Manufacturing The Future: A History Of Western Electric

Labour & Industry, April, 2000 by Russell Lansbury

Stephen B Adams and Orville R butler, Cambridge and New York, Cambridge University Press, 1999, xi 270pages, $A59.95 (estimated retail price)

For most students of industrial psychology or sociology, the Western Electric Company is synonymous with the `Hawthorne experiments' from the mid 1920s to the mid 1930s. These were a series conducted by Elton Mayo and others at the Hawthorne plant of Western Electric which were, in the words of the authors of this book, `elevated to the position of a modern Rosetta Stone, unlocking the secrets for various fields that study the workplace, from sociology to anthropology'.

The Hawthorne studies only occupy one chapter of the book, but the insights gained from the history of the Western Electric Company provide some fascinating perspectives on the way which they were conducted and why they have proved to be so controversial. Although Western Electric is most strongly associated with the `birth' of the Human Relations schools of industrial sociology/psychology, it could equally claim to have been a pioneer of Scientific Management and the forerunner of the `Quality' movement of the 1980s and 1990s.

Western Electric no longer exists as a corporate entity. In 1996, AT&T announced the spin off of two companies: NCR and Lucent Technologies. The latter company evolved from the Western Electric Company, which acted at AT&T's captive manufacturer for more than 100 years. While this review focuses on that part of the book which deals with the Hawthorne studies, the history of Western Electric is indeed fascinating. On the eve of World War 1, no American company had manufacturing facilities in more countries that Western Electric, yet after AT&T spun-off Western's overseas operations in 1925, Western operated almost exclusively in the United States. Western Electric, however, played a crucial role in the development of American manufacturing, brining transistors into mass production and making commercial applications of lasers, among other activities.

The Hawthorne plant was built on former prairie land in Cicero, Illinois in the early 1900s to satisfy the rapidly growing market for telephones. One of the reasons for moving to this `greenfield site', according to Eros Barton who was President of Western Electric from 1886 to 1908, was that `the Labor Question has come right up against us'. Barton was referring to a strike by Western Electric machinists in the Chicago plant who were seeking recognition of their union. Although the company was eventually forced to accept unions at the Chicago site, the Hawthorne plant was thought to be sufficiently far away from `union agitators and liars' to escape unionisation. By the time the plant was completed in 1913, with 14,000 workers, it ranked alongside Henry Ford's Highland Park as one of the largest industrial sites in the country.

The Hawthorne plant was one of the early examples of mass production where jobs were broken down into parts with no one individual responsible for the entire product. In 1915, the management of Western Electric invited Professor W. D. Scott of Northwestern University (where he later became President) to develop tests to determine the creative ability of engineers. The company was one of the first to be engaged in what was called `the art of human engineering' and, by the early 1920s, Western Electric was conducting psychological tests on a large scale. The company also sought to increase quality by creating statistical `control charts' which plotted output and quality over time.

In 1924, with the support of the National Research Council, the Western Electric Company began a series of experiments to study the impact of changes in lighting levels on the productivity of workers. This was partly because they were seeking to show that workers were just as productive under artificial light as under natural lighting. However, the first two sets of tests showed that increased levels of supervision played a larger role in productivity than levels of illumination. The phrase `Hawthorne effect' came to mean unexpected outcomes from non-experimental variables in the social of behavioural sciences.

Elton Mayo and his colleagues from Harvard arrived on the scene in 1928. Their research focused on group processes. They observed that a group of women who were separated from others in the relay assembly room achieved increased productivity (although these results were not achieved with men!). These women were also paid on the basis of their own output rather than that of the whole department, demonstrating the importance of performance-related pay. Mayo and his colleagues also conducted a large interviewing program over two years Mayo visited the plant several times a year to supervise the research. The authors comment that `Mayo must have felt that he hit the mother lode at Hawthorne, where he received funding from the Rockefeller Foundation and royal treatment from the Western Electric management'.

The legacy of the Hawthorne studies is mixed. As Edward Lawler has noted: `one of the charms of the Western Electric studies is that they seem to provide data to support almost any conclusion about employee behaviour'. Other social scientists, such as the late Alex Carey from UNSW, have been more scathing about the dubious validity of the Hawthorne findings. The management writer and CEO of New Jersey Bell, Chester Barnard, made the interesting claim that, with the Hawthorne studies,: `at last we have something that really is a basis for scientific management'. Or as Jay Lorsch has noted: `when a behavioural scientist tells you about Hawthorne studies'. This book provides some very valuable historical insights into both the Hawthorne plant and the Western Electric Company and should be of considerable interest to industrial relations scholars.