ABSTRACT
The Industrial Revolution, beginning in the late eighteenth century, created significant changes in technology, organization, and the society as a whole. Steam power, supported by fuels such as coal, influenced the invention and implementation of new technologies. This ushered in an era of a production economy in which a single powerful idea resulted in gigantic industries and huge enterprises that thrived on scale. In the scale economy, efficiency was very important, and managers had to focus on getting the conveyor belt moving in the most optimal fashion. Strict time records were kept, and wages were only functions of duration of work or production. The contract between the employee and owner was simple-wages for time worked or goods produced. Measurement was reasonably straightforward-recorded time on punched cards or paper or a count of produced units of goods. This was sufficient to execute the wages part of the contract. Work was characterized as a commodity product-a substitute could be found with relative ease. This was an era of determinism. Many of the skills of the scale economy manager-a strict adherence to rules, error-free record keeping, and the handling of money-were different from the skills of a production worker. These skills made the manager less of a commodity. This is the beginning of the skills-based class structure in large enterprises. When the owner noticed such a difference (as did the manager), the contract between them became a bit more complicated than the worker-owner contract.
