist, Mary Parker Follett pioneered the understanding of lateral processes within hierarchical organizations (which recognition led directly to the formation of matrix-style organizations, the first of which was DuPont, in the 1920s), the importance of informal processes within organizations, and the idea of the "authority of expertise"--which really served to modify the typology of authority developed by her German contemporary, Max Weber, who

broke authority down into three separate categories: rational-legal, traditional and charismatic.[2] Follett was born in Massachusetts and spent much of her early life there. In September 1885 she enrolled in Anna Ticknor's Society to Encourage Studies at Home.[3] In 1898 she graduated from Radcliffe College, but was denied a doctorate at Harvard on the grounds that she was a woman. Over the next three decades, however, she published many works, including:

The Speaker of the House of Representatives

The New State (1918) Creative Experience (1924) Dynamic Administration (1942) (this

collection of speeches and short articles was published posthumously) She recognized the holistic nature of community and advanced the idea of "reciprocal

relationships" in understanding the dynamic aspects of the individual in relationship to others. Follett advocated the principle of what she termed "integration," or noncoercive powersharing based on the use of her concept of "power with" rather than "power over." Her ideas on negotiation, power, and employee participation were highly influential in the development of the fields of organizational studies, alternative dispute resolution, and the Human Relations Movement.[citation needed] Follett contributed greatly to the win-win philosophy, coining the term in her work with groups. Her approach to conflict was to embrace it as a mechanism of diversity and an opportunity to develop integrated solutions rather than simply compromising.[4] She was also a pioneer in the establishment of community centers. Even though most of Mary Parker Follett's writings remained known in very limited circles until republished at the beginning of this decade (beginning with Pauline C. Graham's first-rate

work), her ideas gained great influence after Chester Barnard, a New Jersey Bell executive and advisor to President Franklin D. Roosevelt, published his seminal treatment of executive management, The Functions of the Executive.[5] Barnard's work, which stressed the critical role of "soft" factors such as "communication" and "informal processes" in organizations, owed a telling yet undisclosed debt to Follett's thought and writings. In addition, her emphasis on such soft factors paralleled the work of Elton Mayo at Western Electric's Hawthorne Plant, and presaged the rise of the Human Relations Movement, as developed through the work of such figures as Abraham Maslow, Kurt Lewin, Douglas McGregor, Chris Argyris, Dick Beckhard and other breakthrough contributors to the field of Organizational Development or "OD".[6] Her influence can also be seen indirectly perhaps in the work of Ron Lippitt, Ken Benne, Lee Bradford, Edie Seashore and others at the National Training Laboratories in Bethel, Maine, where TGroup methodology was first theorized and

developed.[7] Thus, Mary Follett's work set the stage for a generation of effective, progressive changes in management philosophy, style and practice, revolutionizing and humanizing the American workplace, and allowing the fulfillment of Douglas McGregor's management vision quantum leaps in productivity effected through the humanization of the workplace.[8] Follett's writings span the decades. In The New State, Follett ponders many of the social issues at hand today. "It is a mistake to think that social progress is to depend upon anything happening to the working people: some say that they are to be given more material goods and all will be well; some think they are to be given more "education" and the world will be saved. It is equally a mistake to think that what we need is the conversion to "unselfishness" of the capitalist class." [9] Pawelec, (1998) (now Ann Deschenes) found obscure reference pointing to Mary Parker Follet having coined the term "Transformational Leadership". She quote: Rusch, Edith A. (1991) in

"The social construction of leadership: From theory to praxis" discovered that"writings and lectures by Mary Parker Follet from as early as 1927 contained references to transformational leadership, the interrelationship of leadership and followership, and the power of collective goals of leaders and followers" (p. 8). Burns makes no reference to Mary Parker Follet in Leadership, Nonetheless Rusch was able to trace what appear to be parallel themes in the works of Burns and Follet." Rusch presents direct references in Appendix A. Pawelec (Deschenes) found further parallels of transformational discourse between Follet's ( 1947,1987) work and Burns(1978).

Chester Irving Barnard (November 7, 1886 June 7, 1961) was an American business executive, public administrator, and the author of pioneering work in management theory and

organizational studies. His landmark 1938 book, The Functions of the Executive, sets out a theory of organization and of the functions of executives in organizations. The book has been widely assigned in university courses in management theory and organizational sociology.[2]

biography In his youth, Barnard worked on a farm, then studied economics at Harvard University, earning money selling pianos and operating a dance band. Harvard denied him a BA because of a technicality, but a number of universities later granted him honorary doctorates.[1] Barnard joined the American Telephone and Telegraph Company (now AT&T) in 1909. In 1927, he became president of the New Jersey Bell Telephone Company. During the Great Depression, he directed the New Jersey state relief

system.[2] He was elected a Fellow of the American Academy of Arts and Sciences in 1939.[3] He was president of the United Service Organizations (USO), 1942-45. Upon retiring from business, he served as president of the Rockefeller Foundation, 194852, and as chairman of the National Science Foundation, 1952-54.[2] End 1950s he was among the first members of the Society for General Systems Research. Work Barnard looked at organizations as systems of cooperation of human activity, and noted that they are typically short-lived. It is rare for a firm to last more than a century. Similarly most nations last for less than a century. The only organization that can claim a substantial age is the Roman Catholic Church. According to Barnard, organizations are not long-lived because they do not meet the two criteria necessary for survival: effectiveness and efficiency. Effectiveness, is defined the usual way: as being able to accomplish stated goals. In contrast, Barnard's meaning of

organizational efficiency differed substantially from the conventional use of the word. He defined efficiency of an organization as the degree to which that organization is able to satisfy the motives of the individuals. If an organization satisfies the motives of its members while attaining its explicit goals, cooperation among its members will last. Barnard was a great admirer of Talcott Parsons (19021979) and he and Parsons corresponded persistently. The two scholars would send manuscripts for commentary to each other and they would write long letters where they engage in a common theoretical discussion. The first correspondence between Barnard and Parsons began in the end of the 1930s and it persisted essentially to Barnards death in 1961. The Functions of the Executive Main article: The Functions of the Executive Barnard's classic 1938 book The Functions of the Executive discusses, as the title suggests, the

functions of the executive, but not from a merely intuitive point of view, but instead deriving them from his conception of cooperative systems. Barnard summarized the functions of the executive as follows:

Establishing and maintaining a system of communication; Securing essential services from other members; Formulating organizational purposes and objectives.

Authority and incentives Barnard formulated two interesting theories: one of authority and the other of incentives. Both are seen in the context of a communication system grounded in seven essential rules:

The channels of communication should be definite; Everyone should know of the channels of communication;

Everyone should have access to the formal channels of communication; Lines of communication should be as short and as direct as possible; Competence of persons serving as communication centers should be adequate; The line of communication should not be interrupted when the organization is functioning; Every communication should be authenticated.

Thus, what makes a communication authoritative rests with the subordinate rather than with his superior. Barnard's perspective had affinities to that of Mary Parker Follett and was very unusual for his time, and that has remained the case down to the present day. He seemed to argue that managers should obtain authority by treating subordinates with respect and competence. As for incentives, he proposed two ways of convincing subordinates to cooperate: tangible incentives and persuasion. He gives great importance to persuasion, much more than to

economic incentives. He described four general and four specific incentives. The specific incentives were: 1. Money and other material inducements; 2. Personal non-material opportunities for distinction; 3. Desirable physical conditions of work; 4. Ideal benefactions, such as pride of workmanship etc. Peter Ferdinand Drucker (November 19, 1909 November 11, 2005) was an influential writer, management consultant, and self-described social ecologist.[1]

Introduction Drucker's books and scholarly and popular articles explored how humans are organized across the business, government and the nonprofit sectors of society.[2] He is one of the best-known and most widely influential thinkers

and writers on the subject of management theory and practice. His writings have predicted many of the major developments of the late twentieth century, including privatization and decentralization; the rise of Japan to economic world power; the decisive importance of marketing; and the emergence of the information society with its necessity of lifelong learning.[3] In 1959, Drucker coined the term knowledge worker" and later in his life considered knowledge worker productivity to be the next frontier of management.[4] Peter Drucker gave his name to two institutions: the Drucker Institute and the Peter F. Drucker and Masatoshi Ito Graduate School of Management, both at Claremont Graduate University.[5] The annual Global Peter Drucker Forum in his hometown of Vienna Austria, honors his legacy. Biography Life

Drucker was of Jewish descent on both his paternal and his maternal sides,[6] but his parents converted to Christianity and lived in what he referred to as a "liberal" Lutheran Protestant household in Austria-Hungary.[7] His mother Caroline Bondi had studied medicine and his father Adolf Drucker was a lawyer and high-level civil servant.[8] Drucker was born in Vienna, the capital of Austria, in a small village named Kaasgraben (now part of the 19th district of Vienna, Dbling).[9] He grew up in a home where intellectuals, high government officials, and scientists would meet to discuss new ideas.[10] After graduating from Dbling Gymnasium, Drucker found few opportunities for employment in post-World War Vienna, so he moved to Hamburg, Germany, first working as an apprentice at an established cotton trading company, then as a journalist, writing for Der sterreichische Volkswirt (The Austrian Economist).[8] Drucker then moved to Frankfurt, where he took a job at the Daily Frankfurter General-Anzeiger.[11] While

in Frankfurt, he also earned a doctorate in international law and public law from the University of Frankfurt in 1931.[12] In 1933, Drucker left Germany for England.[13] In London, he worked for an insurance company, then as the chief economist at a private bank.[14] He also reconnected with Doris Schmitz, an acquaintance from the University of Frankfurt whom he married in 1934.[15] The couple permanently relocated to the United States, where he became a university professor as well as a free-lance writer and business consultant. In 1943, Drucker became a naturalized citizen of the United States. He then had a distinguished career as a teacher, first as a professor of politics and philosophy at Bennington College from 19421949, then for more than twenty years at New York University as a Professor of Management from 1950 to 1971. Drucker came to California in 1971, where he developed one of the country's first executive

MBA programs for working professionals at

Claremont Graduate University (then known as Claremont Graduate School). From 1971 to his death he was the Clarke Professor of Social Science and Management at Claremont Graduate University.[16] Claremont Graduate University's management school was named the "Peter F. Drucker Graduate School of Management" in his honor in 1987 (later renamed the "Peter F. Drucker and Masatoshi Ito Graduate School of Management"). He established the Drucker Archives at Claremont Graduate University in 1999; the Archives became the Drucker Institute in 2006. Drucker taught his last class in 2002 at age 92. He continued to act as a consultant to businesses and non-profit organizations well into his nineties. Drucker died November 11, 2005 in Claremont, California of natural causes at 95. Family

In 1934 Drucker married Doris Schmitz, whom he met at the University of Frankfurt. Their wedding certificate lists his name as "Peter Georg Drucker".[15] They had four children and six grandchildren and lived in Claremont, California.[16] Work and philosophy Early influences Among Peter Drucker's early influences was the Austrian economist Joseph Schumpeter, a friend of his fathers, who impressed upon Drucker the importance of innovation and entrepreneurship.[17] Drucker was also influenced, in a much different way, by John Maynard Keynes, whom he heard lecture in 1934 in Cambridge.[18] I suddenly realized that Keynes and all the brilliant economic students in the room were interested in the behavior of commodities, Drucker wrote, while I was interested in the behavior of people.[19] Over the next 70 years, Druckers writings would be marked by a focus on relationships among

human beings, as opposed to the crunching of numbers. His books were filled with lessons on how organizations can bring out the best in people, and how workers can find a sense of community and dignity in a modern society organized around large institutions.[2] As a business consultant, Drucker disliked the term guru, though it was often applied to him; I have been saying for many years, Drucker once remarked, that we are using the word guru only because charlatan is too long to fit into a headline.[20] As a young writer, Drucker wrote two pieces one on the conservative German philosopher Friedrich Julius Stahl and another called The Jewish Question in Germany that were burned and banned by the Nazis.[3] The 'business thinker' Drucker's career as a business thinker took off in 1942, when his initial writings on politics and society won him access to the internal workings

of General Motors (GM), one of the largest companies in the world at that time. His experiences in Europe had left him fascinated with the problem of authority. He shared his fascination with Donaldson Brown, the mastermind behind the administrative controls at GM. In 1943 Brown invited him in to conduct what might be called a "political audit": a two-year social-scientific analysis of the corporation. Drucker attended every board meeting, interviewed employees, and analyzed production and decision-making processes. The resulting book, Concept of the Corporation, popularized GM's multidivisional structure and led to numerous articles, consulting engagements, and additional books. GM, however, was hardly thrilled with the final product. Drucker had suggested that the auto giant might want to reexamine a host of long-standing policies on customer relations, dealer relations, employee relations and more. Inside the corporation, Druckers counsel was viewed as hypercritical. GM's revered

chairman, Alfred Sloan, was so upset about the book that he simply treated it as if it did not exist, Drucker later recalled, never mentioning it and never allowing it to be mentioned in his presence.[21] Drucker taught that management is a liberal art, and he infused his management advice with interdisciplinary lessons from history, sociology, psychology, philosophy, culture and religion.[2] He also believed strongly that all institutions, including those in the private sector, have a responsibility to the whole of society. The fact is, Drucker wrote in his 1973 Management: Tasks, Responsibilities, Practices, that in modern society there is no other leadership group but managers. If the managers of our major institutions, and especially of business, do not take responsibility for the common good, no one else can or will.[22] Drucker was interested in the growing effect of people who worked with their minds rather than their hands. He was intrigued by employees who

knew more about certain subjects than their bosses or colleagues and yet had to cooperate with others in a large organization. Rather than simply glorify the phenomenon as the epitome of human progress, Drucker analyzed it and explained how it challenged the common thinking about how organizations should be run. His approach worked well in the increasingly mature business world of the second half of the twentieth century. By that time, large corporations had developed the basic manufacturing efficiencies and managerial hierarchies of mass production. Executives thought they knew how to run companies, and Drucker took it upon himself to poke holes in their beliefs, lest organizations become stale. But he did so in a sympathetic way. He assumed that his readers were intelligent, rational, hardworking people of good will. If their organizations struggled, he believed it was usually because of outdated ideas, a narrow conception of problems, or internal misunderstandings.

Consulting career During his long consulting career, Drucker worked with many major corporations, including General Electric, Coca-Cola,[23] Citicorp, IBM, and Intel. He consulted with notable business leaders such as GEs Jack Welch;[24] Procter & Gambles A.G. Lafley;[25] Intels Andy Grove;[25] Edward Jones John Bachmann;[26] Shoichiro Toyoda, the honorary chairman of Toyota Motor Corp.; and Masatoshi Ito, the honorary chairman of the ItoYokado Group, the second largest retailing organization in the world.[27] Although he helped many corporate executives succeed, he was appalled when the level of Fortune 500 CEO pay in America ballooned to hundreds of times that of the average worker. He argued in a 1984 essay that CEO compensation should be no more than 20 times what the rank and file make especially at companies where thousands of employees are being laid off. This is morally and socially unforgivable, Drucker wrote, and we will pay a heavy price for it.[3]

Drucker served as a consultant for various government agencies in the United States, Canada and Japan. He worked with various nonprofit organizations to help them become successful, often consulting pro bono. Among the many social-sector groups he advised were the Salvation Army, the Girl Scouts of the USA, C.A.R.E., the American Red Cross, and the Navajo Indian Tribal Council.[28] In fact, Drucker anticipated the rise of the social sector in America, maintaining that it was through volunteering in nonprofits that people would find the kind of fulfillment that he originally thought would be provided through their place of work, but that had proven elusive in that arena. Citizenship in and through the social sector is not a panacea for the ills of postcapitalist society and post-capitalist polity, but it may be a prerequisite for tackling these ills, Drucker wrote. It restores the civic responsibility that is the mark of citizenship, and the civic pride that is the mark of community.[29]

Drucker's writings Drucker's 39 books have been translated into more than thirty languages. Two are novels, one an autobiography. He is the co-author of a book on Japanese painting, and made eight series of educational films on management topics. He also penned a regular column in the Wall Street Journal for 10 years and contributed frequently to the Harvard Business Review, The Atlantic Monthly, and The Economist. His work is especially popular in Japan, even more so after the publication of "What If the Female Manager of a High-School Baseball Team Read Druckers Management", a novel that features the main character using one of his books to great effect, which was also adapted into an anime and a live action film.[30] His popularity in Japan may be compared with that of his contemporary W. Edwards Deming.[31] Peter Drucker also wrote a book in 2001 called "The Essential Drucker". It is the first volume

and combination of the past sixteen years of Peter Drucker's work on management. The information gather is a collection from his previous findings, The Practice of Management (1954) to Management Challenges for the 21st Century (1999), this book offers, in Drucker's words, "a coherent and fairly comprehensive introduction to management". He also answers frequently asked questions from up and coming entrepreneurs who wonder the questionable outcomes of management.[16] Key ideas Several ideas run through most of Drucker's writings:

Decentralization and simplification.[32] Drucker discounted the command and control model and asserted that companies work best when they are decentralized. According to Drucker, corporations tend to produce too many products, hire employees they don't need (when a better solution would be

outsourcing), and expand into economic sectors that they should avoid. The concept of "Knowledge Worker" in his 1959 book "The Landmarks of Tomorrow".[33] Since then, knowledge-based work has become increasingly important in businesses worldwide. The prediction of the death of the "Blue Collar" worker.[34] A blue collar worker is a typical high school dropout who was paid middle class wages with all benefits for assembling cars in Detroit. The changing face of the US Auto Industry is a testimony to this prediction. The concept of what eventually came to be known as "outsourcing."[35] He used the example of front room and a back room of each business: A company should be engaged in only the front room activities that are core to supporting its business. Back room activities should be handed over to other companies, for whom these are the front room activities.

The importance of the non-profit sector,[36] which he calls the third sector (private sector and the Government sector being the first two.) Non-Government Organizations (NGOs) play crucial roles in countries around the world. A profound skepticism of macroeconomic theory.[37] Drucker contended that economists of all schools fail to explain significant aspects of modern economies. Respect of the worker. Drucker believed that employees are assets and not liabilities. He taught that knowledgeable workers are the essential ingredients of the modern economy. Central to this philosophy is the view that people are an organization's most valuable resource, and that a manager's job is both to prepare people to perform and give them freedom to do so.[38] A belief in what he called "the sickness of government." Drucker made nonpartisan claims that government is often unable or unwilling to provide new services that people

need or want, though he believed that this condition is not inherent to the form of government. The chapter "The Sickness of Government"[39] in his book The Age of Discontinuity formed the basis of New Public Management,[40] a theory of public administration that dominated the discipline in the 1980s and 1990s. The need for "planned abandonment." Businesses and governments have a natural human tendency to cling to "yesterday's successes" rather than seeing when they are no longer useful.[41] A belief that taking action without thinking is the cause of every failure.[42] The need for community. Early in his career, Drucker predicted the "end of economic man" and advocated the creation of a "plant community"[43] where an individual's social needs could be met. He later acknowledged that the plant community never materialized, and by the 1980s, suggested that volunteering in the nonprofit sector was the

key to fostering a healthy society where people found a sense of belonging and civic pride.[44] The need to manage business by balancing a variety of needs and goals, rather than subordinating an institution to a single value.[45][46] This concept of management by objectives forms the keynote of his 1954 landmark The Practice of Management.[47] A company's primary responsibility is to serve its customers. Profit is not the primary goal, but rather an essential condition for the company's continued existence.[48] A belief in the notion that great companies could stand among humankind's noblest inventions.[49]

Criticism of Drucker's work

The Wall Street Journal researched several of

his lectures in 1987 and reported that he was sometimes loose with the facts. Drucker was off the mark, for example, when he told an audience that English was the official language for all

employees at Japans Mitsui trading company. (Druckers defense: I use anecdotes to make a point, not to write history.) And while he was known for his prescience, he wasnt always correct in his forecasts. He predicted, for instance, that the nations financial center would shift from New York to Washington.[50] Others maintain that one of Druckers core conceptsmanagement by objectivesis flawed and has never really been proven to work effectively. Critic Dale Krueger said that the system is difficult to implement, and that companies often wind up overemphasizing control, as opposed to fostering creativity, to meet their goals.[51] Drucker's classic Concept of the Corporation criticized General Motors at a time when it was, in some ways, the most successful corporation in the world. Many of GM's executives considered Drucker persona non grata for a long time afterward. Alfred P. Sloan refrained from personal hostility toward Drucker, but even Sloan

considered Drucker's critiques of GM's management to be "dead wrong".[52] Awards and honors Drucker was awarded the Presidential Medal of Freedom by U.S. President George W. Bush on July 9, 2002.[53] He also received honors from the governments of Japan[54] and Austria.[55] He was the Honorary Chairman of the Peter F. Drucker Foundation for Nonprofit Management, now the Leader to Leader Institute, from 1990 through 2002.[56] In 1969 he was awarded New York Universitys highest honor, the NYU Presidential Citation.[57] Harvard Business Review honored Drucker in the June 2004 with his seventh McKinsey Award for his article, "What Makes an Effective Executive", the most awarded to one person.[58] Drucker was inducted into the Junior Achievement U.S. Business Hall of Fame in 1996.[59] Additionally he holds 25 honorary doctorates from American, Belgian, Czech, English, Spanish and Swiss Universities.[60] His 1954 book The Practice of Management was voted

the third most influential management book of the 20th century in a poll of the Fellows of the Academy of Management.[61] In Claremont, California, Eleventh Street between College Avenue and Dartmouth Avenue was renamed "Drucker Way" in October 2009 to commemorate the 100th anniversary of Drucker's birth.[62]

William Edwards Deming (October 14, 1900 December 20, 1993) was an American statistician, professor, author, lecturer and consultant. He is perhaps best known for his work in Japan. There, from 1950 onward, he taught top management how to improve design (and thus service), product quality, testing, and sales (the last through global markets)[1] through various methods, including the application of statistical methods.

Deming made a significant contribution to Japan's later reputation for innovative high-quality products and its economic power. He is regarded as having had more impact upon Japanese manufacturing and business than any other individual not of Japanese heritage. Despite being considered something of a hero in Japan, he was only just beginning to win widespread recognition in the U.S. at the time of his death.[2] President Reagan awarded the National Medal of Technology to Deming in 1987. He received in 1988 the Distinguished Career in Science award from the National Academy of Sciences.

Overview Deming's teachings and philosophy are best illustrated by examining the results they produced after they were adopted by Japanese industry, as the following example shows: Ford Motor Company was simultaneously manufacturing a car model with transmissions made in Japan and

the United States. Soon after the car model was on the market, Ford customers were requesting the model with Japanese transmission over the US-made transmission, and they were willing to wait for the Japanese model. As both transmissions were made to the same specifications, Ford engineers could not understand the customer preference for the model with Japanese transmission. Finally, Ford engineers decided to take apart the two different transmissions. The American-made car parts were all within specified tolerance levels. On the other hand, the Japanese car parts were virtually identical to each other, and much closer to the nominal values for the parts - e.g., if a part was supposed to be one foot long, plus or minus 1/8 of an inch - then the Japanese parts were all within 1/16 of an inch. This made the Japanese cars run more smoothly and customers experienced fewer problems. Engineers at Ford could not understand how this was done until they met Deming.[3]

Deming received a BSc in electrical engineering from the University of Wyoming at Laramie (1921), an M.S. from the University of Colorado (1925), and a Ph.D. from Yale University (1928). Both graduate degrees were in mathematics and physics. Deming had an internship at Bell Telephone Laboratories while studying at Yale. He later worked at the U.S. Department of Agriculture and the Census Department. While working under Gen. Douglas MacArthur as a census consultant to the Japanese government, he famously taught statistical process control methods to Japanese business leaders, returning to Japan for many years to consult and witness the economic growth he had predicted would come as a result of the application of techniques learned from Walter Shewhart at Bell Laboratories. Later, he became a professor at New York University while engaged as an independent consultant in Washington, D.C. Deming was the author of Out of the Crisis (19821986) and The New Economics for

Industry, Government, Education (1993), which

includes his System of Profound Knowledge and the 14 Points for Management (described below). Deming played the flute and drums and composed music throughout his life, including sacred choral compositions and an arrangement of The Star Spangled Banner.[4] In 1993, Deming founded the W. Edwards Deming Institute in Washington, D.C., where the Deming Collection at the U.S. Library of Congress includes an extensive audiotape and videotape archive. The aim of the W. Edwards Deming Institute is to foster understanding of the Deming System of Profound Knowledge to advance commerce, prosperity, and peace.[5] Family Born in Sioux City, Iowa, William Edwards Deming was raised in Polk City, Iowa on his grandfather Henry Coffin Edwards's chicken farm, then later on a 40-acre (16 ha) farm purchased by his father in Powell, Wyoming. He was the son of

William Albert Deming and Pluma Irene Edwards,[6] His parents were well educated and emphasized the importance of education to their children. Pluma had studied in San Francisco and was a musician. William Albert had studied mathematics and law. He was a direct descendant of John Deming,[7] (16151705) an early Puritan settler and original patentee of the Connecticut Colony, and Honor Treat, the daughter of Richard Treat (1584 1669) an early New England settler, Deputy to the Connecticut Legislature and also a Patentee of the Royal Charter of Connecticut, 1662. Deming married Agnes Bell in 1922, and together they survived the difficult college years. But in 1930, she died. Her death came a little more than a year after they had adopted a daughter, Dorothy. Deming made use of various private homes to help raise the infant, and following his marriage in 1932 to Lola Elizabeth Shupe, with whom he coauthored several papers, he brought her back home to stay. He and Lola had two more

children, Diana and Linda. Diana and Linda survive, along with seven grandchildren and three greatgrandchildren. Dorothy died in 1984 and Lola in 1986.[8] Early life and work In 1917, he enrolled in the University of Wyoming at Laramie, graduating in 1921 with a B.Sc. in electrical engineering. In 1925, he received an M.S. from the University of Colorado, and in 1928, a Ph.D. from Yale University. Both graduate degrees were in mathematics and mathematical physics. Deming worked as a mathematical physicist at the United States Department of Agriculture (192739), and was a statistical adviser for the United States Census Bureau (193945). He was a professor of statistics at New York University's graduate school of business administration (19461993), and he taught at Columbia University's graduate school of business (19881993). He also was a consultant for private business.

In 1927, Deming was introduced to Walter A. Shewhart of the Bell Telephone Laboratories by C.H. Kunsman of the United States Department of Agriculture (USDA). Deming found great inspiration in the work of Shewhart, the originator of the concepts of statistical control of processes and the related technical tool of the control chart, as Deming began to move toward the application of statistical methods to industrial production and management. Shewhart's idea of common and special causes of variation led directly to Deming's theory of management. Deming saw that these ideas could be applied not only to manufacturing processes, but also to the processes by which enterprises are led and managed. This key insight made possible his enormous influence on the economics of the industrialized world after 1950.[9] In 1936, he studied under Sir Ronald Aylmer Fisher and Jerzy Neyman at University College, London, England.

Deming edited a series of lectures delivered by Shewhart at USDA, Statistical Method from the Viewpoint of Quality Control, into a book published in 1939. One reason he learned so much from Shewhart, Deming remarked in a videotaped interview, was that, while brilliant, Shewhart had an "uncanny ability to make things difficult." Deming thus spent a great deal of time both copying Shewhart's ideas and devising ways to present them with his own twist.[10] Deming developed the sampling techniques that were used for the first time during the 1940 U.S. Census, formulating the Deming-Stephan algorithm for iterative proportional fitting in the process.[11] During World War II, Deming was a member of the five-man Emergency Technical Committee. He worked with H.F. Dodge, A.G. Ashcroft, Leslie E. Simon, R.E. Wareham, and John Gaillard in the compilation of the American War Standards (American Standards Association Z1.1-3 published in 1942)[12] and taught statistical process control (SPC) techniques to workers

engaged in wartime production. Statistical methods were widely applied during World War II, but faded into disuse a few years later in the face of huge overseas demand for American mass-produced products. Work in Japan In 1947, Deming was involved in early planning for the 1951 Japanese Census. The Allied powers were occupying Japan, and he was asked by the United States Department of the Army to assist with the census. While in Japan, Deming's expertise in quality control techniques, combined with his involvement in Japanese society, led to his receiving an invitation from the Japanese Union of Scientists and Engineers (JUSE).[6] JUSE members had studied Shewhart's techniques, and as part of Japan's reconstruction efforts, they sought an expert to teach statistical control. From JuneAugust 1950, Deming trained hundreds of engineers, managers, and scholars in statistical process control (SPC)

and concepts of quality. He also conducted at least one session for top management.(The list includes top Japanese industrialists the likes of Akio Morita, the cofounder of Sony Corp)[13] Deming's message to Japan's chief executives: improving quality will reduce expenses while increasing productivity and market share.[1] Perhaps the best known of these management lectures was delivered at the Mt. Hakone Conference Center in August 1950. A number of Japanese manufacturers applied his techniques widely and experienced heretofore unheard-of levels of quality and productivity. The improved quality combined with the lowered cost created new international demand for Japanese products. Deming declined to receive royalties from the transcripts of his 1950 lectures, so JUSE's board of directors established the Deming Prize (December 1950) to repay him for his friendship and kindness.[13] Within Japan, the Deming Prize continues to exert considerable influence on the

disciplines of quality control and quality management.[14] Honors In 1960, the Prime Minister of Japan (Nobusuke Kishi), acting on behalf of Emperor Hirohito, awarded Deming Japans Order of the Sacred Treasure, Second Class.[15] The citation on the medal recognizes Deming's contributions to Japans industrial rebirth and its worldwide success. The first section of the meritorious service record describes his work in Japan:[13]

1947, Rice Statistics Mission member 1950, assistant to the Supreme Commander of the Allied Powers instructor in sample survey methods in government statistics

The second half of the record lists his service to private enterprise through the introduction of epochal ideas, such as quality control and market survey techniques.

Among his many honors, an exhibit memorializing Deming's contributions and his famous Red Bead Experiment is on display outside the board room of the American Society for Quality.[16] Later work in the U.S. David Salsburg wrote: "He was known for his kindness to and consideration for those he worked with, for his robust, if very subtle, humor, and for his interest in music. He sang in a choir, played drums and flute, and published several original pieces of sacred music."[17][18] Later, from his home in Washington, D.C., Deming continued running his own consultancy business in the United States, largely unknown and unrecognized in his country of origin and work. In 1980, he was featured prominently in an NBC documentary titled If Japan can... Why can't we? about the increasing industrial competition the United States was facing from Japan. As a result of the broadcast, demand for his services

increased dramatically, and Deming continued consulting for industry throughout the world until his death at the age of 93. Ford Motor Company was one of the first American corporations to seek help from Deming. In 1981, Ford's sales were falling. Between 1979 and 1982, Ford had incurred $3 billion in losses. Ford's newly appointed Division Quality Manager, John A. Manoogian, was charged with recruiting Deming to help jump-start a quality movement at Ford.[19] Deming questioned the company's culture and the way its managers operated. To Ford's surprise, Deming talked not about quality but about management. He told Ford that management actions were responsible for 85% of all problems in developing better cars. In 1986, Ford came out with a profitable line of cars, the Taurus-Sable line. In a letter to Autoweek Magazine, Donald Petersen, then Ford Chairman, said, "We are moving toward building a quality culture at Ford and the many changes that have been taking place here have their roots directly

in Deming's teachings."[20] By 1986, Ford had become the most profitable American auto company. For the first time since the 1920s, its earnings had exceeded those of arch rival General Motors (GM). Ford had come to lead the American automobile industry in improvements. Ford's following years' earnings confirmed that its success was not a fluke, for its earnings continued to exceed GM and Chrysler's. In 1990, Marshall Industries (NYSE:MI, 1984 1999) CEO, Robert Rodin, trained with the then 90-year-old Deming and his colleague Nida Backaitus. Marshall Industries' dramatic transformation and growth from $400 million to $1.8 billion in sales was chronicled in Deming's last book "The New Economics", a Harvard Case Study, and "Free Perfect and Now". In 1982, Deming, as author, had his book published by the MIT Center for Advanced Engineering as Quality, Productivity, and Competitive Position, which was renamed Out of the Crisis in 1986. Deming offers a theory of

management based on his famous 14 Points for Management. Management's failure to plan for the future brings about loss of market, which brings about loss of jobs. Management must be judged not only by the quarterly dividend, but by innovative plans to stay in business, protect investment, ensure future dividends, and provide more jobs through improved products and services. "Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment." Over the course of his career, Deming received dozens of academic awards, including another, honorary, Ph.D. from Oregon State University. In 1987, he was awarded the National Medal of Technology: "For his forceful promotion of statistical methodology, for his contributions to sampling theory, and for his advocacy to corporations and nations of a general management philosophy that has resulted in improved product

quality." In 1988, he received the Distinguished Career in Science award from the National Academy of Sciences.[6] Deming and his staff continued to advise businesses large and small. In 1986, Deming served as a consultant to Vernay Laboratories, a rubber-manufacturing firm in Yellow Springs, Ohio, with less than 500 employees. He held several of week-long seminars for employees and suppliers of the small company where his infamous example "Workers on the Red Beads" spurred several major changes in Vernay's manufacturing processes. Deming joined the Graduate School of Business at Columbia University in 1988. In 1990, during his last year, he founded the W. Edwards Deming for Quality, Productivity, and Competitiveness at Columbia Business School to promote operational excellence in business through the development of research, best practices and strategic planning.

In 1993, Deming published his final book, The

New Economics for Industry, Government, Education, which included the System of

Profound Knowledge and the 14 Points for Management. It also contained educational concepts involving group-based teaching without grades, as well as management without individual merit or performance reviews. In December 1993, W. Edwards Deming died in his sleep at the age of 93 in his Washington home at about 3 a.m. due to "natural causes". His family was by his side when he died.[21] Deming philosophy synopsis The philosophy of W. Edwards Deming has been summarized as follows: "Dr. W. Edwards Deming taught that by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while increasing customer loyalty).

The key is to practice continual improvement and think of manufacturing as a system, not as bits and pieces."[22] In the 1970s, Deming's philosophy was summarized by some of his Japanese proponents with the following 'a'-versus-'b' comparison: (a) When people and organizations focus primarily on quality, defined by the following ratio, quality tends to increase and costs fall over time. (b) However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time. The Deming System of Profound Knowledge "The prevailing style of management must undergo transformation. A system cannot understand itself. The transformation requires a view from outside. The aim of this chapter is to provide an outside viewa lensthat I call a

system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in. "The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people. "Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will:

Set an example; Be a good listener, but will not compromise; Continually teach other people; and Help people to pull away from their current practices and beliefs and move into the new

philosophy without a feeling of guilt about the past." Deming advocated that all managers need to have what he called a System of Profound Knowledge, consisting of four parts: 1. Appreciation of a system: understanding the overall processes involving suppliers, producers, and customers (or recipients) of goods and services (explained below); 2. Knowledge of variation: the range and causes of variation in quality, and use of statistical sampling in measurements; 3. Theory of knowledge: the concepts explaining knowledge and the limits of what can be known. 4. Knowledge of psychology: concepts of human nature. Deming explained, "One need not be eminent in any part nor in all four parts in order to understand it and to apply it. The 14 points for management in industry, education, and

government follow naturally as application of this outside knowledge, for transformation from the present style of Western management to one of optimization." "The various segments of the system of profound knowledge proposed here cannot be separated. They interact with each other. Thus, knowledge of psychology is incomplete without knowledge of variation. "A manager of people needs to understand that all people are different. This is not ranking people. He needs to understand that the performance of anyone is governed largely by the system that he works in, the responsibility of management. A psychologist that possesses even a crude understanding of variation as will be learned in the experiment with the Red Beads (Ch. 7) could no longer participate in refinement of a plan for ranking people."[23] The Appreciation of a system involves understanding how interactions (i.e., feedback)

between the elements of a system can result in internal restrictions that force the system to behave as a single organism that automatically seeks a steady state. It is this steady state that determines the output of the system rather than the individual elements. Thus it is the structure of the organization rather than the employees, alone, which holds the key to improving the quality of output. The Knowledge of variation involves understanding that everything measured consists of both "normal" variation due to the flexibility of the system and of "special causes" that create defects. Quality involves recognizing the difference to eliminate "special causes" while controlling normal variation. Deming taught that making changes in response to "normal" variation would only make the system perform worse. Understanding variation includes the mathematical certainty that variation will normally occur within six standard deviations of the mean.

The System of Profound Knowledge is the basis for application of Deming's famous 14 Points for Management, described below. Key principles Deming offered fourteen key principles to managers for transforming business effectiveness. The points were first presented in his book Out of the Crisis. (p. 23-24)[24] Although Deming does not use the term in his book, it is credited with launching the Total Quality Management movement.[25] 1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive, stay in business and to provide jobs. 2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.

3. Cease dependence on inspection to achieve quality. Eliminate the need for massive inspection by building quality into the product in the first place. 4. End the practice of awarding business on the basis of a price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust. 5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. 6. Institute training on the job. 7. Institute leadership (see Point 12 and Ch. 8 of "Out of the Crisis"). The aim of supervision should be to help people and machines and gadgets do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers. 8. Drive out fear, so that everyone may work effectively for the company. (See Ch. 3 of "Out of the Crisis")

9. Break down barriers between departments. People in research, design, sales, and production must work as a team, in order to foresee problems of production and usage that may be encountered with the product or service. 10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force. 11. a. Eliminate work standards (quotas) on the factory floor. Substitute with leadership. b. Eliminate management by objective. Eliminate management by numbers and numerical goals. Instead substitute with leadership. 12. a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be

changed from sheer numbers to quality. b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective (See Ch. 3 of "Out of the Crisis"). 13. Institute a vigorous program of education and self-improvement. 14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job. "Massive training is required to instill the courage to break with tradition. Every activity and every job is a part of the process."[26] Seven Deadly Diseases The "Seven Deadly Diseases" include: 1. Lack of constancy of purpose 2. Emphasis on short-term profits 3. Evaluation by performance, merit rating, or annual review of performance

4. Mobility of management 5. Running a company on visible figures alone 6. Excessive medical costs 7. Excessive costs of warranty, fueled by lawyers who work for contingency fees "A Lesser Category of Obstacles" includes 1. Neglecting long-range planning 2. Relying on technology to solve problems 3. Seeking examples to follow rather than developing solutions 4. Excuses, such as "our problems are different" 5. Obsolescence in school that management skill can be taught in classes[27] 6. Reliance on quality control departments rather than management, supervisors, managers of purchasing, and production workers 7. Placing blame on workforces who are only responsible for 15% of mistakes where the system designed by management is responsible for 85% of the unintended consequences

8. Relying on quality inspection rather than improving product quality Deming's advocacy of the Plan-Do-Check-Act cycle, his 14 Points, and Seven Deadly Diseases have had tremendous influence outside of manufacturing and have been applied in other arenas, such as in the relatively new field of sales process engineering.[28] Quotations and concepts In his later years, Deming taught many concepts, which he emphasized by key sayings or quotations that he repeated. A number of these quotes have been recorded.[29] Some of the concepts might seem to be oxymorons or contradictory to each other; however, the student is given each concept to ponder its meaning in the whole system, over time.

"There is no substitute for knowledge." This

statement emphasizes the need to know more, about everything in the system. It is considered as a contrast to the old

statement, "There is no substitute for hard work" by Thomas Alva Edison (18471931). Instead, a small amount of knowledge could save many hours of hard work.

""In God we trust; all others must bring data." (Trevor Hastie, Robert Tibshirani, and

Jerome Friedman, co-authors of The Elements of Statistical Learning in their Preface to the Second Edition have a footnote which reads: "On the Web, this quote has been widely attributed to both Deming and Robert W. Hayden; however Professor Hayden told us that he can claim no credit for this quote, and ironically we could find no 'data' confirming Deming actually said this.") - The quote in The Elements of Statistical Learning actually reads "In God we trust, all others bring data."[30]]

"The most important things cannot be measured." The issues that are most

important, long term, cannot be measured in advance. However, they might be among the

factors that an organization is measuring, just not understood as most important at the time.

"The most important things are unknown or unknowable." The factors that have the

greatest impact, long term, can be quite surprising. Analogous to an earthquake that disrupts service, other "earth-shattering" events that most affect an organization will be unknown or unknowable, in advance. Other examples of important things would be: a drastic change in technology, or new investment capital.

"Experience by itself teaches nothing."[29]

This statement emphasizes the need to interpret and apply information against a theory or framework of concepts that is the basis for knowledge about a system. It is considered as a contrast to the old statement, "Experience is the best teacher" (Deming disagreed with that). To Deming, knowledge is best taught by a master who

explains the overall system through which experience is judged; experience, without understanding the underlying system, is just raw data that can be misinterpreted against a flawed theory of reality. Deming's view of experience is related to Shewhart's concept, "Data has no meaning apart from its context".

"By what method?... Only the method counts."[29] When information is obtained, or

data is measured, the method, or process used to gather information, greatly affects the results. For example, the "Hawthorne effect" showed that people just asking frequently for opinions seemed to affect the resulting outcome, since some people felt better just being asked for their opinion. Deming warned that basing judgments on customer complaints alone ignored the general population of other opinions, which should be judged together, such as in a statistical sample of the whole, not just isolated complaints: survey the entire group about

their likes and dislikes (see Sampling (statistics)). The extreme complaints might not represent the attitudes of the whole group. Similarly, measuring or counting data depends on the instrument or method used. Changing the method changes the results. Aim and method are essential. An aim without a method is useless. A method without an aim is dangerous. It leads to action without direction and without constancy of purpose. Deming used an illustration of washing a table to teach a lesson about the relationship between purpose and method. If you tell someone to wash a table, but not the reason for washing it, they cannot do the job properly (will the table be used for chopping food or potting plants?). That does not mean just giving the explanation without an operational definition. The information about why the table needs to be washed, and what is to be done with it, makes it possible to do the job intelligently.

"You can expect what you inspect." Deming

emphasized the importance of measuring and testing to predict typical results. If a phase consists of inputs + process + outputs, all 3 are inspected to some extent. Problems with inputs are a major source of trouble, but the process using those inputs can also have problems. By inspecting the inputs and the process more, the outputs can be better predicted, and inspected less. Rather than use mass inspection of every output product, the output can be statistically sampled in a cause-effect relationship through the process.

"Special Causes and Common Causes": Deming

Acceptable Defects: Rather than waste

efforts on zero-defect goals, Deming stressed the importance of establishing a level of variation, or anomalies, acceptable to the recipient (or customer) in the next phase of a process. Often, some defects are quite acceptable, and efforts to remove all defects would be an excessive waste of time and money.

The Deming Cycle (or Shewhart Cycle): As a

repetitive process to determine the next action, the Deming Cycle describes a simple method to test information before making a major decision. The 4 steps in the Deming Cycle are: Plan-Do-Check-Act (PDCA), also known as Plan-Do-Study-Act or PDSA. Deming called the cycle the Shewhart Cycle, after Walter A. Shewhart. The cycle can be used in various ways, such as running an experiment: PLAN (design) the experiment; DO the experiment by performing the steps; CHECK

the results by testing information; and ACT on the decisions based on those results.

Semi-Automated, not Fully Automated:

Deming lamented the problem of automation gone awry ("robots painting robots"): instead, he advocated human-assisted semiautomation, which allows people to change the semi-automated or computer-assisted processes, based on new knowledge. Compare to Japanese term 'autonomation' (which can be loosely translated as "automation with a human touch").

"The problem is at the top; management is the problem." [23] Dr. Deming emphasized that

the top-level management had to change to produce significant differences, in a longterm, continuous manner. As a consultant, Deming would offer advice to top-level managers, if asked repeatedly, in a continuous manner.

"What is a system? A system is a network of interdependent components that work together to try to accomplish the aim of the system. A system must have an aim. Without an aim, there is no system. The aim of the system must be clear to everyone in the system. The aim must include plans for the future. The aim is a value judgment. (We are of course talking here about a man-made system.)" [23] "A system must be managed. It will not manage itself. Left to themselves in the Western world, components become selfish, competitive. We can not afford the destructive effect of competition." [23] "To successfully respond to the myriad of changes that shake the world, transformation into a new style of management is required. The route to take is what I call profound knowledgeknowledge for leadership of transformation." [23]

"The worker is not the problem. The problem is at the top! Management!" [31] Managements

job. It is managements job to direct the efforts of all components toward the aim of the system. The first step is clarification: everyone in the organization must understand the aim of the system, and how to direct his efforts toward it. Everyone must understand the damage and loss to the whole organization from a team that seeks to become a selfish, independent, profit centre." [23]

"They realized that the gains that you get by statistical methods are gains that you get without new machinery, without new people. Anybody can produce quality if he lowers his production rate. That is not what I am talking about. Statistical thinking and statistical methods are to Japanese production workers, foremen, and all the way through the company, a second language. In statistical control, you have a reproducible product hour after hour, day after day. And see how

comforting that is to management, they now know what they can produce, they know what their costs are going to be." [32]

"I think that people here expect miracles. American management thinks that they can just copy from Japanbut they don't know what to copy!" [32] "What is the variation trying to tell us about a process, about the people in the process?"
[23]

Dr. Shewhart created the basis for the control chart and the concept of a state of statistical control by carefully designed experiments. While Shewhart drew from pure mathematical statistical theories, he understood that data from physical processes never produce a "normal distribution curve" (a Gaussian distribution, also commonly referred to as a "bell curve"). He discovered that observed variation in manufacturing data did not always behave the same way as data in nature (Brownian motion of particles). Shewhart concluded that while every process

displays variation, some processes display controlled variation that is natural to the process, while others display uncontrolled variation that is not present in the process causal system at all times.[33] Deming renamed these distinctions "common cause" for chance causes and "special cause" for assignable causes. He did this so the focus would be placed on those responsible for doing something about the variation, rather than the source of the variation. It is top managements responsibility to address "common cause" variation, and therefore it is managements responsibility to make improvements to the whole system. Because "special cause" variation is assignable, workers, supervisors or middle managers that have direct knowledge of the assignable cause best address this type of specific intervention.[9]

(Deming on Quality Circles) "That's all window

dressing. That's not fundamental. That's not

getting at change and the transformation that must take place. Sure we have to solve problems. Certainly stamp out the fire. Stamp out the fire and get nowhere. Stamp out the fires puts us back to where we were in the first place. Taking action on the basis of results without theory of knowledge, without theory of variation, without knowledge about a system. Anything goes wrong, do something about it, overreacting; acting without knowledge, the effect is to make things worse. With the best of intentions and best efforts, managing by results is, in effect, exactly the same, as Myron Tribus put it, while driving your automobile, keeping your eye on the rear view mirror, what would happen? And that's what management by results is, keeping your eye on results." [2]

"Knowledge is theory. We should be thankful if action of management is based on theory. Knowledge has temporal spread. Information is not knowledge. The world is drowning in

information but is slow in acquisition of knowledge. There is no substitute for knowledge." [23] This statement emphasizes
the need for theory of knowledge.

"Uncertainty makes research predictable, but you still need proof to satisfy everyone else."
[23]

Deming was referencing the sometimes paradoxical aspects of research.

"The most important figures that one needs for management are unknown or unknowable (Lloyd S. Nelson, director of statistical methods for the Nashua corporation), but successful management must nevertheless take account of them." [24] Deming realized

that many important things that must be managed couldnt be measured. Both points are important. One, not everything of importance to management can be measured. And two, you must still manage those important things. Spend $20,000 training 10 people in a special skill. What's the benefit? "You'll never know," answered Deming. "You'll

never be able to measure it. Why did you do it? Because you believed it would pay off. Theory." Deming is often incorrectly quoted as saying, "You can't manage what you can't measure." In fact, he stated that one of the seven deadly diseases of management is running a company on visible figures alone.

"joy in work" the phrase, originally "pride in

work" was amended to "joy" by Deming in 1988, after David Kerridge, professor of statistics at Aberdeen, pointed out that "joy" in labour was found twice in the Book of Ecclesiastes.[3