Frederick W.

Taylor's 1899 Pig Iron Observations: Examining Fact, Fiction, and Lessons for
the New Millennium
Author(s): Charles D. Wrege and Richard M. Hodgetts
Source: The Academy of Management Journal, Vol. 43, No. 6 (Dec., 2000), pp. 1283-1291
Published by: Academy of Management
Stable URL: http://www.jstor.org/stable/1556350 .
Accessed: 10/02/2011 10:33

Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless
you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you
may use content in the JSTOR archive only for your personal, non-commercial use.

Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at .
http://www.jstor.org/action/showPublisher?publisherCode=aom. .

Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed
page of such transmission.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.

Academy of Management is collaborating with JSTOR to digitize, preserve and extend access to The Academy
of Management Journal.

http://www.jstor.org
? Academy of Management Journal
2000, Vol. 43, No. 6, 1283-1291.

FREDERICK W. TAYLOR'S 1899 PIG IRON OBSERVATIONS:

EXAMINING FACT, FICTION, AND LESSONS
FOR THE NEW MTILLENNIUM

CHARLES D. WREGE
Cornell University

RICHARD M. HODGETTS
Florida International University

Taylor's pig iron observations at Bethlehem Iron in 1899 are often cited as an example
of how scientific management helped increase industrial efficiency. The current re-
search, relying almost exclusively on primary sources, reveals that Taylor's famous pig
iron anecdote was erroneous. Additionally, this article offers lessons and guidelines
for managers in the new millennium.

Although Frederick W. Taylor's impact on man-
agement cannot be denied, whether his work al-
ways represented the use of science to solve man-
agement problems is questionable. George has said
that Taylor believed "to maximize output with a
given level of effort. . . the scientific method had to
be applied to worker selection, job determina-
tion, creation of a proper environment, and so on,
to determine properly the task for each man"
(1972: 93).
This concept of a scientific, research-based ap-
proach in managementpractice was not new (Hoag-
land, 1955). For example, in Poland in the late
1890s Karol Adamiecki was developing work flow
network diagrams to solve production problems in
local factories (Marsh, 1975). However, Taylor did
impress his audiences by describing the apparent
use of scientific methods to reduce costs and to
create prosperity for the workforce. More impor-
tantly, his claims were readily accepted by practi-
tioners and scholars until almost 75 years later,
when they were challenged by Wrege and Perroni
(1974). These authors focused on how Taylor's ac-
count of his study of pig iron loading at the Beth-
lehem Iron Company continually changed in the
years from 1901 to 1911. However, they did not
attempt to study the details of pig iron loading or
whether the company or the workers actually pros-
pered from the piece rate system that Taylor rec-
ommended. The current research focuses on these
latter three aspects of Taylor's work.
The reason for the continued acceptance of Tay-
lor's observations largely lies in the persistent reli-
ance of management scholars on published sources
(usually those appearing in management publica-
tions) rather than on original documents prepared
at the time of the actual events Taylor described.
1283
Unfortunately, for the majority of the readers of
management publications, the printed word has an
aura of authenticity that is seldom questioned, and
original documents are neglected.
This study draws on original documents and pre-
sents an analysis of what really happened during
the famous pig iron observations of 1899. It also
presents lessons to be learned by researchers in
general and management scholars in particular.
BACKGROUND
Management history is replete with anecdotes
regarding the work of prominent people. Yet per-
haps no story is more famous that that of Frederick
Taylor's pig iron observations, which were con-
ducted at the Bethlehem Iron Company of South
Bethlehem, Pennsylvania, in March-May 1899.
Taylor had come to Bethlehem at the behest of
Robert Linderman, president of the company, to
reduce costs by introducing a piece rate system
(South Bethlehem Globe, 1898; Taylor, 1898).
When Taylor arrived at Bethlehem, pig iron was
selling at $11.50 per long ton (2,240 pounds) (Hob-
son, 1899), and the company had 10,000 tons on
hand. However, it was waiting for a better price
before selling. By March 1899, the price had risen
to $13.50 per long ton (Iron Age, 1899), and the
company quickly sold its inventory and began
preparationsfor loading the iron onto gondola cars
for shipment. At this point Taylor decided to take
advantageof the opportunity to study pig iron load-
ing for the purpose of lowering loading costs, as
well as to secure data for a book he was preparing
on time and performing work. He assigned two of
his assistants, James Gillespie and Hartley C.
Wolle, to study the loading process. They reported
1284 Academy of Management Journal
their observations to Taylor, who made decisions.
The two men began by first selecting ten of the very
best workers and having them work as fast as they
could loading pig iron for a full day. Commenting
on the results, Wren (1994) reported:
Duringthe first day, the workersloaded 75 tons
each,fillingone car.Sincethe averagetons per day
had previously been about 121/2tons per worker,the
workerswere exhausted.Gillespieand Wolle then
deducted40 percentfor time to be allottedto rest
anddelays,establishingthe new standardat 45 tons
per worker per day. (1994: 117)
On the basis of these results, Taylor then set a
piece rate of $0.0375 per ton. So a worker who met
the standard of 45 tons would earn $1.69 for the
day, a substantial increase over the $1.15 day rate
that the average pig iron loader was then earning.
On countless occasions, Taylor used the story he
had fashioned about the pig iron observations to
explain how productivity increases at Bethlehem
Iron were achieved and how the workers earned
more money. The "win-win" aspect of the anecdote
was extremely attractiveto Taylor's listeners. How-
ever, was his story accurate, or was it contrived
through the use of omissions and generalizations
regarding what really happened a century ago at
Bethlehem?
METHODS
In an effort to clarify the work of Wrege and
Perroni (1974) on Taylor's pig iron observations
through use of greater detail and to evaluate the
accuracy of Taylor's reports of his observations, we
took four approaches. First, the report written by
Gillespie and Wolle regarding the results of the
observations in 1899 was studied in detail to deter-
mine the amount of work that the pig iron loaders
did and their rates of pay. Second, an analysis was
made of the weather conditions at Bethlehem dur-
ing this time period. Third, the personal diary of
Robert Sayre, second largest stockholder at Bethle-
hem, was studied. Fourth, from these new findings,
lessons were derived for management scholars for
the new millennium.
A number of important considerations are criti-
cal in examining Taylor's pig iron story. One of the
most significant is the nature of the product and the
layout of the shipping area at Bethlehem Iron. A
second is the process that was used in loading the
iron for shipment. A third is the performanceof the
workers and the costs associated with the work.
The following sections examine each of these.
December
Layout and Loading
Pigs and piles. In 1899 at Bethlehem, a pig of
iron (or ingot; 92 pounds) was 32 inches long, 41/2
inches high, and 4 inches wide. These pigs were
organized for loading by first putting them into
"basic piles." Each pile consisted of 390 pigs and
was approximately 2 feet high, 2 feet deep, and 35
feet long. Then the workers added the basic piles
together to create a pile of full pigs 10 feet tall. As
seen in Figure la, the final result was 12 rows with
5 basic piles per row and then a shorterrow in front
that consisted of just over 2.5 basic piles. The rea-
son for the shorter row was to make it possible to
erect planks supported by wooden blocks from the
pile of full pigs to the gondola car, located directly
in front of the short pile. The men could then pick
up the pigs, walk on the plank, and put them into
the car.
Gangs and gondolas. In the period March-May
1899, two types of standard gauge, wood gondola
railway cars were being used at Bethlehem. Ac-
cording to John O'Connor, a freight car historian,
the older of the two types was the 1869 gondola,
which was 30 feet long and made to hold 25,000
pounds; the newer was the 1880 gondola, which
was 33 feet long and made to hold 36,000 pounds
(J. O'Connor, personal interview, September 2,
1997). In either case, it was possible to line up ten
cars in front of a full pile and begin loading.
As already noted, planks would be placed from
the top of the gondola car to the front portion of the
pile, which was five feet high (again, see Figure la)
and three feet from the car. Two people in the gang
would remain in the car, and the rest would bring
the pig iron to them to be stacked neatly in the
gondola so that the car would not tilt in transit and
derail. The gang would startwith level 1 of the pile
and then move on to level 2. As the pig iron loading
continued, the top of the pile would be reduced
and the elevation of the planks would be increased,
so that the men could load levels 3, 4, and 5.
This explanation fits well with Taylor's descrip-
tion and gives the impression that the loading was
both simple and routine. In fact, it was not so
simple, for four reasons we discovered after careful
analysis of the original documents but that Taylor
failed to include when he told his pig iron story.
First, considerable time was required to adjust the
wooden blocks that were needed to support the
planks (Gillespie & Wolle, 1899). Second, during
bad weather the workers had to walk very carefully
on the ingots and the planks, thus reducing their
output-and weather in this geographicregion dur-
ing the winter and spring was sometimes brutal
(Allentown Daily Call, 1899). Third, controlled ex-
2000 Wregeand Hodgetts 1285

FIGURE 1
Configurations of Iron to Be Loaded

(la) A Full Pile of Pigs

10'

(lb) Types of Pocket Casts

Type 1 cast, hemmed Type 2 cast, hemmed Type 3 cast, hemmed

in on all sides. in on two sides. in front and rear.
Average loading time = Average loading time = Average loading time =
.576 minutes .548 minutes .552 minutes

periments conducted by Gillespie and Wolle in the
middle of March 1899 revealed that the work done
by each of the work teams varied sharply-as did
the labor cost per ton (see Table 1). So from the very
beginning there were different amounts being
loaded by different work teams, and Taylor and his
associates were having trouble determining both
standard work levels and incentive rates. Fourth,
much of the loading was actually done from what
were called "pocketed casts." These were piles of
pigs located in various configurations around the
yard and containing special pig iron orders of 25
tons each, as shown in Figure lb. The average time
it took a man to load a pig from a pile when walking
1 to 15 feet in good weather was .271 minutes; in
contrast, loading from pocketed casts could re-
quire, as can be seen in Figure lb, as much as .576
minutes per pig because of the configuration of the
casts (Gillespie & Wolle, 1899). Therefore, Taylor
had to raise the pay rate for loading from pocketed
casts, in some cases to as much as $0.0700 per long
ton, and this significantly influenced overall costs.
1286 Academy of Management Journal December

TABLE1
Controlled Observations of Pig Iron Loadinga
Factors Friday, March 10 Saturday, March 11 Monday, March 13

Storage conditions Pile of 17.9 long tons (pocketed) Pile of 25.7 long tons (pocketed) Pile of 16.6 long tons (pocketed)
Type of pig Half: 46 pounds Full: 92 pounds Full: 92 pounds
Total pounds loaded 40,096 (17.9 x 2,240) 57,568 (25.7 X 2,240) 37,184 (16.6 X 2,240)
Pigs loaded 872 (40,096/46) 626 (57,568/92) 404 (37,184/92)
Tons loaded 17.9 (40,096/2,240) 25.7 (57,568/2,240) 16.6 (37,184/2,240)
Walk on level 5 feet 5 feet 7 feet
Walk on plank 12'3" rise 10'6" rise 2'9" rise
Top of car 2'6" above the plank 2'6" above the plank 2'6" above the plank
Size of gang 4 men 12 men 10 men
(2 in the car, 2 loading) (2 in the car, 10 loading) (2 in the car, 8 loading)
Time spent loading 52.5 minutes 54.0 minutes 14.0 minutes
Weather conditions Cloudy, 50?, Cloudy, 55?, Fair, 60?,
clear, milder clear, milder cloudy, threatening
Tons per man 4.48 (17.9/4) 2.14 (25.7/12) 1.66 (16.6/10)
Tons loaded per man per minute 0.08533 (4.48/52.5) 0.03963 (2.14/54.0) 0.1660 (1.66/10)
Tons loaded per man in 1 hour 5.12 (0.08533 X 60) 2.38 (0.039630 X 60) 9.96 (0.1660 x 60)
Tons loaded per man in 10 hours 51.2 (5.12 X 10) 23.8 (2.38 X 10) 99.6 (9.96 X 10)
Tons loaded by gang 204.8 (51.2 X 4) 285.6 (23.8 x 12) 996 (99.6 X 10)
Cost to load $4.60 ($1.15 X 4) $13.80 ($1.15 X 12) $11.50 ($1.15 x 10)
(4 men) (12 men) (10 men)
Cost per ton $0.022461 ($4.60/204.8) $0.048319 ($13.80/285.6) $0.011546 ($11.50/996)

a
Source: Gillespie and Wolle (1899: 23-28).

In all likelihood, Taylor overlooked these problems
because the work approach was eventually revised
and the new one was easier to explain.
Performance and Pay
Gillespie and Wolle's ongoing analysis led them
to conclude that the initial method of loading the
pigs was inefficient. Too much time was lost in
placing the planks in their proper position and
supporting them with blocks of wood. So they de-
signed metal hangers that hooked over the side of a
gondola car, hanging two feet below the top of the
car. The hangers made it possible for one man to
place one end of a plank on a pile and the other end
in the hangers, thus eliminating the need to arrange
the wooden blocks on the railway tracks.
Gillespie and Wolle also met with Taylor to de-
termine the piece rate incentive plan. Taylor had
set a rate of $0.0375 per long ton but found that the
men would not load pig iron at this rate. There
were two reasons for this reluctance. One was that
the day rate was $1.15, and a worker would have to
load 31 long tons in order to make more than this
amount ($0.0375 x 31 = $1.16). The second reason
was that the work of loading the increased tonnage
was extremely fatiguing, as will be seen shortly,
and many loaders found that after a day or two of
loading they had to be reassigned to other work on
a day rate basis because they could not continue
their loading efforts. As a result, a revised incentive
plan based on how far the workers had to carrythe
iron was introduced. The piece rate per ton was
increased to $0.0438 for those who were loading
pig iron piled no more than 15 feet from the side of
the car and not more than 5 feet below the top edge
of the car. For those who had to walk greater dis-
tances or faced obstacles in carrying the iron, the
rate went as high as $0.0700 per ton (Gillespie &
Wolle, 1899).
Under the revised incentive plan, a few workers
continued to load the cars, but the others had be-
come too fatigued to remain on the incentive plan.
So Gillespie and Wolle again changed the system.
Each man was now assigned to a gondola, and he
would simply throw the pigs into the car. With this
arrangement,some workers were able to make more
money by loading the pig iron under the incentive
system than by accepting the $1.15 day rate. Of
course, the actual wages earned depended on the
distance the iron had to be carried, the elevation of
the planks, and the difficulty of the loading. More-
over, most workers were unable to make more than
$0.90 a day on the piece rate system, and so they
chose to go back to the day rate of $1.15. However,
two workers, Henry Noll and Simon Conrad, did
profit from the incentive system because they were
loading from distant pocketed casts and were thus
paid as much as $0.070 per long ton. Yet not even
they worked on the piece rate system every day.
They needed time to rest and recover their energy.
As seen in Table 2, in March 1899 Noll was on
2000 Wregeand Hodgetts 1287

TABLE 2
Henry Noll and Simon Conrad's Work Recordsa
Date Day Type of Pay Days

Noll
March 30-31 Thursdayand Friday Incentive 2 days
April 1, 3, 4 Saturday,Monday, and Tuesday Incentive 3 days
April 5-14 Wednesday-Friday Daywork 9 days
April 15 Saturday Incentive 1 day
April 17-18 Monday and Tuesday Daywork 2 days
April 19 Wednesday Incentive 1 day
April 20 Thursday Daywork 1 day
April 21, 22, 24-27 Friday-Thursday Incentive 6 days
April 28-29 Friday and Saturday Daywork 2 days
May 1-6, 8 Monday-Saturdayand Monday Daywork 7 days
May 9 Tuesday Incentive 1 day
May 10-11 Wednesday and Thursday Daywork 2 days
May 12-13 Friday and Saturday Incentive 2 days
May 15-16 Monday and Tuesday Daywork 2 days
May 17-18 Wednesday and Thursday Incentive 2 days
May 19-20 Friday and Saturday Daywork 2 days
May 22-25 Monday-Thursday Incentive 4 days
May 26 Friday Daywork 1 day
May 27-29 Saturdayand Monday Incentive 2 days

Conrad
May 1-5 Monday-Friday Daywork 5 days
May 6 Saturday Incentive I1day
May 8 Monday Daywork 1 day
May 9-10 Tuesday and Wednesday Incentive 2 days
May 11 Thursday Daywork 1 day
May 12 Friday Incentive 1 day
May 13 Saturday Daywork 1 day
May 15-16 Monday and Tuesday Incentive 2 days
May 17 Wednesday Daywork 1 day
May 18-19 Thursday and Friday Incentive 2 days
May 20, 22-24 Saturdayand Monday-Wednesday Daywork 4 days
May 25-27, 29 Thursday-Saturdayand Monday Incentive 4 days

a Source:
Wrege and Greenwood (1899).

the piece rate system for only 2 days. During April
and May of that year, he was on the piece rate
system only 11 days each month and was paid on a
day work basis for the remaining 14 work days in
each month. A close analysis of Table 2 shows that,
in early April 1899, Noll worked under the incen-
tive payment plan for 3 days and then returned to
day work for 9 days. Later in the month, he worked
6 days on incentive (a day off, Sunday, fell in the
middle of this work period) and then went on day
rate for 9 days. Only at the end of May did he work
steadily on the incentive system. Of course, some of
the occasions on which he was paid a day rate were
a result of the weather-but many were not. This is
evident (see Table 2) from the records of the other
loader, Simon Conrad, who had 12 incentive days
during May. Six of these days were ones on which
Noll was on day rate! So it is highly likely that Noll
could also have worked on incentive these days.
Why did he not? Fatigue was a key reason.
Another factor that was never explained by Tay-
lor is how the pig iron handlers could have saved
the company money, given that there were so many
costs associated with their efforts. Taylor reported
that his goal was to load a long ton at a cost of
$0.0500 (Taylor, 1901). In fact, this goal was impos-
sible, given that workers could earn more than
$0.0500 by loading from the pocketed casts, where
the rates were as high as $0.0700 per long ton. How
much, then, did Taylor save the company with his
new method of loading the iron?
In analyzing the costs for the 7,490 long tons that
were actually loaded from March 30 through May
31, 1899, it is important to realize that only 27
percent (2,015/7,490) of this work was done under
the incentive plan. The bulk of the tonnage was
loaded by day gangs paid $0.0940 per ton. Exhibit 1
(next page) provides an analysis of these data.
So Taylor's story about loading the pigs at
$0.0500 per ton was not true, although he did man-
1288 Academy of ManagementJournal December

EXHIBIT1 pies of Scientific Management, or from current text-

Costs for Loading Pig Iron at Bethlehem Iron books. In Taylor's case, he simplified the observa-
Company, March 30-May 31, 1899: The Old tions by presenting only some of the information.
Method versus Taylor's Modified Approach As a result, the story is fluid and consistent, but it
omits many significant facts, as reported here. In
Old method:
Total cost of loading 7,490 long tons $677.10 retrospect, it is evident that Taylor took some of the
under day rate of $0.0904/ton facts associated with the observations and wove
them together into a coherent and logical story that
Modified approach:
intrigued his audience.
Amount Loaded under Piece Rate
In fairness, Taylor is not the only person to have
Worker Long Tons Amount Earned presented erroneous anecdotal data. Many manage-
ment textbook authors have drawn on secondary
Noll 745 $ 41.58
sources in presenting Taylor's studies. In the pro-
Conrad 457 23.01
All others 813 24.32 cess, they have embellished the data and added
Total $ 88.91
"facts"that are simply not true. As a result, Taylor's
2,015
anecdotes have now taken on mythical propor-
Cost of Loading Remaining Amount tions. For example, the data from Gillespie and
Wolle show that, afterthey had conducted one day
7,490 long tons of walking experiments with a group of seven
-2,015 long tons loaded under
piece rate workers, Gillespie and Wolle assigned the pig iron
5,475 long tons left to be loaded handlers to their tasks. In contrast to what some
under day rate ($0.904/ton) basic textbooks report, Taylor and his assistants
$494.94 conducted no training of workers and made no
Totalcost of loading7,490long tons $ 88.91
refined adjustments to the loading routines. The
undermodifiedapproach, only changes that were made were in the amount of
March30-May31,1899 money paid per long ton (up to $0.0700 for some
494.94
pocketed casts) and the way the workers loaded the
$ 583.85 cars (initially in teams and then individually).
Savingsbasedon use of modified $ 677.10
approach
-583.85
Primary Sources Must Be Consulted
$ 93.25
The second lesson to be learned for management
historians is that original sources must be exam-
ined because they offer a more complete, more
age to reduce the overall cost of loading the 7,490 detailed picture. The data provided by Gillespie
long tons by a total of $93.25 (see Table 3). On the and Wolle clearly show that the pig iron loading
other hand, he omitted a significant additional cost:
techniques had to be continually changed because
Because the pig iron handlers were now throwing the work was too demanding and the money was
the iron into the car, there would be damage to the not sufficiently motivational.
gondolas, and these costs would be billed back to
Bethlehem. Additionally, original documents reveal that
Taylor's primary interest in conducting these ob-
servations was probably to convince Joseph Whar-
LESSONSTO BE LEARNED ton, Bethlehem's primary stockholder, to let him
The pig iron observations offer some very useful buy stock at a reduced price (Taylor, 1899). Tay-
lessons to management researchers, especially lor's observations may well have been influenced
those in the management history area. The follow- by his attempts to ingratiatehimself with the major
ing is a discussion of five of the most useful. stockholders, who knew little about what he was
doing and were likely to believe his reports of great
success. In fact, Robert Sayre, who was at Bethle-
Anecdotal Data Are Often Erroneous hem when Taylor was supposedly saving the com-
Most of what management scholars know about pany money, wrote in his diary for April 8, 1899,
the pig iron observations has been learned from that Taylorwas "causing a great deal of money to be
secondary sources, such as Taylor's (1911) Princi- spent unnecessarily" (Robert Sayre Diary, 1899).
2000 Wregeand Hodgetts
All Data Have Inconsistencies
One of the reasons why Taylor's pig tale has
survived for so long is that it has no inconsisten-
cies. Everything in the story fits together neatly. In
fact, an analysis of the primarydata associated with
these observations shows that a number of things
made it difficult to state definitively what was hap-
pening and to measure the full bottom-line impact
of the work. When there are no inconsistencies in
the data, one has to wonder what has been left out
of the calculations.
For example, before undertakingthe studies, Tay-
lor relied on data generatedby Gillespie and Wolle
from company records in March 1899. They found
that a total of 3,430 long tons had been loaded in
2,697 hours at a cost of $310.10, or $0.1106 per ton
(3,430/$310.10), and that the averageperson loaded
12.7 tons daily (Gillespie & Wolle, 1899). These
records,however, were inadequatebecause they did
not cover the number of men loading the iron, how
the iron was stored (whetherin unobstructedpiles or
pocketed casts), the distance the iron had to be car-
ried, the height of the planks,the type of railwaycars
being loaded, or the weatherconditions fromMarch1
to March 15, 1899.
Second, the cost of loading a pig varied consid-
erably, as seen in Table 1. One of the determining
factorswas how long the crews worked. The data in
this table show that the crew loading iron on March
13 did so at a cost of less than 2 cents per ton, but
they worked for only 14 minutes. The other two
crews worked for a little less than 1 hour. Given
that the fatigue factor was critical in this work and
the typical workday was 10 hours, how valuable
were findings that were based on less than 60 min-
utes of work?
Third, when each worker was assigned his own
gondola to load and the pigs were thrown into the
wooden carratherthan stackedneatly in it, the useful
life of the car would have been reduced. The reason
the pigs had been stackedwas to ensure that they did
not slide about and cause excessive wear and tear on
a gondola's bearingsand undercarriage,injuries that
would cause derailment.Damagefromthis new load-
ing method would have been costly, and the railroad
would have passed these costs on to Bethlehem.
However, this fact was never explored by Gillespie
and Wolle, an omission that leaves one to ponder
what the long-runcost of loading the pigs under this
new arrangementwould have been.
Replication Is the Hallmark of Good Science
There is no reported evidence of other compa-
nies' copying Taylor's approach and being able to
1289
drive down their own loading costs. Yet such evi-
dence would be the best proof that the observations
did indeed produce the results that Taylor cited. In
every science, replication is critical to theory vali-
dation.
One reason for the lack of replication is undoubt-
edly that Taylor's approach was no more efficient
than the old method of loading iron. Any company
that carefully examined the costs and the savings
would have quickly concluded that the prize was
not worth the pursuit.
A second reason overlooked by most by research-
ers is that Taylor's observations could not have
added much to the company's bottom line, even if
everything worked according to plan. His stated
objective was to cut the cost of loading pig iron
from $0.0904 per long ton to $0.0500, thus saving
the company $0.0404 per long ton. Overlookingthe
fact that his payment plan, with its incentives run-
ning as high as $0.070 per long ton, made a $0.0404
saving impossible, one must consider the fact that
even if Taylor had been totally successful in his
efforts, he would have saved Bethlehem Iron a total
of only $302.60 (7,490 long tons X .0404). So for the
50 days that the observations lasted, the firm would
have been able to reduce expenses by a mere $6.05
a day! When other companies analyzed the value of
Taylor'sapproach, it is likely that they also realized
that all of this effortwould, at best, produce little (if
any) savings. This calculation was undoubtedly
why there were no large-scale replications of the
study. Taylor told a good tale, but he could not sell
it to senior-level managers who focused on facts
and not anecdotes.
Digital Archiving Is Now Critical
In 1994, two national groups, the Commission on
Preservationand Access and the ResearchLibraries
Group, created the Task Force on Digital Archives.
Since then, this not-for-profit task force has been
extremely active in helping to develop guidelines
for ensuring the successful transfer and protection
of digital material from one generation of computer
technology to another. In particular, the group is
helping archivists organize, preserve, and protect
access to a wide range of stored resources by: (1)
compiling and distributing guidelines, standards,
and best practices for digital preservation, (2) de-
veloping varied means to coordinate digital preser-
vation activities within institutions, and (3) help-
ing to formulate institutional policies for acquiring,
converting, storing, and maintaining digital mate-
rials (Hedstrom & Montgomery, 1998). As these
kinds of efforts continue to make headway, records
such as those used in the current research will be
1290 Academy of ManagementJournal
better protected, and the ability to review and an-
alyze original documentation will be significantly
increased.
THE VALUEOF THE OBSERVATIONSFOR THE
NEW MTTT.ENNIUM
In retrospect, the 1899 pig iron observations are
important because they show that one of the pri-
mary goals of managementhas not changed in over
a century: to reduce costs. At the same time, how-
ever, the observations point out the importance of
researchers being more systematic and sophisti-
cated in their approach to reaching their goals.
Taylor and his associates made copious mistakes,
the most important being that they simplified the
results of their study and glossed over the incon-
sistencies. In the new millennium, where hyper-
competition will rule the day, firms that repeat
Taylor's mistakes will find themselves unable to
compete effectively.
A second and complementary conclusion that
emerges from the reanalysis of Taylor's observa-
tions is that "benchmarking"is going to be a critical
activity in the new millennium. In fact, this ap-
proach, and related strategies, are proving ex-
tremely important in helping organizations main-
tain a competitive stance. If Taylor and his
associates had gone fartherin studying all the ele-
ments influencing pig iron handling, they might
have realized quite clearly that their cost figures
were erroneous. Additionally, they did not get the
workers involved in the process via feedback re-
garding how the work could be done more effi-
ciently. Today many enterprises are sidestepping
this problem by creating empowerment programs.
Admittedly, empowerment was not a concept that
would have been accepted in 1899, but that obser-
vation helps reinforce our point: new methods
must be continually introduced if organizations'
managements hope to increase their productivity
levels.
A third useful point to be derived from the Taylor
studies is that in the new millennium, increased
focus must be given to the scientific collection of
data. Too much of Taylor, Gillespie, and Wolle's
work was limited in scope and value. For example,
the controlled observations that were conducted in
March 1899 and reported in Table 1 did not con-
tribute any substantive value to the study because
the conditions under which each team worked
were significantly different, thus making it impos-
sible to answer key questions like these: What is the
ideal work crew size? How do the working condi-
tions correlate with the amount of output per day?
Is there any difference in the physical characteris-
December
tics of the workers that results in some people
doing more work than others? Even more impor-
tantly, if these work crews continued working for
the entire ten-hour day, what conclusions could
have been drawn regarding how to organize the
crews for maximum efficiency?
A fourth important point is that anecdotal data
are no substitute for quantitative analysis. Modern
organizationspursuing higher-qualityoutputs have
now realized that record keeping, charting, feed-
back, and objective analysis are far more important
than anecdotes. After studying some of America's
most successful corporations, Hodgetts (1998)
found that all of them used quantitative and ongo-
ing measures to determine their quality and perfor-
mance. Anecdotes typically smooth out inconsis-
tencies and lead to misinterpretation of data-and
these actions result in erroneous conclusions. In
the new millennium, managers and scholars will
need to pay far less attention to story telling and far
more to data collection and analysis.
In conclusion, the major reason for examining
the pig iron observations is to reemphasize that
reduced cost has long been and remains a major
goal of management. However, the tools and tech-
niques contemporary organizations must use to
pursue this objective will have to be different from
those of the past. What Taylor did was standard
practice for his day-and the results show that he
really did not accomplish much more than generate
a story that has been retold and refashioned in so
many ways that what the typical management
reader"knows"about what happened at Bethlehem
Iron a century ago is more fiction than fact. In the
new millennium, managers will have to increas-
ingly focus on data collection and analysis and
fight the tendency to accept anecdotes and hearsay
as accurate. In an emerging world of hypercompe-
tition, this lesson could spell the difference be-
tween success and failure.
REFERENCES
Allentown Daily Call. 1899. Microfilm records of
weather conditions. March-April.
George, C. 1972. History of management thought (2nd
ed.) Englewood Cliffs, NJ:Prentice-Hall.
Gillespie, G., &Wolle, H. 1899. Report on the establish-
ment of piecework in connection with the loading
of pig-iron at the works of the Bethlehem Iron Co.,
South Bethlehem, Pennsylvania (compiled June
17). Hoboken, NJ: Frederick W. Taylor Collection,
Stevens Institute.
Hedstrom,M., & Montgomery,S. 1998. Digital preserva-
tion needs and requirements in RLGmember insti-
tutions. http://www.rlg.org/preserv/digpres.html.
2000 Wregeand Hodgetts 1291

Hoagland, J. 1955. Management before Frederick Taylor. Taylor, F. W. 1911. Principles of scientific manage-
Academy of Management Proceedings: 15-24. ment. New York: Harper.
Hobson, T. 1899. The Philadelphia iron market in 1898. Wrege, C., & Greenwood, R. 1998. Frederick W. Taylor's
Iron Age, January 5: 21. "pig iron loading observations" at Bethlehem, March
10, 1899-May 31, 1899: The real story. Canal His-
Hodgetts, R. M. 1998. Measures of quality & high per-
formance. New York: American Management Asso- tory and Technology Proceedings, 17: 189-191.
ciation. Wrege, C., & Perroni, A. 1974. Taylor's pig-tale: A histor-
Iron Age. 1899. March 5: 23. ical analysis of Frederick W. Taylor's pig-iron exper-
iments. Academy of Management Journal, 27:
Marsh, E. R. 1975. The harmonogram of Karol 6-27.
Adamiecki. Academy of Management Journal, 18:
358-364. Wren, D. 1994. The evolution of management thought.
New York: Wiley.
Robert Sayre Diary. Easton, PA: National Canal
Museum Archives.
Charles D. Wrege received his Ph.D. from New York
South Bethlehem Globe. 1898. May 27: 1. Bethlehem,
PA: Archives of the Moravian Church. University. He is the Academy of Management historian
and archivist and the curator of the History of Manage-
Taylor, F. 1898. F. Taylor to R. Davenport, January 3. In ment Theory Collection at Cornell University. His re-
Frederick Taylor's papers. Hoboken, NJ: Frederick search focus is in management history, with particular
W. Taylor Collection, Stevens Institute. emphasis on Frederick W. Taylor.
Taylor, F. 1899. F. Taylor to J. Wharton, March 20. In Richard M. Hodgetts received his Ph.D. from the Univer-
Frederick Taylor's papers. Hoboken, NJ: Frederick
sity of Oklahoma. He is a professor of strategic manage-
W. Taylor Collection, Stevens Institute. ment at Florida International University. His current re-
Taylor, F. W. 1901. Discussion of H. L. Gantt paper. search focuses on strategy in multinational enterprises
American Society of Mechanical Engineers Trans- and the use of high-performance work groups in the
actions, December 5: 119. international arena.