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Writer's Profile
Anderson Lorimar

Specialised Subjects

Accounting, Finance

I am currently completing my PhD in accounting at a UK University. I already hold a Bachelors degree and an MSc Research Methods both from UK universities. Over the past year I have conducted accounting seminars at a London University.

I am a Chartered Accountant with over 10 years experience working both in a private firm as an auditor and in commercial roles in industry for several companies that are household names in the UK. Recently I have turned my attention to supporting small businesses and social enterprises, helping them to get the most out of their accountants.

My practical experience combined with my academic knowledge gives me a unique perspective that is appreciated at both graduate and undergraduate level.

Critically examine the evidence which may claim that there has been a worldwide long-term decline in Fordist and Taylorist production systems.

Introduction
Manufacturing in industrialised countries has been dominated for a significant part of the twentieth century by what are now known as Fordist and Taylorist production systems. In a response to economic and market changes there was an increase in the use of alternative Japanese production methods accompanied by a fall in manufacturing in the developed world (Womack, Jones and Roos 1990). This led some commentators to claim that there was a worldwide long-term decline in Fordist and Taylorist production systems ushering in an era of ‘Post Fordism’.

A number of theories are competing to explain these changes and predict what will happen next. As a result there is no consensus that the Post Fordism claim is true, however most are agreed that the changes in manufacturing marked the beginning of a new period of capitalism (Kiely 1998).

The first part of this essay is descriptive, outlining the key features of Fordism, Taylorism, Post Fordism and the economic circumstances in which they developed. To answer the question Post Fordism will be examined with respect to its ability to explain current trends, its theoretical basis and its implications for the future.

The essay will show there is little evidence to suggest that there is a long-term decline in Fordist and Taylorist production systems by providing counter evidence to suggest that contrary to Post Fordist claims, Fordist and Taylorist production systems persist and have found new homes outside of the manufacturing sector through the McDonaldization phenomenon (Ritzer 2008).

Much of the theory was developed analysing the motor industry because it has been central in fundamentally changing the way we make things. These principles have been adopted in practically every other industry in the USA and all over the world (Womack et al 1990). The implementation of these production systems have implications that include, and are not limited to, changes in customer relationship management (Womack et al 1990). Hetrick and Boje (1992) cited labour relations by Gorz and consumption, leisure and popular culture by Harvey as other areas that were impacted. This essay acknowledges these and other issues with a clear focus on the discussion of productivity.

Fordism and Taylorism
Fordism and Taylorism are often used synonymously to describe the twentieth century manifestations of the division of labour principle that Adam Smith introduced in his book the Wealth of Nations (Adam Smith Institute 2008).

Taylorism is the term used to describe the scientific management techniques developed by Frederick Taylor in the early twentieth century (Eldritch Press 2004).  Taylor wished to increase productivity in the workplace and suggested that jobs should be divided into their constituent tasks and scientific analysis performed in order to find the “one best way” of performing each task.

An example of this scientific approach was applied by Taylor to shovelling pig iron at the Bethlehem steel factory: Shovellers were paid in proportion to the amount of iron that they shovelled, so a man who shovelled 50 tons in a day would be paid more than a man who shovelled 40 tons. Through observation it was found that a first-class man would do his biggest day’s work with a shovel load of about 21 pounds regardless of the material being shovelled.

To increase efficiency, Taylor provided 8 to 10 different kinds of shovels, each one appropriate to handling a given type of material to enable the men to handle an average load of 21 pounds. He also provided clear instructions on the task prior to execution. The result was to increase the average earnings of each shoveller from $1.15 to $1.88 per day and reduce the number of shovellers from approximately 600 to 140.

This exemplified the increases in productivity of the worker and eliminated any rule of thumb methods used previously.  Individuals were scientifically trained and monitored by management to perform their specific tasks in a specific way (Eldritch Press 2004).

Henry Ford adopted the scientific management techniques of Taylor and implemented them in conjunction with the employment of machinery to assist in the manufacture process. By simplifying component parts, Ford was able to introduce factory assembly lines to bring simple parts to narrowly skilled workers who repeated a specific task. This increased efficiency. Ford’s Model T car was an example of a user-friendly homogenous product that was simply assembled with simple parts. The production system that later bore his name increased productivity and lowered costs, resulting in mass production of low quality but low cost cars. The cost savings of this mass production were passed onto consumers and resulted in mass consumption of motor vehicles (Womack et al 1990).

The economic environment that nurtured Fordism and Taylorism could be described as neo liberal market capitalism, where the market regulated most aspects of the economy with little regulation from the government.  Maximising returns to owners of capital was a key driver in the economy and this often meant that short-term goals dominated decision-making strategies (Dicken 2002). In particular, liberal labour markets were essential for the growth of Fordism and Taylorism. The ability to hire new workers to work in a way dictated by management was central to its success. This had implications for union activity and membership. A complete treatment is beyond the scope of this essay however Ford himself was unable to fully implement his policies and eventually forced to shut down his Trafford Park plant due to ongoing problems with workers in the UK (Womack et al 1990).

Post Fordism
Fordist and Taylorist production methods dominated the car industry into the 1950’s and it was during this period that the Japanese began experimenting with existing Fordist and Taylorist techniques to suit their own socio and economic circumstances.

With smaller domestic markets, scarce capital investment and a wider range of vehicles; Fordist mass production was unsuitable. Like Taylor they were interested in efficiency but they focused on eliminating muda (a term meaning waste) and increasing variety and quality.  New labour laws meant that workers were able to ensure better conditions of employment. The assembly line was reorganised into flexible collaborative teams with less supervision and more responsibility for solving and anticipating problems.

After trial and error the “lean production” system was born, creating a variety of higher quality products. The system was considered lean because the supply chain used only what was necessary avoiding the huge inventories of unused parts or completed vehicle of Fordism. By ensuring that parts or cars were distributed efficiently, this created closer communication and geographical links between suppliers, producers and consumers (Womack et al 1990).

A complete discussion of the economic circumstances surrounding the increased adoption of lean production techniques is beyond the scope of the essay but regarding production two features are noteworthy: the apparent failure of the working class in advanced economies to consume at the rate and quantity required to sustain the Fordist model and the inability of the Fordist model to extract surplus value in the face of declining profits (Williams 2007). The Fordist mantra of “you can have any colour you want as long as it’s black” was becoming less relevant in a changing world where retailers had decided that the customer was always right.

Post Fordism examined
The Post Fordism argument claiming the long term decline of Fordist and Taylorist production systems is firmly focused on two phenomena: the fall in manufacturing in the developed world and the rise of lean production methods. The theoretical basis of these claims is examined below:

Post Fordism celebrated the ascension of lean production techniques borrowing heavily from postmodern theories (Winsor 1992). Figure 1 illustrates Winsor’s (1992) identification of Post Fordism as the third of three distinct stages of economic history.

The Pre Fordist stage refers to a nonexistent manufacturing sector, Fordism represents mass production in manufacturing and the third stage shows a long-term plateau of output as the manufacturing sector switches to using Lean production systems. Post Fordism comfortably explains the decline of Fordist production systems in the developed world and its requirement for a paradigm shift in manufacturing structures. Winsor (1992) clearly states that manufacturing should be fixed not discarded. This illustration of a manufacturing based future differs from the Neo Schumpeterian approach of Post Fordism presented by Amin (1994) where economic history is portrayed as a series of five Kondratievs’s or long term economic waves. The fourth Kondratiev closely resembles Fordism. The fifth Kondratiev is described as an innovation and knowledge intensive service driven “cybernetic macroeconomy”. An explanation comes from Amin (1994) who suggests that within the Post Fordism debate there is a dispute about the meaning of the term Post Fordism.

The Neo Schumpeterian model resembles the post-industrial paradigm and thus differs from the Post Fordism argument. Figure 2 illustrates the Post Industrial Paradigm; where economic history is considered to exist in 4 distinct stages: Pre Industrial, which is an agricultural-based economy with no manufacturing sector. The Industrialising period represents the introduction and growth of a manufacturing sector. The Industrial period is similar to the Fordist period in the Post Fordist Paradigm where mass production of consumer goods takes place. The Post Industrial period is where manufacturing production and exports decline to be replaced by growth in the service sector driven by advances in knowledge and technology.

Winsor’s definition of Post Fordism fails to explain the growth of the service sector in the developed world, representing 66% of GDP of high income (post industrial) countries compared to 35% of GDP of low income (industrialising) countries (World Bank 1995). Winsor (1992) looks to the Post Industrial paradigm to show that the world is in a post-industrial reality and the application of Post Fordist Solutions is hindering the development of the knowledge-based economy. In examining the claims of a worldwide decline in Fordist and Taylorist production systems this explains the decline in developed world manufacturing and the growth in the service industry. It also undermines the Post Fordist argument constructed upon the premise of a manufacturing based economy. This paradigm is also consistent with the persistence of Fordist and Taylorist production systems in the developing world as part of an international division of labour.

UK manufacturing company Dyson moved its manufacturing plant to Malaysia because of lower labour costs (BBC News 2002). The research and design elements of the company remained in the UK creating more service sector jobs to replace the manufacturing jobs lost. This is part of a growing trend: OECD Foreign Direct Investment Outflows rose to a record US$1.7 trillion (OECD Investment News June 2007) while the ratio of exports among OECD countries increased from 9.5% in 1960 to 20.5% in 1990 (Kiely 1998).

Post Fordist production techniques require closer proximity between producers, suppliers and consumers, which is difficult to reconcile to the globalising tendencies of transnational companies. Kiely (1998) suggests that Post Fordism is incompatible with the globalisation thesis.

Post Fordism has difficulty explaining the increase foreign direct investment in developing countries through lean production techniques when the international division of labour can ensure that Taylorist production methods may persist in countries with a competitive advantage in labour intensive production (Rustin cited by Hetrick & Boje (1992), Kiely 1998).

The persistence of Fordist and Taylorist production methods is not confined to developing countries through foreign direct investment. McDonaldization is a term coined by Ritzer (2008) to describe “the process by which the principles of the fast food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world” (Ritzer 2008 p1).  The four dimensions of McDonaldization are Efficiency, Calculability, Predictability and Control; these are applied to both the product and the worker. Ritzer identifies Fordism and Taylorism as the precursors of McDonaldization and suggests that standardised routines, homogeneous products and workers, deskilling and efforts to increase productivity are characteristics of all three. McDonalds, a transnational company with globalising tendencies operates more than 31,000 restaurants in 119 countries employing more than 1.5 million people (McDonalds 2007) and coexists with Post Industrialisation by applying these methods to both the manufacturing and service sectors where simple non creative scripted tasks are performed. (Ritzer 2008).  Aglietta cited by Amin (1994) discusses the application of Fordist Methods in the service sector to raise productivity. Contrary to a Post Fordist claim of a decline in Fordist and Taylorist production systems, McDonaldization suggests that Taylorism has moved “from shovelling pig iron to shovelling chips” (Williams 2007) in the fast food sector and the principles have been adopted in increasing sectors throughout the world.

Figure 3 outlines some of the similarities between the Accountancy profession and McDonalds. The writer is familiar with the accounting profession and has chosen it to illustrate how Fordist and Taylorist methods have found homes within the growing service sector. The Accountancy profession has benefited from the growth in the service sector that has accompanied the demise of Fordism in the manufacturing sector (Hanlon 1996).

Company McDonalds Audit Firm
Task Flipping Burgers Checking Bank statement to Account Records
Guidance McDonalds Bible Audit Manual
Timekeeping Clocking in Card Approved Timesheets
Rigid Hierarchy Yes Yes
Scientific Management Yes Yes
Division of Labour Yes Yes
Enforced Dress Code McDonalds Uniform Suit
Emphasis on selling additional products/services “Would you like fries with that?” “We can provide additional services”

Figure 3 Comparison of McDonalds/Audit Practice (Source (McDonaldization of Society 2008, Personal Experience ))

Like the fast food sector the industry is dominated by a small number of transnational companies (known as the Big 4) with established neo Weberian bureaucracies and rigid hierarchies enforcing sophisticated forms of control to standardise behaviour including and not limited to the use of a professional language (Anderson –Gough, Grey and Robson 1998), the construction of a professional identity (Kirkham & Loft 1993) and ongoing performance surveillance. An example is the use of weekly task summaries requiring approval by a supervising member of staff.

McDonaldization succeeds where Post Fordism fails by reflecting reality that is consistent with the Globalisation and Post Industrial phenomenon in the world accommodating the growth of Lean Production methods where applicable.

Post Fordism as Winsor (1992) portrayed it explains the decline in Fordism and Taylorism in the developed world and the rise in lean production techniques that accompanied it. Its use beyond that is considered by many commentators to be limited: Hetrick and Boje (1992) say that “engaging in anything remotely resembling a theoretical or conceptual closure should be avoided” (1992 p50). Kiely (1998) argues that with no clear analysis it is prescriptive instead of an analytical theory. Amin (1994) rejects the literature as a universally accepted theory of transition considering it to be a debate.

The Post Fordist debate forms part of the explanation but not all of it. Rustin is cited Hetrick and Boje (1992) as saying “Post Fordism is better seen as a one ideal typical model or strategy of production and regulation co-present with others in a complex historical ensemble” (p61)

Summary
Post Fordism is useful as one of many models within an ensemble of theories used to explain the globalised post-industrial landscape of the twenty first century. The inability of Post Fordism to accommodate the persistence of Fordist and Taylorist practices exemplified in McDonaldization limits its use as transition theory.

The recent financial crisis exemplifies how the short-term strategies designed to maximise returns to capital can have adverse affects on long term growth. The Post Fordist argument is important because of its call to action in changing the way that work is done.  Advances in information and communication technology provide more scope for this flexibility. However as long as an economy is organised within a free market system there will always be incentives for increased efficiency and productivity. Fordist and Taylorist production methods will have a role. Perhaps this period should be called Neo Fordism (Amin 1994) to stress the strong continuity with Fordism and to reflect the ability of Fordism and Taylorism to coexist with other production systems. McDonaldization demonstrates the enduring qualities of Fordism and Taylorism to traverse sectors and economies.

References
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Anderson- Gough, F., Grey, C., Robson, K (1998) “Work hard, play hard: An analysis of Organisational cliché in two accountancy practices”. Organisation Articles. Vol 5 (4) p565-592.

Amin, A. (1994). “Post-Fordism: Models, fantasies and phantoms of transition” in A. Amin (Ed.), Post-Fordism: A reader (p. 1-40). Oxford, UK: Basil Blackwell.

BBC News (2002) “Dyson plant shuts up shop” 26 September [online] Available from http://news.bbc.co.uk/1/hi/england/2282809.stm [Accessed 04/01/10]

Dicken, P., (2002) Global Shift: Reshaping the Global Economic Map in the 21st Century: 4th Edition, Sage

Eldritch Press (2004) The Principles of Scientific Management, [online] Available from: http://www.eldritchpress.org/fwt/taylor.html [Accessed 04/01/10]

Hanlon, G (1996) “Casino Capitalism and the rise of the commercialised service class- An examination of the accountant”. Critical Perspectives on Accounting. (7), p339-363.

Hetrick, W. P., Boje, D. M., (1992) “Organisation and the Body: Post Fordist dimensions” Journal of Organisational Change .Vol 5 (1) p48-57.

Financial Reporting Council (2009) “Key facts and trends in the Accountancy Profession” 19 June [online] Available from: http://www.frc.org.uk/images/uploaded/documents/
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Kiely, R., (1998) “Globalization, Post Fordism and the Contemporary Context of development”. International Sociology. Vol 13 (95) p95-115.

Kirkham, L., &Loft L (1993) Gender and the construction of the professional accountant, Accounting, Organisations and Society. Vol18 (6) p507-558

McDonalds (2007) “Frequently asked questions” [online] March Available from: http://www.mcdonalds.ca/en/aboutus/faq.aspx [Accessed 04/01/10]

OECD (2008)” Investment News Report” [online] Available from: http://www.oecd.org/dataoecd/18/28/40887916.pdf [Accessed 04/01/10]

Ritzer, G., (2008) The McDonaldization of Society. 5th edition Pine Forge Press

Williams, C.C., (2007) Rethinking the future of work: directions and visions. Basingstoke: Palgrave-Macmillan.

Winsor, R. D., (1992) “Talking the Post Fordist talk but walking the Post Industrial walk” Journal of Organisational Change Vol 5 (2) p61-69

Womack, J. P., Jones, J.T., Roos, D. (1990) The Machine That Changed the World. New York. Maxwell Macmillan International

World Bank, (1995) “Growth of the Service Sector” [online] Available from: http://www.worldbank.org/depweb/beyond/beyondco/beg_09.pdf [Accessed 04/01/10]