The following is presented without comment, [sic] from the original speech. My thoughts are provided elsewhere.

*Towne Lecture presented at a luncheon meeting of the Management Division in conjunction with the Annual Meeting, New York, N. Y., December 1, 1948, of The American Society of Mechanical Engineers.

The world today is seriously ill. It has passed through one crisis, but no one can be sure that another still more critical does not lie ahead. To speak of world recovery, therefore, may seem somewhat premature, yet certainly recovery is necessary, and it must happen quickly if we are to have the strength to meet successfully whatever may lie ahead.

Amid all of the present-day confusions and conflicting ideologies, one thing that stands out as a constructive force which offers real hope for the future to those who are concerned with the development of a better life. That constructive force is scientific management.

What is Scientific Management?

Before we can understand how scientific management can help in world recovery, we must understand what it is. Scientific management is both a philosophy and a group of techniques, and its complete definition is difficult. It is something which started as an inspired idea and which has acquired meaning over the years without formal definition.

Some time ago, Dan M. Braum of the Department of Agriculture decided that he needed a definition of scientific management in connection with the training work that he was doing. He turned to Dr. Harlow Person and later to Dr. Morris Cooke for assistance, and with the aid of these two pioneers in the scientific-management movement, arrived at the following definition:

Scientific management exists primarily as a concept and mental attitude toward accomplishment. It exercises a basic systematic technique for discovering and establishing objectives, plans, standards, methods, schedules, and controls of an enterprise, all within the laws of each situation and in an environment of high morale; therefore it exemplifies the best use of human and material energy.

The implications of this definition are significant. The only place where scientific management exists is in the heads of the men who use it, and it can only be described in terms of the results of this thought process. Yet there is a basic flexibility to scientific management which is also implied by this definition. It is not necessary to have any particular set of ideologies for it to flourish. It is not even necessary to have any limited type of objective. True, we commonly think of scientific management in connection with greater productivity, and this it will yield under any given set of conditions. But if our goals become of more spiritual in nature - as, for example, greater human satisfactions from life itself as some advanced thinkers abroad are beginning to suggest - scientific management can accomplish this too.

Scientific management is a constructive force which seeks to reach its goals, whatever they are, within the natural laws of the situation. It avoids stubborn butting against stone walls. It requires no rigid adherence to set doctrine or specific ideology. Doctrines and ideologies may change, but the scientific-management approach is unchanging, because it operates on the basis of the situation, whatever they are.

World Recovery Depends on Production

At the present moment, the major requirement for world recovery is production. Particularly in the war-devastated countries, people need desperately the production of material things if they are to enjoy even a passable standard of living. Europe especially is sick, and although progress toward recovery is being made, there is still a long way to go. A few months ago the United Nations Department of Economic Affairs, through the Research and Planning Division of its Economic Commission for Europe, completed an exhaustive study of the European situation and issued a highly informative report under the title of “A Survey of the Economic Situation and PRospects of Europe.” Under the head of “Problems of European Recovery,” the report states that the restoration of equilibrium in Europe’s balance of payments with non-European countries will require a concentrated effort over a period of years. Success will require: (1) the cure of Europe’s present monetary instability, (2) the restoration of intra-European trade to prewar levels, and (3) the further expansion of production along the lines necessary to meet the needs of intra-European trade and overseas exports.

I would like to focus the spotlight on that last condition, the expansion of production. The report, under the head of “The Problem of Production,” after pointing out that supplies of basic materials are improving, goes on to say:

There is also the problem of man power; with man-power reserves practically exhausted in most European countries, further increases in production must in the main come from increased production per man-hour. The productivity of labor has been increasing from the very low levels which prevailed in many countries at the end of the war, but in so far as can be ascertained, taking Europe as a whole, it is still considerably below the prewar level. With the progress of modernization plans and further improvements in stocks of materials, the productivity of labor is likely to increase further, although clearly progress in this direction will tend to slow down once the prewar levels are attained or exceeded.

That last statement is worth of further examination. It appears to set as a goal the restoration of productivity to near prewar levels and then to assume that increases in productivity thereafter will be relatively small. This is a natural conclusion for economists to reach perhaps, but it overlooks the really great potentials for increasing productivity which exist in Europe today.

Europe must be much more productive than it ever was before the war if it is to enjoy the modern standard of living and all that this implies, which this country has demonstrated can be achieved. This is not a European problem alone but is a matter of concern for every one of us here in America. As long as large groups of people in Europe are forced to exist at the subsistence level, so that they have no particular stake in the established economy of their countries, then we can expect unrest, a willingness to go off on unsound economic tangents, and even a mental readiness for war. Until the “have not” people, and the “have not” nations join the ranks of the “have” people and nations, we can expect continuing threats to the peace of the world.

American Productivity Can Be Increased

Is it possible for the “have not’s” to become “have’s”? They can if productivity can be increased. And can productivity be increased? Of course it can. Even here in the United States of America where we talk proudly about the “miracle of production” we accomplished during the war, we are improving our methods and increasing our productivity constantly. Even in productive America, we have yet realized only a fraction of the benefits which scientific management can bring. If, for example, every factory in our country could be managed as well during the next month as the best plant is now managed, we would see an expansion of production which would make the accomplishments of the past seem small indeed by comparison.

There are so many ways in which production increased can be obtained that progress can be unending under proper management. New machinery for the further mechanization of industry may be difficult for Europe to finance at the moment, and the newer kinds of raw materials may be unavailable. But experience in this country has shown that production increases of 20, 50, 100 percent, or more can be obtained by improving methods in ways which require for the most part only the systematic application of common sense. Greater yields of first-quality products from a given quantity of material can be obtained from the introduction of quality control. Production increases to an extent that we ourselves scarcely realize as yet can be obtained by the better handling of human and group relations and the improvement of industrial leadership methods.

These techniques and others will be just as valuable in other countries as they have been here. Most of us who have visited Europe recently and have observed European industry at close range are convinced that the European worker can be just as productive as his American counterpart under the proper conditions. All that is necessary is management, sound scientific management of the type described by our definition.

In Europe, the scientific-management movement is really only just now beginning to get under way. True there have been advocates of scientific management and societies devoted to the study and application of scientific management in Europe for many years. However, it required the destructions of war to bring home the fact that production is the only real basis for material prosperity.With this realization came a real enthusiasm for scientific management which promises the greater production which is so badly needed. A steadily increasing stream of publications dealing with scientific-management procedures and techniques is beginning to reach us from overseas, tangible evidence of the new vitality of the movement abroad. CIOS, the International Committee for Scientific Management, strongly support by American management groups including our own ASME, is steadily gaining strength and stature and is becoming a constructive force in the economic and industrial life of all of its member nations, both inside and outside of Europe.

Portfolio of World Management Problems

And this is as it should be for more production is not a European problem alone but is a requirement of the rest of the world too. This was clearly demonstrated about three weeks ago when the National MAnagement Council of the United States of America issued to its members a semiconfidential portfolio of top-management International Exchange letters. These letters were written at the request of CIOS by top-management men in different countries, and they commented on the major management problems they face in in their countries at the present time. It was most interesting to discover that in practically every letter from every country there was one problem which was repeatedly stressed - the shortage of labor. Everywhere the demand for production exceeds the ability to produce, with lack of man power a major factor. This is even more significant when it is noted that nearly every letter pointed out that production already greatly exceeds prewar levels.

There is a world-wide labor shortage and all inquiries into the reasons for it yield a simple explanation. The answer given is, in effect, “Our people are no longer content with the standard of living they accepted before the war. They want more of everything and our production facilities cannot keep pace.”

With this trend developing in nearly every country in the world, including our own, it appears - if we can avoid the major upheaval of another war - that we are in for the greatest industrial expansion that the world has ever seen. People want more things. The old fears of technological unemployment are disappearing as the result of the assurance given by better social programs throughout the world and the growing acceptance of the fact that to have we must produce. Scientific management faces a real challenge, a challenge which it is ready and only too glad to accept. Scientific management can and will lead the way to the production of more and more goods.

Can we Stand Prosperity?

But human nature is a peculiar thing. Can we stand prosperity? Will we be able to settle down and enjoy the fruits of our productivity? Will we be content with a high standard of peaceful living? Or will we use our increased productive capacity for the faster production of the means of destroying ourselves?

I do not suppose anyone really knows. Some feel that wish security and material prosperity will come the universal desire for peace. Others predict that in addition a great religious revival will be necessary to cause us to cease our warring.

The answer is not yet clear, but I would like to point out that scientific management has within itself the seeds of peace. Scientific management never uses force to accomplish its objectives. It seeks first to understand the laws of the situation. Then it eliminates the obstacles to accomplishment and provides incentives which will cause people to wish to do what is best for the good of the enterprise.

Scientific Management in Government

There is little of this approach in government today, anywhere in the world. I submit that the world today is in the state that it is in because of a lack of application of the principles of sound management to national and international affairs. Countries are managed by their governments, to be sure, but it is still a matter of the management of an enterprise - which in this case is life itself - by a group of human beings. In view of the conditions in which we find ourselves, it is evident that there has been a sad lack of management.

Scientific management recognizes the value of incentives. Then why not incentives for peace, properly defined, established publicized, and sold? If the scientific approach can be carried over into government, then at least there is hope for the future.

Already there are signs that this is taking place. If we look back on the industrial pattern, we find that scientific management did not start usually at the top of the organization. Technicians who believe in scientific management, like the industrial engineers, were given a chance to show what they could do by progressive top managements, and they were the ones who really carried the banner of scientific management forward. With surges ahead alternating with discouraging setbacks, they gradually demonstrated the value of the scientific approach, particularly on manufacturing problems, until its worth began to be recognized, accepted, and adopted by other areas of the business.

So it may be in government. Scientific management is now beginning to get into the more technical levels of government. The Society for the Advancement of Management, for example, has a government-relations division which is encouraging the application of scientific management to government activities. The Army and Navy have finally dropped their 36-year-old restrictions against the use of time study. The same sort of thing is beginning to happen within government circles in other countries.

It is a hopeful development, for from this modest beginning the scientific approach is bound to spread upward through the years and eventually will affect the higher levels. Cold scientific reason will probably never prevail entirely in the management of human affairs, but the scientific approach can recognize the emotional factors which exist within any situation and perhaps can learn to control them within limits.

Challenge to Scientific Management

This then is a challenge for scientific management. Is it too much to expect that if we in industry demonstrate constantly the value of the scientific-management method, the day eventually will come when the managers of countries will follow our example and will eliminate the obstacle of war and provide the incentives which will result in lasting world peace? Here indeed is a cause which deserves the support of every responsible management man who wishes to see his children and his neighbors grow up in a better world. Scientific management can be a vital factor in world affairs. Let us all resolve to give it our utmost support whenever and wherever we can.

If we do this with sincerity, then these United States need not be “The last best hope on earth,” but rather a new hope - a new hope for maturity in governmental and international affairs - a new hope for a better future everywhere in the world.