American Management Association Is Established Summary

  • Last updated on November 10, 2022

The founding of the American Management Association was a milestone in efforts to professionalize management and in the ascendancy of a conservative position on personnel relations.

Summary of Event

On March 14, 1923, the members of the National Personnel Association National Personnel Association convened in New York City to discuss broadening that organization’s membership. The board of directors recognized that managers outside personnel departments were coping with personnel issues on a daily basis and clearly were qualified to join personnel managers in an expanded national association. At the same time, the establishment of such an organization would mark an important step in the development of a professional reputation for managers. The American Management Association (AMA) grew out of this decision. American Management Association Business;management Management;professionalization Personnel management [kw]American Management Association Is Established (Mar. 14, 1923) [kw]Management Association Is Established, American (Mar. 14, 1923) American Management Association Business;management Management;professionalization Personnel management [g]United States;Mar. 14, 1923: American Management Association Is Established[05800] [c]Business and labor;Mar. 14, 1923: American Management Association Is Established[05800] [c]Organizations and institutions;Mar. 14, 1923: American Management Association Is Established[05800] Bloomfield, Meyer Hicks, Clarence J. Lewisohn, Sam A. Sloan, Alfred P.

The roots of the AMA stretch back to a series of organizational efforts by groups concerned with personnel issues and dedicated to achieving a recognized standing in the business community. The National Association of Corporate Training National Association of Corporate Training (NACT), the Industrial Relations Association of America Industrial Relations Association of America (IRAA), and the Special Conference Committee Special Conference Committee (SCC) played central roles in the events leading to the formation of the AMA.

The NACT and the IRAA each traced its origins to some aspect of personnel matters. The NACT arose out of the dissatisfaction of many in the corporate world over the lack of appropriate training in public schools, which no longer provided industry with workers who were able to meet the demands of a competitive society. In response, corporations initiated their own educational programs and called for more market-oriented training in the public schools.

The vocational movement grew directly from this dissatisfaction with inadequately trained workers. It concentrated on testing and counseling workers in an effort to identify their abilities and then match these with appropriate jobs in industry. By 1915, proponents of manual training had established the National Vocational Conference National Vocational Conference (NVC), which was headed by Meyer Bloomfield, a social worker with a law degree who had long participated in the personnel movement.

In his capacity as president of the NVC, Bloomfield sponsored a major conference on personnel management in 1917, during which participants established a committee charged with setting up a national organization of employment managers. In 1918, a subsequent national conference launched the National Association of Employment Managers. National Association of Employment Managers It brought together local organizations such as the Boston Employment Association, founded by Bloomfield, and gave the field of personnel management an increasingly professional cast. In 1919, this group renamed itself the Industrial Relations Association of America.

Members of the SCC engineered the merger of the IRAA and the NACT. The SCC also had grown out of personnel issues. Its founder, Clarence J. Hicks, had created the employee representation plan for John D. Rockefeller’s Colorado Fuel. That plan established a mechanism through which employees could express their grievances and simultaneously gave personnel managers some sense of the workers’ daily concerns. Hicks also developed one of the most expansive benefits programs of the time and a personnel department with substantial powers for Rockefeller’s Standard Oil of New Jersey. He designed the department specifically to improve and sustain productive employer-employee relationships. He brought these notions to the SCC, the members of which considered company unions and welfare work to be fundamental in their promotion of personnel management.

SCC members served on the boards of the IRAA and the NACT, and thus assumed critical roles in the founding of the National Personnel Association. The members of this organization hoped to gain the authority in employee relations that engineers and line managers had achieved over production workers, both skilled and unskilled.

The SCC’s influence persisted in the AMA. For the most part, those who joined the AMA came from large companies (such as Standard Oil, Westinghouse, and Du Pont) that had the resources to sustain personnel departments. Adopting the SCC philosophy, the AMA pinpointed human relations as its main area of concern. Sam A. Lewisohn, the AMA’s president, noted that labor relations among company officials had generated little attention from the business community, a neglect the AMA intended to remedy. The AMA united the various strands of the personnel movement, from company union and welfare work to vocational training.

The AMA’s journal, the American Management Review, American Management Review (journal) energetically promoted human relations as an essential ingredient in industrial success. First published in April, 1923, the journal gained increasing notoriety by featuring individual and industry opinions on the issues affecting employee relations. It raised important topics ranging from declining productivity to the fragility of the work ethic. The American Management Review also continued the debate on educational training of workers to improve their productivity and ensure their loyalty to their companies.

The AMA reinforced its professional orientation by cosponsoring, with the educational director of the American Telephone and Telegraph Company, a series of conferences on engineering education. The AMA hoped to promote management instruction in the country’s leading engineering schools. Scores of universities introduced courses and full-scale programs in business administration during the 1920’s, a definite sign of the maturing of management as a professional career. The AMA also maintained relations with the American Council on Higher Education, which was founded during World War I to handle wartime activities in four-year institutions and continued as a permanent body determined to make institutions of higher education more amenable to cooperation with industry.

Business leaders in the 1920’s also contributed to this increasingly professional image of personnel management. Many had performed years of public service before joining the ranks of business, an experience that gave them a self-perception as professionals. Other figures in the business community, including Alfred P. Sloan of General Motors, actually had participated in educational training in management skills as they prepared for careers in business. They argued that managers must broaden their concerns from satisfying investors to cooperating with workers, the public, and customers. Few considered themselves to be solely managers of private enterprises; most believed that their positions made them trustees of the public welfare. By the 1930’s, the AMA, its journal, and the efforts of managers had imbued management with the professional character it had so desperately sought.

Significance

The formation of the AMA marked the ascendancy of the conservative philosophy of personnel management. The founders of the AMA and their allies among those in personnel management refused to endorse the independent position that personnel departments had achieved during World War I. They urged the restriction of the capacity of personnel departments to interfere with line organizations. The AMA stated that production workers remained well outside the authority of the personnel department, which had only the capacity to serve in a consulting, rather than an active, role in matters relating to the line.

World War I had created labor market conditions that encouraged the promotion of personnel departments. Labor shortages and government demands for nonstop production forced company officials to seek the aid of personnel managers in confronting an increasingly aggressive workforce. Absences, tardiness, and other signs of worker unrest had become far more common. The threat of strikes and demands for collective bargaining punctuated negotiations between capital and labor. The federal government in fact endorsed collective bargaining to prevent work stoppages that could endanger the production of materials needed for the war effort.

Personnel departments flourished in this new environment, because their skills accommodated the needs of both employers and employees. This newfound opportunity enabled personnel managers and their departments to carve out an independent niche in corporate enterprise and achieve a standing on a par with the line organization. Proponents of personnel management established highly centralized personnel departments that seized the powers of line supervisors in the area of employee relations. The federal government contributed to this development by ordering all companies with which it carried on extensive business operations to adopt many of the personnel measures that had proven effective in stabilizing workforces. In an unexpected move, supporters of the late Frederick Winslow Taylor, the best-known advocate of scientific management, acknowledged the importance of worker morale, a point stressed by personnel managers. Taylor saw workers as cogs in the production process and rarely discussed the wants and needs of the individual employee.

The war nurtured the personnel movement, but the end of hostilities presaged a series of setbacks to personnel department enthusiasts. The inevitable labor surplus and an economic depression in 1921-1922 reduced the overflow of jobs typical of the wartime years. In the face of this reversal, enhanced by the intense mechanization of the 1920’s, companies sought a return to prewar labor conditions. Control over wages and decisions to hire and fire, among other powers, returned to the shop floor. Individual supervisors in these decentralized systems were freed from interference in their daily management of workers by those in the personnel department. A declaration presented at the first meeting of the AMA expressed the view that personnel managers could only advise those in line departments. Supervisors had regained their lost autonomy. Members of the AMA declared that in the past, personnel departments had vastly overstepped their limits by interfering in line organizations on matters such as disciplining workers.

The antipathy of the SCC toward trade unions and their negotiators also carried over into the AMA. Giants in the SCC such as Standard Oil of New Jersey had long harbored strident opposition to trade unions and collective bargaining, opposition that the war had forced them to suspend. The traditional negative view of such activities reemerged with a vengeance as corporations backed off from their cooperative position. This view clashed with the position of liberals among personnel managers who advocated strict neutrality on the issue of union organizing and urged this perspective on the national association. The position of the conservative, practical manager dovetailed with the widespread probusiness attitude of American society during the 1920’s.

Despite this position, the legacy of SCC attitudes toward company unions and welfare work, in addition to notions inherited from vocational guidance groups that joined the AMA, blunted the worst characteristics of line autonomy. Training programs designed to make line supervisors more sensitive to employees’ interests appeared throughout the decade. Company unions also placed restraints on authority by providing grievance outlets for workers.

The pro-union laws of the New Deal and the resurgence of independent worker organizations forced a sudden shift in these positions. Strikes, labor unrest, and government intrusion revived many of the labor market conditions that had been pervasive during World War I. Companies turned to dynamic personnel managers for solutions in dealing with a defiant workforce, and personnel departments began to recover their independence and to exercise authority equal to that held by the line and other departments in the corporation. Personnel managers also engineered the return of standardized employment procedures, which replaced the idiosyncratic and unpredictable methods of line supervisors. This shift in authority significantly enhanced the power of the personnel department over employees in production while correspondingly diminishing that of the line supervisors. Line forepersons reluctantly surrendered their voice in employee evaluation, wage determination, recruiting procedures, and even employee dismissal as personnel departments eagerly assumed control over these matters.

These trends intensified during World War II, when worker shortages and government intrusion reminiscent of the 1917-1919 period reappeared in the labor markets. In the midst of this turbulence, the AMA continued to serve as an outlet for managers’ discussion of the renewed threat of unions and the constant battle for control of the workplace. By the 1940’s, the more pragmatic and conservative element in the AMA, after years of interaction with the liberal wing, had adopted many of the liberals’ sophisticated methods of personnel management to deal with a more independent and hostile workforce. The association, through its journal and other publications, provided effective indicators of the diversity of thought and attitudes among corporate managers during these decades. American Management Association Business;management Management;professionalization Personnel management

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Bernstein, Irving. The Lean Years: A History of the American Worker, 1920-1933. 1960. Reprint. New York: Da Capo Press, 1983. Chapter 3 contains an effective discussion of key issues such as company unions and welfare capitalism. Includes an insightful discussion of the personnel management movement during the 1920’s and the relative lack of experience company officials had in dealing with personnel issues. Examines the motivation of managers to reduce the power of the foreperson in the workplace.
  • citation-type="booksimple"

    xlink:type="simple">Commons, John R., ed. History of Labor in the United States, 1896-1932. Vol. 3 in History of Labor in the United States. New York: Macmillan, 1935. Chapter 16 briefly describes scientific management and rationalization. Chapter 17 focuses on personnel management, including the AMA and the attitudes of those involved in the association.
  • citation-type="booksimple"

    xlink:type="simple">Eilbert, Henry. “The Development of Personnel Management in the United States.” Business History Review 33 (Autumn, 1959): 345-364. Reviews the beginnings of personnel management in the early twentieth century. Explains the roles of welfare work, vocational guidance, and scientific management in the evolution of personnel management. Discusses the importance of World War I in shaping personnel management and the relationship between personnel managers and line supervisors.
  • citation-type="booksimple"

    xlink:type="simple">Harris, Howell John. The Right to Manage: Industrial Relations Policies of American Business in the 1940s. Madison: University of Wisconsin Press, 1982. Opening chapter provides a concise description of the personnel movement from its inception through 1940. Relies on AMA publications and the American Management Review for source material and reveals much about management attitudes.
  • citation-type="booksimple"

    xlink:type="simple">Heald, Morrell. The Social Responsibilities of Business: Company and Community, 1900-1960. 1970. Reprint. New Brunswick, N.J.: Transaction, 2005. Chapter 3 focuses on managerial leadership and includes descriptions of the American Management Association and the debates in the American Management Review. Also contains a discussion of professionalism and business education.
  • citation-type="booksimple"

    xlink:type="simple">Jacoby, Sanford. Employing Bureaucracy: Managers, Unions, and the Transformation of Work in the Twentieth Century. Rev. ed. Mahwah, N.J.: Lawrence Erlbaum, 2004. Comprehensive and insightful discussion of the personnel movement and the place of the AMA in its development. Covers a number of key themes, including welfare work, vocational guidance, and attitudes toward personnel management. Provides illuminating analysis of the tensions among personnel managers concerning their place in the corporation.
  • citation-type="booksimple"

    xlink:type="simple">Nelson, Daniel. “The Company Union Movement, 1900-1937: A Reexamination.” Business History Review 56 (Autumn, 1982): 335-357. Offers effective analysis of the growth and expansion of company unions and explanation of why these organizations prosper or fail. Provides particularly useful information on the role of Clarence J. Hicks in this movement.
  • citation-type="booksimple"

    xlink:type="simple">Noble, David F. America by Design: Science, Technology, and the Rise of Corporate Capitalism. New York: Alfred A. Knopf, 1977. Critical and provocative account of the impact of corporations uses science as a centerpiece in production. Includes a discussion of corporate educational efforts, the impact of World War I, and ties between management and higher education.
  • citation-type="booksimple"

    xlink:type="simple">Pusateri, C. Joseph. A History of American Business. 2d ed. Arlington Heights, Ill.: Harlan Davidson, 1988. Chapter 13 contains a broad and important discussion of the rise of corporate administration in the twentieth century. Places the AMA and the efforts to professionalize management in this broader context.
  • citation-type="booksimple"

    xlink:type="simple">Stone, Florence. “AMA: Building Management Excellence for Eighty Years.” MWorld (Fall, 2003): 74-81. History of the AMA from the organization’s own viewpoint and in one of its own publications. Includes illustrations and time line.
  • citation-type="booksimple"

    xlink:type="simple">Wood, Norman J. “Industrial Relations Policies of American Management, 1900-1933.” Business History Review 34 (Winter, 1960): 403-420. Discusses the characteristics of three periods: 1900-1916, 1917-1919, and 1920-1933. Themes include scientific management, industrial safety, and welfare work in the first time frame, the professionalization of personnel management in the second, and the expansion of the personnel department’s responsibilities into areas such as employee health programs in the third.

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