Negotiation

Business owners’ ability to negotiate skillfully is important because typically, whether they realize it or not, they spend hours every week negotiating with subordinates, suppliers, lenders, significant others, children, parents, in-laws, car dealers, and others. Deciding how much to pay a new office manager or where to go to lunch with the client involves negotiation. The office manager may choose to accept less many if 100 percent of health benefits are paid, while a client may agree to go for Mexican food if Chinese food will be the choice on the next occasion. Even though all business owners are experienced negotiators, they may not be skilled negotiators. Being a skillful negotiator requires patience, attentiveness, flexibility, and awareness of personal negotiation style, issues, and details of the case, as well as the goals and objectives of the other party.

Negotiation can be described as nonviolent communication between two or more parties who may have conflicting and common interest in an attempt to reach an agreement that meets the goals of one or both parties. In simple terms, negotiation is a process for getting something you want. Gary Karras, author of Negotiate to Close, once said, “We don’t get what we want in this life, we get what we negotiate.”

Common Misconceptions about Negotiation
Many people are afraid to negotiate because of all the stereotypes associated with negotiation. Although business owners spend up to half their time at work negotiating, many still uncomfortable with the process. Some fear that they may come across to the other party as impolite, pushy, unfair, or even cheap.

One common misconception about negotiation is that good negotiators use tactics similar to the stereotypical deceitful, conniving used car salesman. Being a good negotiator does not mean you have to resort to being a slick, smooth talker.

Contrary to popular belief, negotiating should not be compared to a game or a war in which both parties enter the process with the goal of winning and crushing the other party’s spirit. The end result of war or a game is that one party comes out as the clear winner and the other as absolute loser. Upon completion of a successful negotiation, in contrast, both parties should feel that they have won something.

Another reason business owners feel uncomfortable negotiating is because they feel they have to make trade-offs between getting along with the other side and getting what they want. It is not uncommon in business owners to feel that they have to either give in to the other side’s demands or play hardball in order to avoid conflict, damaging their future relationship, or being taken advantage of by the other party.

Many people feel more relaxed when they find out that they will be negotiating with a woman because they assume that women are not as aggressive as their male counterparts and, therefore, cannot be as effective as negotiators. This is another common misconception. While women tend to be more concerned with preserving relationships and men with arriving at an agreement as quickly as possible, this is not always the case. Some men are patient and are more interesting in achieving a deal that meets the needs of all parties while some women prefer to enter the negotiation with a competitive drive to win. Whether you are negotiating with women or men, you should always do your homework. Learn as much as you can about the members of the other team, develop a relationship with them and, if necessary, alter your negotiation style so that it resonates with the other team’s personality.

Primary Goal of Negotiation
Negotiation is like neither a game nor a war. It is about cooperation and signing an agreement that makes both parties feel that they have been successful. The primary goal of effective negotiation should be to achieve a deal that both parties can live with and that accomplishes your goals without making the other party walk away from the deal or harming a valuable relationship. Basically, the whole point of negotiation with someone is to get something better than what you would get without negotiating.

Negotiation Style
There two main types of negotiation styles, hard and soft. Hard bargaining is also referred to as positional, aggressive, contending, or competitive bargaining; and soft bargaining is synonymous with relational or cooperative bargaining.

Prenegotiation Homework
To be a successful negotiator, it is imperative that you do your homework. Fisher and Ury suggest that you spend about half the time you spend negotiating on preparing for the negotiation.

 Ideal meeting location
 Evaluate your negotiation style
 Establish your goals and objectives
 Research the other team’s member and personalities
 Make a list of assumptions
 Gather facts and conduct research
 Focus on the other side’s interest rather than stated positions

Consider this example:

Boss: Based on our conversations over the past few days, I would like to extend an offer to you for $ 44,000 a year plus 10 days of vacation time and 5 sick days
Employee: Well, I’m going to be honest and say that I am a bit surprised. I was expecting the offer to be closer to the $ 50,000 salary range
Boss: Why were you expecting an offer of approximately $ 50,000?
Employee: Well, since I have been freelancing for the past few years, I have grown accustomed to having more time to go on vacations. I work hard for most of the year but I am also able to take a few weeks at a time to travel abroad. I will be unable to do much traveling if I have only two weeks of vacation time a year. So if I won’t be able to travel as much, I should at least make more money
Boss: I see. How about this? I’ll throw in an extra week vacation for the next three years so you’ll have 15 days of vacation time, you will have 5 days of sick time. If you do not get sick during the year, you can use them as vacation days during the last quarter of the year. So, you could have up to 20 vacation days your first three years. I’ll increase that to 20 vacation days plus 5 sick days. And, once a quarter, you can work 10 hours either Monday through Thursday or Tuesday through Friday and take a long weekend off. I think that sounds fair. What do you think?
Employee: I think I’ll accept the offer-$ 44,000 sounds good as long as I have enough vacation time to travel.
Boss: Great, welcome aboard then!

 Use objective standards

Consider this example:

Doctor: I am pleased to tell you that I met with everyone you interviewed with and would like to extend you an offer of $ 45,000 per year as your salary.
Employee: How did you arrive at that amount exactly?
Doctor: Well, we think it is a very fair salary. According to our human resources department, the average salary paid to pediatric nurse with your level of experience in this city is $ 43,789. not only do we pay slightly more than average, but we also offer additional benefits. While most doctors offer their nurses two weeks of vacation, we would give you three. You would also be able to begin contributing to your 401(k) plan immediately rather than waiting for six months as in many other offices. Additionally, the vast majority of our nurses have been with us more than 10 years. The average tenure of our office for nurses is 14.5 years. And every year for the past 5 years, we have been working with a market research firm to conduct an employee satisfaction survey. According to last years results, 92 percent of our employees are either satisfied or very satisfied with their jobs, 94 percent with the benefits, and 90 percent with their bosses. We really value our employee here and I think they recognize that.
Employee: Sounds like once nurses are hired at your office, they don’t want to work anywhere else.
Doctor: Exactly. We have one of the high retention rates in the city for nurses.
Employee: Well, now that you explained how happy your employees are, I think I would like to work here as well.
Doctor: I’m glad to hear it. I’ll notify the human resources department and have them send your paperwork by the end of the day. You should receive it by the end of the week.

 Generate options that meet interests of both parties

Consider this example:

Employee: Thank you for agreeing to meet with me to discuss my raise for next year.
Boss: I want you to know that I think you are an asset to my company and I appreciate everything you do around here. I think your review went well this year, and I have decided to give you an 8 percent raise for all your hard work.
Employee: I appreciate the 8 percent but I have to say that I was hoping for 15 percent.
Boss: Please tell me why you were hoping for 15 percent
Employee: Well, I really like my job but it’s expensive to keep my kids in day care from 3.30 to 5.30 everyday. I was hoping for a 15 percent raise so that I can keep with the raising costs of day care.
Boss: I’ll tell you what I can do. What about letting you work flexible hours? Maybe you could work from 6.30 A.M to 3.00 P.M. each weekday with a 30-minute lunch. This way you can still work 40 hours a week and be home in time to take care of your kids when they come home from school. Not only would you get to spend more quality time with your kids, but you also wouldn’t have to send them to day care.
Employee: Wow, that’s a great idea. The 8 percent raise sounds fine. Thank you.

 Determine your BATNA

The Negotiation Process

 Put the other side at ease
 Be a good listener
 Alter your negotiation style if necessary
 Separate people from the issue
 Be confident and firm but not demanding
 Be patient
 Ask questions
 Don’t be afraid to walk away

Source: Stralser, Steven. “MBA in a Day”, John Wiley & Sons, Inc., Canada, 2004.

The History of Six Sigma: How Motorola Contributed to Making Six Sigma a Management Philosophy

Victory has a thousand fathers, but defeat is an orphan (John F. Kennedy’s)

Introduction
John F. Kennedy’s words at a press conference after the failed Bay of Pigs invasion remind me of the history of Six Sigma. It reminds me, of course, in the opposite way that prompted JFK’s now famous quote, uttered in 1961 after he blindly trusted the CIA and Defense Department experts claiming that a group of Cuban insurgent could overthrow the communist regime of Fidel Castro without U.S. military involvement. Of course, it wasn’t that simple. JFK balked at providing the military assistance of the United States, which ultimately led to the Cuban invasion and a huge political and military failure.

Instead, Six Sigma is like the first part of JFK’s quote. A study of Six Sigma’s 1980’s beginning shows many people taking credit for its inception. Originally a set of disciplined quality tools to reduce defect rates at Motorola, Six Sigma evolved both within Motorola and later at AlliedSignal and General Electric. This chapter will show that this evolution has resulted in Six Sigma becoming more than a quality toolbox, instead becoming a management philosophy and a cultural phenomenon when properly implemented.

There is the parable of the three blind men and the elephant. Each is asked to identify what they are touching. The first touches the tusk of the elephant and identifies he is touching a spear. The second touches the torso and claim what he is touching is a wall. The third touches the tail and thinks it’s a snake.

This parable parallel Six Sigma. As its popularity has grown, different “experts” have marketed Six Sigma to fit their needs, not necessarily that of their customers. Of course, Six Sigma includes significant amounts of statistical tools. But many see Six Sigma as only statistics. They are wrong. Touch part of the work that constitutes Six Sigma and it will look eerily similar to other quality approaches. Touch another part of Six Sigma and it only vaguely resembles a quality approach at all. This chapter is aimed at enlightening the reader to seeing that as Six Sigma has evolved during the last 20 years, it has been modified, adapted, and augmented into more than a quality toolbox. Our goal with this chapter is to see how three different organizations helped to create and change Six Sigma so that your implementation efforts don’t repeat the mistakes of others.

The Origin of Six Sigma – The Motorola Story
In the mid 1980s Motorola quality was considered poor by any measure. A meeting was held among the top executives with Bob Galvin, their CEO at the helm, discussing a company in chaos. Reject rates among customers were high and internal defect rates were bleeding the electronics company of badly needed profit.

Galvin had responded well to an internal memo written by Bill Smith, an engineer at Motorola. Bob Galvin was a visionary leader who believed strongly in the concept of customer satisfaction and never-ending improvement. Smith’s memo, written in 1985, statistically proved the relationship between product field life and how much rework occurred in the manufacturing process.

Ted Zucconi worked at Motorola in the 1990’s as a business leader in their computer group, as technical director. He went on to Motorola University before retiring in 2002. In a July 2004 interview with Andrea Price and me he recalls that critical meeting among management.

“I don’t know if you heard the famous story about the vote we had at that senior meeting. Everybody was giving their reports and saying how well everything was going and someone stood up and said, ‘No, you are all wrong, our quality sucks.’” Zucconi continues by saying a spirited discussion followed with Galvin finally asking for a vote among the 12 senior managers present. The vote centered on whether they were going to start a formal quality initiative. The vote was 11-1 against with the one positive vote generated by the only one that counted, Galvin himself. Six Sigma as a formal initiative was ready to be conceived.

The initial formula used by Motorola was MAIC, which stood for measure, analyze, improve, and control. An underlying assumption was that a project was already well defined and chartered, the right people had been assigned, and that proper sponsorship was in place to ensure success of the project. Sadly, that was not always the case.

Nonetheless, Motorola reduced manufacturing costs from the inception of Six Sigma in 1987 through 1994 by 1.5 billion dollars. Through the summer of 2004, Motorola claimed cost savings of 15 billion dollars. This is in keeping with experts who claim that an organization can save anywhere from 1.2 percent to 4.5 percent of the organization’s revenue.

Much discussion has centered on the true originator of Six Sigma. Mikel Harry must be given major credit for packaging and commercializing Six Sigma as a vibrant quality-improvement methodology. To Harry’s credit, he claims it is Bill Smith who should be given the moniker of Six Sigma founder. But it was Harry who formulated much of the details of Six Sigma methodology. Harry first published The Nature of Six Sigma in 1986. it was also Harry that went on to publish The Strategic Vision for Accelerating Six Sigma within Motorola and was later appointed the first head of Motorola Six Sigma Research Institute.

While much discussion centers around who created Six Sigma, little has been said about the deployment of Six Sigma, first within Motorola, and then later at AlliedSignal, and then General Electric.

Much credit should be given to Motorola for their efforts in pioneering Six Sigma. However, the approach Motorola took toward implementing Six Sigma was virtually all at the tactical level. This means that Six Sigma was primarily used as a defect reduction tool, not the ultimate management philosophy championed by AlliedSignal and GE. Further, because defect reduction was the goal of Six Sigma at Motorola, the focus was on the manufacturing floor. Virtually ignored was the waste and inefficiency generated by other areas of the business, from backroom operations like accounting to more prominent areas such as sales and marketing. This “find and fix it” approach to Six Sigma utilization totally ignored the design areas of Motorola. This failure to address both the backroom operations and design elements of Six Sigma tactical application ultimately resulted in the complaints about Motorola and Six Sigma in the late 1990’s and early twenty-first century. It wasn’t that Motorola had abandoned Six Sigma as some suggested. Instead, it simply never reach certain hallmark of Six Sigma deployment.

Further, Motorola did not use Six Sigma strategically. As we shall see shortly, organizations like AlliedSignal and General Electric eventually saw the power of utilizing Six Sigma strategically. This included but was not limited to using Six Sigma as an enabler to enhancing revenue, growth goals, and ultimately customer satisfaction.

When I questioned Ted Zucconi about how much Six Sigma pervaded the culture of Motorola, he answer highlighted the above.

It became part of the culture, but more at a tactical level. The focus was so much on growth, numbers, and manufacturing. Six Sigma never directly dealt with customers or how we designed things even though designers were educated. Even though people sent reports up to corporate, it doesn’t mean that they truly embraced it as a part of doing business.
Sometimes certain business units did absolutely the minimum. There wasn’t a uniform set of expectations and if you were meeting your numbers the corporate expectations seemed voluntary.

One aspects of Six Sigma that General Electric brought to the table was the emphasis of it being an expectation of every business unit. I asked Ted Zucconi to what extent that was the case at Motorola.

There was a corporate edict that you had to do Six Sigma but you had the option of doing it your way. For example, our semiconductor business caught up in the boom-or-bust business cycle. In the boom they were busy increasing capacity and figuring out allocations. During the period of excess capacity, they worried about cost reductions, some of which were quality improvements. Having worked for more than one semiconductor company I observed that apparently sometimes it is difficult for managers to see the connection between quality, yield, and capacity. I know Intel does, but most don’t.

I inquired into what comprised the corporate edict.

The corporate edict was centered on education and reporting of defect levels. I never saw an edict around expectations of number of projects or so many master black belts or black belts.

Another Motorola business leader, Arnold Klugman, agrees. The Chief Manufacturing Officer for the Motorola computer group in Tempe, Arizona, Klugman notes that Six Sigma’s focus on manufacturing could be explained by its being an engineering company. “Since it was an engineering driven corporation the tag line was, ‘We don’t want to minimize creativity.’ Thus the factor was driving out defects, not building quality in at the design stage.”
As it relates to corporate edicts, Klugman also agrees with Zucconi. “At GE with Jack Welch it was truly top-down driven. There was no optionality. At Motorola there was massive optionality.”
Klugman then goes on to talk of this optionality. “There was no doubt that Bob Galvin was a believer and pushed it. But if a business unit was very successful and returning the revenue plan and achieving their numbers and growing market share he business leader has no difficulty saying leave me alone and I will do Six Sigma the way I choose. The optionality was pervasive.”

Source: Eckes, George. “Six Sigma Execution: How the World’s Greatest Companies Live and Breathe Six Sigma”. McGraw-Hill, USA, 2005.

Risk Analysis and Management

Function: How to evaluate and control the risks you face

Why use the tool? Risk Analysis is a formal framework that helps you to assess the risks that you or your organizations face. A good risk analysis will help you to decide what actions to take to minimize disruptions to your plans. It will also help you to decide whether the strategies you could use to control risk are cost-effective.

How to use the tool: Here we define risk as “the perceived extent of possible loss”. Different people will have different views of the impact of a particular risk: What may be a small risk for one person may destroy the livelihood of someone else.

One way of putting figures to risk is to calculate a value for it as:

Risk = probability of event x cost of event

This allows you to compare risks objectively. We use this approach formally in decision making with Decision Trees.

To carry out a risk analysis, follow these steps:

1. Identify Threats:
The first stage of a risk analysis is to identify threats facing you. Threats may be:
 Human - from individuals or organizations, illness, death, etc.
 Procedural - from failures of accountability, internal systems and controls, organization, etc.
 Natural - threats from weather, natural disaster, accident, disease, etc.
 Technical - from advances in technology, technical failure, etc.
 Political - from changes in tax regimes, public opinion, government policy, foreign influence, etc.
 Project - risks of cost over-runs, jobs taking too long, of insufficient product or service quality, etc.
 Financial - from business failure, stock market, interest rates, unemployment, etc.
 Others

This analysis of threat is important because it is so easy to overlook important threats. Perhaps the best way to identifying all threats is to use a number of approaches:
 Firstly, run through a list such as the one above, to see if any apply.
 Secondly, think through the systems, organizations or structures you operate, and analyze risks to any part of those.
 See if you can see any vulnerability within these systems or structures.
 Ask other people, who might have different perspectives.

2. Estimate Risk:
Once you have identified the threats you face, the next step is to work out the likelihood of the threat being realized and to assess its impact. One approach to this is to work out the probability of the event occurring, and to multiply this by the amount it will cost you to set things right after it has happened. This gives you a value for the risk. Your estimates of the probability of the risk occurring and of the cost of the event will depend on your knowledge of your own systems, controls and resources.

3. Managing Risk:
Once you have worked out the value of risks you face, you can start to look at ways of minimizing them. When you are doing this, it is important to choose cost effective approaches. There is no point in spending more to eliminating a risk than the cost of the event if it occurs. In many cases it may be better to accept the risk than to use excessive resources to eliminate it.

Risk may be managed in a number of ways:
 By using existing assets: Here existing resources can be used to counter risk. This may involve improvements to existing methods and systems, changes in responsibilities, improvements to accountability and internal controls, etc.
 By contingency planning: You may decide to accept a risk, but choose to develop a plan to minimize its effects. A good contingency plan will allow you to take action immediately, with the minimum of project control.
 By investing in new resources: Your risk analysis should give you the basis for deciding whether to bring in additional resources to counter the risk.

4. Reviews:
Once you have carried out a risk analysis and management exercise, it may be worth carrying out regular reviews. These might involve formal reviews of the risk analysis, or may involve testing systems and plans appropriately.

Key points: Risk analysis allows you to examine the risks that you or your organization faces. It is based on a structured approach to thinking through threats, followed by an evaluation of the probability and cost of events occurring. Risk analysis forms the basis for risk management. Here the emphasis is on cost effectiveness. Risk management involves adapting the use of existing resources, contingency planning and good use of new resources.

Source: Manktelow, James, ”Mind Tools: Practical Thinking Skills for an Excellent Life”, Mind Tools Ltd, U.K, 2003.

Time Management for Right Brained People (Or-What to do if to-do lists are not your style)

Ask some people about managing time and a dreaded image appears in their minds. They see a person with a 50-item to-do list clutching a calendar that's chock full of appointments. They imagine a robot that values cold efficiency, compulsively accounts for every minute, and is too rushed to develop actual relationships. Often this image is what's behind the comment, "Yeah, there are some good ideas in those time management books, but I'll never get around to using them. Too much work."

The stereotypes about time management present us with a kernel of truth. Sometimes people who pride themselves on efficiency are merely busy. In their rush to check items off their to-do lists, they might be fussing over things that don't need doing - tasks that create little or no value in the first place. If this is one of your fears, relax. The point of managing time is not to load ourselves down with extra obligations. Instead, the aim is to get the important things done and still be human. An effective time manager is the person who's productive and relaxed at the same time.

Personal style enters the picture too. Many time management suggestions appeal to "left-brained" people - those who thrive on making lists, scheduling events, and handling the details first. They may not work for people who like to see wholes and think visually. There are as many different styles for managing time as there are people. The trick is to discover what suits you. Do give the strategies a fair trial. Some may work for you with a few modifications. Instead of writing a conventional to-do list, for instance, you can plot your day on a mind map. Or write to-do's one per 3x5 card, in any order that tasks occur to you. Later you can edit, sort, and rank those cards, choosing which ones to act on. Strictly speaking, time cannot be managed. Time is a mystery, an abstract concept that cannot be captured in words. The minutes,
hours, days, and years march on whether we manage anything or not. What we can do is manage ourselves in respect to time. A few basic principles can do that as well as a truckload of cold-blooded techniques. Among those principles are the following.

Know your values
Begin managing time from a bigger picture. Instead of thinking in minutes or hours, view your life as a whole. Consider what that expanse of time is all about. Write a short mission statement for your life - a paragraph that describes your values and the kind of life you want to lead. Periodically during the day, stop to ask if what you're doing is contributing to that life.

Do Less
Managing time is as much about dropping worthless activities as adding new ones. The idea is to weed out activities that deliver little reward. One tool for purging your schedule is a "not-to-do" list. On this list include the notorious time-wasters in your life tasks that are just as well left undone. Examples are activities motivated only by obligation, such as compulsively keeping up with the latest fashions or television shows. Decide right now to eliminate activities with a low payoff. When you add a new activity of your schedule, consider dropping a current one.

Slow Down
Sometimes it's useful to hurry, such as when you're late for a meeting or about to miss a bus. At other times, haste is a choice that serves no real purpose. If you're speeding through the day like a launched missile, consider what would happen if you got to your next destination a little later than planned. Gaining a few minutes might not be worth the added strain.

Remember People
Few people on their deathbeds ever say, "I wish I'd spent more time at the office." They're more likely to say, "I wish I'd spent more time with my family and friends." The pace of daily life can lead us to neglect the people we cherish. Efficiency is a concept that applies to things – not people. When it comes to relationships, we can often benefit from loosening up our schedules. We can allow extra time for spontaneous visits, free-ranging conversation, and conflict resolution.

Focus on Outcomes
You might feel guilty if you spend two hours napping or watching soap operas. But if you're regularly meeting your goals and leading a fulfilled life, there's probably no harm done. When managing time, it's the overall goal of personal effectiveness that counts - more than the means we use to get there. There are many methods for planning your time. Some people prefer a written action plan that carefully details each step leading to a long-range goal. Others just note the "due date" for accomplishing the goal and assess their progress as the date approaches. Either strategy can work. Visualizing the desired outcome can be as important as a detailed action plan. Here's an experiment. Write a list of your goals for the next six months. Then create a vivid mental picture of yourself attaining them. Do this several times in the next few weeks. File the list away, making a note on the calendar to review it in six months. At that time, note how many of your goals you have actually accomplished.

Handle it Now!
A backlog of unfinished tasks can result from postponing decisions or procrastinating. An alternative is to handle the task or decision immediately - to answer that letter now or make that phone call as soon as it occurs to you. You can also save time by graciously saying no to projects that you don't want to take on. Saying "I'll think about doing that and get back to you later" may only mean that you'll take more time to say no later.

Buy Less
Before you purchase an item, ask how much time and money it will take to locate, assemble, use, repair, and maintain. You might be able to free up hours by doing without. If the product comes with a 400-page manual or 20 hours of training, beware. Remember that inexpensive, "low-tech" tools can actually save time. Keeping track of your appointments and to-do lists on a computer might actually take more time than using a pencil, paper, and the old-fashioned appointment book. Before rushing to the store to add another possession to your life, see if you can use or adapt something you already own.

Forget About Time
Schedule "down time" every day - a period when you're accountable to no one and have nothing to accomplish. This is time to do nothing, free of guilt. Even a few minutes spent this way can yield a sense of renewal. Also, experiment with decreasing your awareness of time. Leave your watch off for a few hours each day. Spend time in an area that's free of clocks. Notice how often you glance at your watch and make a conscious effort to do that less. If you still want some sense of time then use alternatives to the almighty, unforgiving clock. Measure your day with a sundial, hourglass, or egg timer. Or synchronize your activities with the rhythms of nature - for example, rising at dawn and going to bed at sundown. You can also plan activities to harmonize with the rhythms of your body. Schedule your most demanding tasks for the times when you're normally most alert. Eat when you're hungry, not according to the clock. Scrap schedules when it's appropriate. Sometimes the vest-laid plans are best laid to rest. In summary, take time to retreat from time. Create a sanctuary, a haven, a safe place in your life that's free from any hint of schedules, lists, or accomplishments. One of the most effective ways to manage time is periodically to forget about it.

Source:
http://www.clt.cornell.edu/campus/learn/LSC%20Resources/TimeManagmentforRightBrain.pdf

History of Management

Although, the history of the word manage may be traced back to the Latin word manus meaning “hand,” the history of modern management begins with the Industrial Revolution. The Industrial Revolution was the result of the development of the steam engine by James Watt in the eighteenth century in Great Britain. In 1830, shortly after the introduction of the engine in the United States, Colonel John Stevens, the father of American engineering, built the first 23-mile-long railroad. By 1850, the total railroad track increased to 9,000 miles extending as far west as Ohio. Another factor that played an instrumental role during the Industrial Revolution was the development of the telegraph by F. B. Morse. The first experimental telegraph line was built in 1844, and by 1860 there was a total of 50,000 miles of telegraph line in the United States.

Before 1835, there were only 36 firms in the United States that employed more than 250 workers. During the last decade of the nineteenth century, persons such as John D. Rockefeller, Andrew Carnegie, and Cornelius Vanderbilt took advantage of railroads and telegraph lines to build big corporations employing thousands of people. In turn, this led to the need of a systematic approach to management.

Two engineers who may be called the fathers of modern management were Frederick W. Taylor (1856–1915) and Henri Fayol (1841–1925). Frederick W. Taylor was born in Philadelphia; although accepted into Harvard University, he served a 4-year apprenticeship as a machinist. In 1878, he joined Midvale Steel Company, and at the age of 28, in 1884, he became chief engineer. In 1906, Taylor became president of the American Society of Mechanical Engineers, and his basic views concerning management were finding the most appropriate method for performing a job and assigning the right person for each job.
Henri Fayol graduated in 1860 from the National School of Mines at Saint-Etienne, France, and outlined 14 principles of management, including division of work, discipline, line of authority, initiative, order, and centralization. In 1916, he published a book entitled Administration Industrielle et Generale covering most of his thoughts on management. The book was translated into English twice: in 1930 by J. A. Coubrogh and in 1949 by C. Storrs.

In 1911, the first ever conference on the topic of scientific management was held, and during the period from 1912–1936 various professional societies concerned directly or indirectly with the promotion of management were formed. For example, in 1912, 1917, 1923, and 1936, the Society to Promote the Science of Management, the Society of Industrial Engineers, the American Management Association, and the Society for the Advancement of Management were established, respectively. By 1925, most engineering schools in the United States were offering some kinds of courses on management.

In 1924, a study on various aspects of human relations (e.g., investigating the effects of varying illumination, length of workday, and rest periods on productivity) was initiated by the National Research Council of the National Academy of Sciences at the Hawthorne Plant of Western Electric in the state of Illinois. The findings of this study also played an important role in the development of the management field. Since those days, thousands of individuals have contributed to the management field. A vast number of publications in the form of books, conference proceedings, and journal articles have appeared, and thousands of university-level institutions award undergraduate and graduate degrees in various aspects of management around the world. Furthermore, the field of management has branched out into many specialized areas, and engineering and technology management is one of those areas.

Source: Dhillon, B.S., “Engineering and Technology Management Tools and Applications”, Artech House, U.S., 2002.