Hostname: page-component-76fb5796d-5g6vh Total loading time: 0 Render date: 2024-04-25T16:03:19.371Z Has data issue: false hasContentIssue false
  • English
  • Français

The History of Progress Functions as a Managerial Technology

Published online by Cambridge University Press:  11 June 2012

John M. Dutton ,
Annie Thomas  and
John E. Butler
John M. Dutton
Affiliation:
John M. Dutton is professor of management at New York University.
Annie Thomas
Affiliation:
Annie Thomas is assistant professor of management at New York University.
John E. Butler
Affiliation:
John E. Butler is instructor of management at New York University.
Get access Rights & Permissions [Opens in a new window]

Abstract

In this article, Professors Dutton, Thomas, and Butler trace the sixty-year history of a major managerial technology—the progress function—from its discovery in post-World War I airplane manufacture to its post-World War II popularity among management consultants. By statistically analyzing the large number of progress function studies, they demonstrate that its investigation has become balkanized by academic discipline, and that applied researchers have frequently ignored the contingencies stressed in the leading theoretical studies. Their article is thus a revealing example of how social scientific concepts get translated into business practice.

Type
Research Article
Information
Business History Review , Volume 58 , Issue 2 , Summer 1984 , pp. 204 - 233
Copyright
Copyright © The President and Fellows of Harvard College 1984

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Dutton, John M. and Starbuck, William H., “Diffusion of an Intellectual Technology,” in Communication and Control in Society, ed., Krippendorf, Klaus (New York, 1979), 491–511Google Scholar; Kimberly, John R., “Managerial Innovation,” in Handbook of Organizational Design, ed. Nystrom, Paul C. and Starbuck, William H. (New York, 1981), 1: 84–104.Google Scholar

2 Uselding, Paul, “Business History and the History of Technology,” Business History Review 54 (Winter 1980): 443–52.CrossRefGoogle Scholar

3 Alchian, Armen, “Reliability of Progress Curves in Airframe Production,” Econometrica 31 (October 1963): 679–93CrossRefGoogle Scholar (see also, Rand Report 260–1, 1950); Asher, Harold, Cost-Quantity Relationships in the Airframe Industry, Rand Report 291 (Santa Monica, 1956)Google Scholar; Conway, R. W. and Schultz, A., “The Manufacturing Progress Function,” Journal of Industrial Engineering 10 (January-February 1959): 39–54Google Scholar; Hirsch, Werner Z., “Manufacturing Progress Functions,” Review of Economics and Statistics 34 (May 1952): 143–55.CrossRefGoogle Scholar

4 John M. Dutton and Annie Thomas, “Progress Functions and Production Dynamics,” working paper, Graduate School of Business Administration, New York University (1982).

5 Boston Consulting Group, Perspectives on Experience (Boston, 1970).Google Scholar

6 Alchian, “Reliability of Progress Curves,” 679–93; Conway and Schultz, “Manufacturing Progress Function,” 39–54; Nadler, J.G. and Smith, W.D., “Manufacturing Progress Functions for Types of Processes,” International Journal of Production Research 12 (June 1963): 115–35.CrossRefGoogle Scholar

7 Arrow, Kenneth J., “The Economic Implications of Learning by Doing,” Review of Economics and Statistics 29 (June 1962): 115–73Google Scholar; Hirsch, “Manufacturing Progress Functions,” 143–55; Wright, Theodore P., “Factors Affecting the Cost of Airplanes,” Journal of Aeronautical Science 3 (February 1936): 122–28.CrossRefGoogle Scholar

8 Marshall, Alfred, Principles of Economics (London, 1922)Google Scholar; Hicks, J.R., Value and Capital (Oxford, 1946).Google Scholar

9 Litterer, John A., “Systematic Management: The Search for Order and Integration,” Business History Review 35 (Winter 1961): 461–76CrossRefGoogle Scholar; Nelson, Daniel, “Scientific Management, Systematic Management and Labor, 1880–1915,” Business History Review 48 (Winter 1974): 479–500CrossRefGoogle Scholar; Taylor, Frederick W., Principles and Methods of Scientific Management (New York, 1911).Google Scholar

10 Abramovitz, Moses, “Resource and Output Trends in the United States Since 1870,” American Economic Review 46 (May 1956): 762–82Google Scholar; Arrow, “Economic Implications,” 155–73; Chenery, H.B. and Clark, P.G., Interindustry Economics (New York, 1959).Google Scholar

11 Boston Consulting Group, Perspectives, Cheney, William F., “Strategic Implications of the Experience Curve Effect for Avionics Acquisitions by the Department of Defense” (Ph.D. diss., Purdue University, 1977).Google Scholar

12 Chandler, Alfred D., Strategy and Structure (Cambridge, Mass., 1962)Google Scholar; Jelinek, Mariann, “Toward Systematic Management: Alexander Hamilton Church,” Business History Review 54 (Spring 1980): 63–79CrossRefGoogle Scholar; Litterer, “Systematic Management,” 461–76; Nelson, “Scientific Management,” 479–500.

13 Johnson, H. Thomas, “Management Accounting in an Early Multidivisional Organization: General Motors in the 1920s,” Business History Review 52 (Winter 1978): 490–517.CrossRefGoogle Scholar

14 Gantt, Henry L., Work, Wages and Profit (New York, 1910)Google Scholar; Gilbreth, Frank, Primer of Scientific Management (New York, 1912)Google Scholar; Jelinek, “Toward Systematic Management,” 63–79; Nelson, “Scientific Management,” 479–500; Taylor, Frederick, Principles and Methods of Scientific Management (New York, 1911)Google Scholar; Turner, Wayne C., Mize, Joe H., and Cuse, Kenneth, Introduction to Industrial and System Engineering (Englewood Cliffs, N.J., 1978).Google Scholar

15 Uselding, “Business History,” 443–52.

16 Sloan, Alfred, My Years With General Motors (New York, 1965).Google Scholar A biography of T.P. Wright can be found in The National Cyclopedia of American Biography, 4:297–98; for a biography of D.R. Berlin see Walter H. Waggoner, “Don R. Berlin, 83, a Designer of Aircraft for World War II,” New York Times, 8 June 1982, p. 131, D20.

17 Mowery, David C. and Rosenberg, Nathan, “Technical Change in the Commercial Aircraft Industry, 1925–1975,” Technological Forecasting and Social Change 20 (1981): 347–58.CrossRefGoogle Scholar

18 Freudenthal, Elizabeth E., The Aviation Business (New York, 1940).Google Scholar

19 Ibid., 32–34.

20 Wright, “Factors Affecting the Cost of Airplanes,” 122–28.

21 Ibid., 122–28.

22 Such simultaneity was the case, for instance, with oxygen, the incandescent electric light bulb, and computer simulation of highway traffic. See Broad, William J., “Rival Centennial Casts New Light on Edison,” Science 204 (6 April 1979): 32–36CrossRefGoogle ScholarPubMed; Dutton and Starbuck, “Diffusion,” 491–511; Hounshell, David A., “Two Paths to the Telephone,” Scientific American 244 (June 1981): 157–63CrossRefGoogle Scholar; Sahal, Devendra, “The Nature and Significance of Technological Cycles,” International Journal of System Science 2 (1980): 985–1000.CrossRefGoogle Scholar

23 Cheney, Strategic Implications, 48.

24 Rohrbach, Adolph, “Economical Production of All-Metal Airplanes and Sea Planes,” Journal of the Society of Automotive Engineers 20 (1927): 57–66.Google Scholar

25 Asher, Cost-Quantity Relationships, 1–14; Cheney, Strategic Implications 44–88; Wooley, Kenneth M., “Experience Curves and Their Use in Planning” (Ph.D. diss., Stanford University, 1972), 29–35.Google Scholar

26 Brief descriptions of the career of Wright are in The National Cyclopedia of American Biography, 4:297–98, and Current Biography (New York, 1965), 694–96.

27 New York Times, 22 August 1970, 23.

28 Uselding, “Business History,” 445.

29 Cleveland, Reginald M. and Graham, Frank P., “Aviation Manufacturing Today in America,” in The History of the American Aircraft Industry, ed., Simonson, G. R. (Cambridge, Mass., 1968), 142–59.Google Scholar

30 Source Book of World War II Basic Data (Wright Field, Dayton, Ohio, 1947).

31 Asher, Cost-Quantity Relationships; Searle, A.D. and Goody, C., “Productivity Changes in Selected Wartime Shipbuilding Programs,” Monthly Labor Review 61 (December 1945): 1132–47.Google Scholar

32 Guibert, P., Le Plan de Fabrication Aeronautique (Paris, 1945).Google Scholar

33 Baloff, Nicholas, “Startups in Machine-Intensive Production Systems,” Journal of Industrial Engineering 27 (January 1966): 25–32Google Scholar; Baloff, Nicholas, “Extensions of the Learning Curve—Some Empirical Results,” Operational Research Quarterly 22 (December 1971): 329–40CrossRefGoogle Scholar; Conway and Schultz, “The Manufacturing Progress Function,” 39–54; Hirsch, “Manufacturing Progress Functions,” 143–55; Nadler and Smith, “Manufacturing Progress Functions,” 115–35; Preston, L.E. and Keachie, E.C., “Cost Functions and Progress Functions: An Integration,” American Economic Review 54 (March 1966): 100–107.Google Scholar

34 Alchian, Annen, “Costs and Outputs,” The Allocation of Economic Resources: Essays in Honor of B.F. Haley, ed., Abramovitz, M., (California, 1959), 23–40Google Scholar; Arrow, “Economic Implications,” 166–70; Hirschleifer, Jack, “The Firm's Cost Function: A Successful Reconstruction?” Journal of Business 35 (July 1962): 235–55.CrossRefGoogle Scholar

35 Black, J., “The Technical Progress Function and the Production Function,” Economica 29 (1962): 166–70CrossRefGoogle Scholar; Preston and Keachie, “Cost Functions and Progress Functions,” 100–107; Oi, Walter Y., “The Neoclassical Foundations of Progress Functions,” Economics Journal 78 (September 1967): 579–94CrossRefGoogle Scholar; Rapping, Leonard, “Learning and World War II Production Functions,” Review of Economics and Statistics 48 (1957): 81–86Google Scholar; Rosen, Sherwin, “Learning by Experience as Joint Production,” Quarterly Journal of Economics 86 (August 1972): 366–82CrossRefGoogle Scholar; Sheshinski, Eytan, “Tests of the ‘Learning By Doing’ Hypothesis,” Review of Economics and Statistics 49 (November 1967): 568–78CrossRefGoogle Scholar; Spence, A.M., “The Learning Curve and Competition,” Bell Journal of Economics 12 (Spring 1981): 49–70.CrossRefGoogle Scholar

36 See, for example, Andress, Frank J., “The Learning Curve as a Production Tool,” Harvard Business Review 32 (January-February 1954): 87–91Google Scholar; Boston Consulting Group, Perspectives; Clark, Stuart, “Applying Learning Curves to the Maintenance Force,” Plant Engineering 21 (1967): 126–27Google Scholar; Greenberg, Leo, “The Measurement of Work-Accident Experience in the American Petroleum Industry,” ASSE Journal 15 (1970): 11–13Google Scholar; Hirschmann, Winfred B., “Profit from the Learning Curve,” Harvard Business Review 42 (January-February 1964): 125–39Google Scholar; Howell, Sidney D., “Learning Curves for New Products,” Industrial Marketing Management 9 (1980): 97–99CrossRefGoogle Scholar; Imhoff, Eugene A., “The Learning Curve and its Applications,” Management Accounting 59 (February 1978): 44–46Google Scholar; Rapp, William V., “Strategy Formulation and International Competition,” Columbia Journal of World Business (Summer 1973): 98–112Google Scholar; Rice, James W., “Throw Prices a Curve!” Purchasing Magazine 69 (1970): 47–49Google Scholar; Yelle, Louis E., “Estimating Learning Curves for Potential Products,” Industrial Marketing Management 5 (1976): 147–54.CrossRefGoogle Scholar

37 See, for example, Conley, Patrick, “Experience Curves as a Planning Tool,” IEEE Spectrum 7 (June 1970): 63–68CrossRefGoogle Scholar; Hirschmann, “Profit from the Learning Curve.”

38 Boston Consulting Group, Perspectives.

39 Nichols, B., Saidman, S., and Saypoff, J., “Management Consulting— A.T. Kearny, Growth Dynamics and The Boston Consulting Group,” unpublished thesis project. Graduate School of Business Administration, New York University (1983).Google Scholar

40 Air Force Guide for Pricing (18 September 1962), ASP 70–1–3.

41 Alchian, “Reliability of Progress Curves,” 679–93; Billon, S.A., “Industrial Learning Curves and Forecasting,” Management International Review 6 (1966): 65–96.Google Scholar

42 See pages 223–29 for more complete definitions of the content of these two types of studies.

43 Nelson, “Scientific Management and Labor,” 479–500.

44 Baloff, “Startups in Machine-Intensive Production Systems,” 25–32; Hirsch, “Manufacturing Progress Functions,” 143–55; Hirsch, Werner Z., “Firm Progress Ratios,” Econometrica 24 (April 1956): 136–43.CrossRefGoogle Scholar

45 Guibert, Le Plan de Fabrication Aeronautique; Wheelon, O.A., “Design of Aircraft Structures for Mass Production,” SAE Quarterly Transactions 3 (July 1949): 480–89.Google Scholar

46 Baloff, Nicholas, “The Learning Curve—Some Controversial Issues,” Journal of Industrial Economics 14 (July 1966): 275–82.CrossRefGoogle Scholar

47 Andress, “The Learning Curve,” 87–97; Hartley, K., “The Learning Curve and Its Applications to the Aircraft Industry,” Journal of Industrial Economics 13 (1965): 122–28CrossRefGoogle Scholar; Hirschmann, “Profit from the Learning Curve,” 125–39.

48 Berghell, A.B., Production Engineering in the Aircraft Industry (New York, 1944).Google Scholar

49 Alchian, “Reliability of Progress Curves,” 679–93; Crawford, J.R. and Strauss, E., Crawford-Strauss Study (Dayton, Ohio, 1947)Google Scholar; Middleton, Kenneth A., “Wartime Productivity Changes in the Airframe Industry,” Monthly Labor Review 61 (August 1945): 215–25.Google Scholar

50 This sample consists of firm-level (process, product, plant, or firm) cost and cumulative-quantity, progress-function data, taken from field studies. Such empirical studies constitute a small fraction of all progress-function studies, many of which use smaller (individual or worker-group learning) or larger (aggregated industry-level) units of analysis.

51 Alchian, “Reliability of Progress Curves,” 679–93; Billon, “Industrial Learning Curves, “65–79; Conway and Schultz, “The Manufacturing Progress Function,” 39–54.

52 See, for example, Abell, D.F. and Hammond, J.S., Strategic Market Planning (Englewood Cliffs, N.J., 1979)Google Scholar, Andress, “The Learning Curve,” 88; Brenneck, Ronald, “B-E Charts Reflecting Learning,” NAA Bulletin 40 (June 1959); 34Google Scholar; Conley, Patrick, “Experience Curves as a Planning Tool,” IEEE Spectrum 7 (June 1970): 63–68CrossRefGoogle Scholar; Hartley, K., “The Learning Curve and its Applications to the Aircraft Industry,” Journal of Industrial Economics 13 (1965): 122–28.CrossRefGoogle Scholar

53 Alchian, “Reliability of Progress Curves,” 679–93; Asher, Cost-Quantity Rehtionships, 1–14; Crawford and Strauss, Crawford-Strauss Study; Middleton, “Wartime Productivity Changes,” 215–25.

54 Conway and Schultz, “The Manufacturing Progress Function,” 41.

55 Ibid., 39–54.

56 Baloff, “The Learning Curve,” 275.

57 Asher, Cost-Quantity Relationships.

58 Hofstadter, Douglas R., “Mathematical Themas,” Scientific American 248 (January 1983): 14–22.CrossRefGoogle Scholar

59 Dunbar, Roger L.M., “Toward An Applied Administrative Science,” Administrative Science Quarterly 27 (March 1983): 129–44.CrossRefGoogle Scholar

60 Dutton and Thomas, Progress Functions and Production Dynamics.

61 Kiechel, Walter III, “The Decline of the Experience Curve,” Fortune (5 October 1981): 139–46.Google Scholar

62 Snow, C.P., The Two Cultures and the Scientific Revolution (New York, 1959)Google Scholar; Uselding, “Business History,” 443–52.

63 Leslie, Stuart W., “Thomas Midley and the Politics of Industrial Research,” Business History Review 54 (Winter 1980): 480–503.CrossRefGoogle Scholar

64 Kiechel, “The Decline of the Experience Curve,” 139–46; Young, S. L., “Misapplications of the Learning Curve Concept,” Journal of Industrial Engineering 17 (August 1966): 410–15.Google Scholar

65 Bruce D. Henderson, “Cross Sectional Experience Curves,” Boston Consulting Group (1978); Abell and Hammond, Strategic Market Planning, Kiechel, “The Decline of the Experience Curve,” 139–46.

66 Dutton and Thomas, Progress Functions and Production Dynamics.

67 Gruber, W.H. and Marquis, D.G., eds., Factors in the Transfer of Technology (Cambridge, Mass., 1969).Google Scholar