Abstract
In order to evaluate the impact of the inside contract system in the process on the evolution of factory management, this paper adopts the technology-organization approach. The type of organization developed by the early textile mills remainded satisfactory in the mechanical industries (textile, meat-packing, flouer-milling) and the refining and distilling (cottonseed oil, petroleum, beer, whisky). In the case of these industries, the adoption of the new continuous-process machinery and improved plant design had a profound effect on increasing output. They had much less impact on the modern factory organization. On the other hand, the metal-making and metal-working industries were faced with many managerial difficulties toward mass-production. Gang-work and separated plant lay-out impeded the coordination of flow through several processes of production. The inside contract system was the first organizational response to attain the high-volume throughput in these factories.
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