Control Through Communication: The Rise of System in American Management

Citation: JoAnne Yates (1989) Control Through Communication: The Rise of System in American Management.
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Tagged: Sociology (RSS) Communications (RSS), Management (RSS), Illinois Central (RSS), DuPont (RSS), Information Systems (RSS), NatematiasGenerals (RSS)

Summary

In Control Through Communication JoAnne Yates documents the transformation of the US economy from small businesses to large corporations by investigating changes in the communications systems they adopted. Yates argues that philosophies of systematic management that unfolded from the 1850s to the 1920s adopted communications technologies to manage efficiency within firms. Over time, Yates argues, these impersonal systems created morale problems that were addressed through communications systems that were designed to repersonalize some parts of work life.

Yates presents this argument by asking "how and why did formal internal communications become the principal tool for managerial control, displacing the traditional, ad hoc methods of management?" To answer this question, Yates draws from printed and archival sources from 1850 to 1920. The first half of the book outlines the development of "functions, technologies, and genres of internal communication" in conjunction with developments in management philosophies. The second half of the book presents three case studies that show this interrelation in action: the Illinois Central Railroad, Scovill Manufacturing Company, and E.I. du Pont de Nemours & Company.

Chapter 1: Managerial Methods and the Functions of Internal Communication

Yates opens up by arguing that systematic management brought two "lines of development" into firms: rational, impersonal management systems, and a subsequent set of "humanizing efforts" that supplemented these eystems:

During this period of change, experience soon showed that the ad hoc managerial methods that had worked satisfactorily for small, owner-managed firmed in a less competitive environment were inadequate for larger firms run by managerial hierarchies and competing in expanding markets. The philosophy of management that evolved in response to new needs, later to be labeled systematic management, promoted rational and impersonal systems in preference to personal and idiosyncratic leadership for maintaining efficiency in a firm's operations. This general philosophy spawned many specific techniques and movements, including its most famous offspring, the scientific management movement. Systematic management attempted to improve control over–and thus the efficiency of–managers, workers, materials, and production processes. In teh early years of the twentieth century, it became clear that reliance on impersonal systems contributed to morale problems among workers and managers. Attempts to repersonalize certain aspects of work life, such as the paternalistic corporate welfare movement, arose to supplement systematic management. (page 1)

Yates argues, in contrast with Chandler, that the growing scale of US industry had an indirect rather than a direct role in shaping developments in corporate communication systems (recordkeeping, messages, etc), an influence that was mediated by the management philosophies of the time (e.g. scientific management and other movements).

In this chapter, Yates compares the management philosophies and communications technologies of four moments in US businesses: before the late 19th century, the development of railroad management, the emergence of systematic management, and the shift to re-personalize management.

Early Manufacturing Firms

Yates argues that before the late 19th century, manufacturing was managed in an ad hoc way by a small number of owners, skilled artisans, and foremen. Communications and information systems were limited to ledgers of transactions and trade correspondence. Even factories worked on this method, relying heavily on the leadership of foremen who managed and were managed via word of mouth. The most sophisticated mills shared monthly accounting ledgers.

Railroads: Innovators in Management and Communication

Yates argues that "it was the railroads, not the factories, that led the way in both managerial methods and formal internal communication." This occurred for several reasons:

• railroads had multiple owners, which necessitated consistent financial and operational reporting
• "the physical characteristics of railroads had inherent implications for management and communication at lower levels," especially around coordinating trains and managing the risks of derailment and collision. These pressures became greater after a series of collisions in the 1840s, after which train operators moved to control train schedules and recordkeeping on maintenance and track conditions.
• the need for efficiency, as the train industry began operating at a scale where small efficiencies could introduce substantial profits. This movement began in 1856 with Daniel C. McCallum's tenure at the New York and Erie Railroad Company, who argued that (a) each position should have clear responsibilities within a hierarchy, and that (b) a system of reports and checks should travel the hierarchy to better enable managers to monitor and evaluate the efficiency of the company. Yates credits McCallum with the idea of "upward communication as a managerial tool," that adopted "monthly, weekly, daily, and even hourly reports" to make the company, in McCallum's terms, "efficient and successful." These principles were later formalized by Henry Varnum Poor into principles of the "science of management": organization, communication, and information.

Yates quotes Chandler: "For the middle and top managers, control through statistics quickly became both a science and an art. This need for accurate information led to the devising of improved methods for collecting, collating, and analyzing a wide variety of data generated by the day-to-day operations of the enterprise." (Visible Hand p109 quoted in Yates, p8).

Systematic Management: Control Through Communication

Yates argues that as manufacturing became larger, more mechanical, and more complex, starting in the 1870s, managers turned to methods from the railroads to coordinate the work. Quoting Litterer Yates describes this "systematic management" as an attempt to "eliminate confusion, oversight and neglect; coordinate efforts, return firm control to the top people in the organization; accomplish these things through the use of standardized procedures on routing managerial work through 'Method' or 'System.'" (Litterer p473-474 qted in Yates p10). Yates differentiates this "systematic management" from "scientific management," which was focused "primarily on the factory floor" and "efficient production," and which was just one part of a wider effort to systematize management "at all levels of the organization." Yates refers to Jelinek's summary of the characteristics of systematic management (p10-11):

• "transcending the individual" by creating well-defined roles and responsibilities that are carefully documented, and which take away the autonomy of the individual (downward communication)
• "monitoring and evaluating performance" (upward communication) to inform manager decisions

Yates quotes Alexander Hamilton Church (via Litterer's article about him), who attempted to make management itself a science (Yates 13):

The object of the commercial, or, as it might also be termed, the administrative organization scheme, should be to collect knowledge of what is going forward, not merely qualitatively, but quantitatively: It should also provide the means of regulating, as well as the means of recording.

Methods for doing so included cost accounting, production control systems, and inventory management systems. Yates also documents other areas of business where systematic management became common, including sales, purchasing, R&D, and communications between units in a company, even as "System, efficiency, and scientific became catchwords in the business world and beyond."

Repersonalizing Management: Indirect Control Through Communication

Yates points out that "workers and managers... frequently resented and resisted the substitution of impersonal systems for personal relations." Yates argus that the response to this was the "corporate welfare movement" of "clubhouses, libraries, healthcare, and beautification programs" (p16). Workers rebelled against the experience of being managed so closely, and companies introduced benefits to try to placate them. Yates also argues that companies began to choose "indirect" forms of control through communication via company newspapers and "representative shop committees" that offered "a forum for two-way communication and negotiation between workers and management" (p17-18).

Managers also resisted control of the management process, says Yates. To address this unrest, "shop conferences" brought together multiple levels management to discuss problems, suggest improvements, and encourage the cooperation of people at lower levels of management. Yates cites an article in Factory 18 (Jan 1917) that argues:

The primary idea is to enlist the cooperation of the [fore]men in the shop in forming plans and offering suggestions for the good of the company... In its method this system is the opposite of the military method of management. The committee system is especially well adapted to furnishing a means by which the discontented can give expression to their feelings, and affords a valuable aid to the management in locating the cause of any disaffection.... it provides a method of overseeing whereby an executive totally ignorant of shop and sales processes is provided with reliable data concerning any weak spot

Yates points out that arguments like this claim "both a democratizing and a controlling role for such committee meetings."

Yates concludes the argument by emphasizing that systematic management of the impersonal and personalized versions relied on "flows of documents [which] were primary mechanisms of management control" (p20)

Chapter 2: Communication Technology and the Growth of Internal Communication

Yates argues that communications technologies co-evolved with management philosophies that responded to the growth of corporations. She also argues that "these innovations did not cause the internal communication system to develop as it did." Instead, many of these pre-existing technologies enabled the application of new management philosophies within firms.

Yates starts with the role of the telegraph in internal company communications across distances, from the first (scandalous) effort to send orders via telegraph in 1851, superintendent of the Erie railroad, to the routine monitoring of track conditions and management of schedules by the mid-1850s. By 1856, the Erie Railroad was collecting hourly data on the performance of the train system, data that was "recorded on special forms and filed for later use by management" (24). By the 1880s, the meat packing industry had been transformed by the introduction of refrigerated rail cars, managed by telegraphic systems that monitored supply and demand to route meat to customers with a minimum of spoilage (25).

Next, Yates considers the use of written communications, focusing on the use of copying technologies for outgoing communications and filing systems for managing incoming correspondence. Although visually iconic, pigeonhole desks were soon replaced with "flat filing," boxes that held and organized large numbers of unbound letters. These were soon replaced with cabinets of flat files, precursors to the contemporary vertical filing cabinet.

But the efficiency of handwritten communications could only be improved so far. When Remington began to produce typewriters in 1874, the company was thinking of court reporters rather than business users. Then the business world discovered the typewriter, and Remington and its main competitor sold eight thousand machines from 1881 and 1884. Scientific American estimated by 1886 that fifty thousand typewriters had been sold(41). By 1890, 33,000 people worked as stenographers and typists. Many of them were women.

Yates charts developments in document reproduction that ran parallel to the typewriter, including the adoption of previously-developed "carbon paper" to typewriters that could now produce carbon copies automatically. Yates cites a Taft Commission study in 1906 that preferred carbon copies to press copies for their permanency, authenticity of the copy, economy, and adaptability. Furthermore, carbon copying could produce as many as 10 copies for distribution to multiple parties, rather than Press copyging's two. But carbon copying didn't satisfy the full need for "mass duplication of internal communication" – an idea pursued through photographic techniques, Edison's Electric Pen, and the mimeograph (53).

With all this paper came new technologies for filing, most notably the vertical filing system, which adopted practices from the Dewey Decimal System of 1876 (56). Vertical files offered more efficient use of space while also allowing random access of files. Along with these file systems came organizational schemes for managing the organization of flows of information(57-61). Yates argues that "vertical filing systems organized by intended use rather than by origin and chronology allowed companies to create an accessible corporate memory to supplement or supersede individual memories" (62).

Yates concludes by remarking on the overall outcome of these developments: "Without these new technologies, systematic management's dependence on exctensive written communications might have imposed costs too heavy to be worth the resulting savings. Different methods might have been developed to manage the large companies. With these technologies, many avenues of control through communication were opened up" (64).

Chapter 3: Genres of Internal Communication

In this chapter, Yates outlines the genres of internal communications, whether they were "downward communication developed to aid executives in imposing system on people and processes," forms, reports, tables, and graphs for upward communications, or managerial meetings that "evolved to formalize and document multidirectional oral communication needed to ensure cooperation and maintain morale" (65-66).

Downward communication genres include:

• Circular letters and general orders that shared announcements and communicated corporate policy, sometimes posted publicly
• Manuals, which embodied a "comprehensive organizational memory," establishing lines of authority
• Notes and forms for specific orders
• In house magazines, influenced by the corporate welfare movement. "In-house magazines attempted to humanize the workplace through their content and approach." These magazines featured high-performing employees and shared information on employee clubs and activities (75)

Upward reporting systems included routine reports and information about special problems or needs. Yates traces teh development of reporting systems through the history of the railroad system and beyond. Genres included

• Tables and forms, which allowed efficient sharing of information (they have checkboxes!) Magazines including System and Factory, and Industrial Management often included examples of forms to give managers ideas.
• Graphs for effective display of data. In 1914, Willard C. Brinton published a book on business graphics. Graphs increased the efficiency of business managers' ability to process information and make decisions. Since they could also distort; Brinton worked on graphics standards for information visualization.
• Efficient prose reports. This is the origin of common business report and proposal formats (91-94)

Yates shows how needs for horizontal correspondence gave birth of the memo (95).

Manager meetings and shop conferences offered an alternative to these information systems, and they developed their own genres. In 1916, Factory Magazine published results of a survey sent to 25 executives that reported two kinds of shop conferences: "good will" and "supervision conferences" ("Getting More out of Shop Conferences" qtd in Yates p98). Good will conferences focused on developing team spirit and distributing advice. Supervision conferences brought together managers on a regular basis to discuss work, solve problems, and agree on tasks.

Throughout this chapter, Yates argues that even as companies pressed for efficiency through impersonal, vertical communications, horizontal systems of communication were adopted to re-introduce a personal element with the aims of sustaining efficiency.

Chapter 8: Du Pont, 1902-1920: Radical Change from a New Generation

(this chapter includes a discussion of emerging recordkeeping & communication needs of R&D and experimental research)

Notable Citations

• Chandler Jr, A. D. (1977). The Visible Hand: The Managerial Revolution in American Business. Harvard University Press.
• Chandler, A. D. (1962). Strategy and Structure: Chapters in the History of the Industrial Enterprise MIT Press.
• Litterer, J. A. (1961). Systematic management: The search for order and integration. Business History Review, 35(04), 461-476.
• Jelinek, M. (1980). Toward systematic management: alexander hamilton church. Business History Review, 54(01), 63-79.
• Haber, S. (1964). Efficiency and uplift: Scientific management in the progressive era 1890-1920. University of Chicago Press.
• Nelson, D. (1982). The company union movement, 1900–1937: A reexamination. Business History Review, 56(03), 335–357.

Theoretical and Practical Relevance

Control Through Communication is a classic work in management studies, communications, and information science. The book offers a powerful model for examining sociotechnical systems in their intellectual and institutional contexts. Yate's approach of imagining data as communications within an economic system of power offers a valuable perspective for any research on sociotechnical systems.