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Conventional wisdom holds that the original objectives of management science were to promote economic efficiency and financial returns; the pursuit of goals loftier than moneymaking is seen as a recent development. But this isn’t the full picture. At its roots, the discipline is also closely aligned with current thinking about organizational purpose and managing with a broad community of stakeholders in mind. Today’s conversations about corporate social responsibility are not moving away from the principles of scientific management; they’re returning to them.
Anyone who has studied management will likely have been taught that the field’s founder is the efficiency-obsessed Frederick Winslow Taylor. The notion attributed to Taylor — that economic efficiency is management’s fundamental principle — reigned in the 20th century and into the 21st. Administration expert Luther Gulick wrote in 1937 that for management, “whether public or private, the basic ‘good’ is efficiency.” Management guru Peter Drucker echoed the idea in 1946, stating that “the purpose of the corporation is to be economically efficient.” More recently, management thinker Gary Hamel has perpetuated the view that “management was invented to solve the problem of inefficiency.”
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Over the past century, managers have certainly acted as if their ultimate performance metric were economic productivity, made manifest in common measures like return on investment, earnings per share, and profit margins.
However, our new research highlights that the work of Louis Brandeis preceded Taylor’s. In the early 1900s, Brandeis was an advocate and business adviser who came to be known as “the people’s lawyer.” His view that business should serve a higher social purpose sounds strikingly contemporary. His ideas became popular and found significant audiences among businesses that applied and advocated sustainable work practices.
Brandeis — who would go on to serve as a justice on the U.S. Supreme Court from 1916 to 1939 — was the primary legal counsel for the conservation movement, which was conceived by U.S. President Theodore Roosevelt and adviser Gifford Pinchot at the turn of the 20th century. It was developed to counter the prevailing view that the American dream conferred freedom to take advantage of natural resources for financial gain, whatever the environmental or social costs.
In 1910, as part of the campaign promoting conservation, Brandeis articulated a new approach he termed scientific management (a term often wrongly credited to Taylor). He used it to argue a high-profile lawsuit against a railroad company. The railroad’s near monopoly and constant price increases were harming small businesses, and Brandeis made the case that if it employed scientific management to reduce waste, it could keep prices stable and increase profits in the process. Newspapers celebrated Brandeis as a “legal Hercules” on their front pages. After he won, Brandeis and Roosevelt told the world that scientific management was “a new approach to industry which has conservation as its central motive.”
Importantly, Brandeis’s ideas weren’t just theoretical. He became the world’s best known management consultant after his victory, and several prominent businesses embraced his ideas about what we might today call sustainable work. Brandeis was a consultant to William H. McElwain of Boston, whose shoe company’s sales grew from $75,957 in 1895 to $8,691,274 in 1908, making it one of the largest shoe manufacturers in the world. McElwain tackled the problem of what Brandeis termed the “irregularity in the employment of the shoe worker” due to unforeseen closures that brought “misery to the workers,” who often could not make rent or insurance payments. (Today, we’d call them gig workers.)
As Brandeis put it in a commencement address to Brown University students in 1912, “This irregularity had been accepted by the trade — by manufacturers and workingmen alike — as inevitable. … But with McElwain an evil recognized was a condition to be remedied, and he set his great mind to solving the problem of irregularity of employment in his own factories.” By 1908, deft management meant that “every one of his many thousand employees could find work three hundred and five days in the year.”
Brandeis also advised the William Filene’s Sons department store. In 1912, the business moved into a new building in Boston with more than 9 acres of floor space and 2,000 employees. With Brandeis’s guidance, the company set up new processes for working conditions, as well as social facilities. It established a system of self-government, administered by the Filene Co-operative Association, which gave workers the right to appeal and even veto policies deemed detrimental to their well-being. Employees were granted 15,000 square feet on the eighth floor of the Filene’s store to use for gatherings, clubs, and a library. A system of arbitration was agreed upon, and a minimum-wage scale launched, guaranteeing pay of at least $8 a week — a big improvement for jobs traditionally garnering what Brandeis termed “the lowest rate of wages possible.”
Brandeis wasn’t alone in his early advocacy of businesses pursuing broader social purposes. Pioneering organizational expert Mary Parker Follett wrote about how professional education and a diverse workforce led to greater creativity, earning her speaking invitations from the London School of Economics. Businessperson Charles Clinton Spaulding, who led the North Carolina Mutual Life Insurance Company, part of Durham, North Carolina’s Black Wall Street, promoted cooperative approaches with employees as he built the largest Black-owned business in the U.S. Both should be seen as management pioneers but are largely absent from curricula. Even the founding father of economics, Adam Smith, wrote that social well-being and opportunities for the disadvantaged were the ultimate purpose of good management. (Read Book V of The Wealth of Nations.)
Recalibrating how we understand the history of this field and seeing Brandeis and figures like Follett and Spaulding as the discipline’s cofounders enables us to see sustainable management and the idea that businesses should advance social goods not as modern trends but as fundamental practice.
Brandeis wasn’t against greater economic or financial gain (nor were Follett, Spaulding, or Smith). He just thought that they should not be ends in themselves. Economic efficiency must be a means to other ends: a more balanced existence through improved leisure, greater social connections, and time spent in nature, as well as collective well-being and better civic engagement. Brandeis advocated for ethical supply chains, stating that a retailer should know “whether the goods which he sold were manufactured under conditions which were fair to the workers — fair as to wages, hours of work, and sanitary conditions.” He based his management advice to the Filenes, McElwain, and countless others on the idea that businesses are engines of progress and their goal should be to facilitate the development of better citizens, because better citizens built better communities.
So the next time you consider how your organization’s performance should be measured and want to incorporate metrics of success other than economic efficiency and financial ratios, know that you are not pushing against the weight of management’s past. New perspectives on the history of management have your back and contain many inspirational examples of how we might build better ways of managing for the future.