Marconi, the Italian genius who knew how to do business

The figure of Guglielmo Marconi gives us a precious example of inspiring worth and power: a business model which is relevant more than ever, based on courage, magnanimity, the desire to create, the powerful ability to see and evoke the future and, especially, on that kingly ingredient, that unfortunately gets rarer and rarer: ideas.

 

Marco Lisi

There was a man who in 1899, at only twenty five years old, founded the “Wireless Telegraph and Signal Company” (which would become the Marconi Company); who in the same year established the “Marconi Wireless Telegraph Company of America” in the US (which would become known as the “Radio Corporation of America” or RCA); who in 1922, after making the first broadcast transmission in history from the Vatican City, founded the “British Broadcasting Company” (becoming the “British Broadcasting Corporation” over the years and universally known as the BBC) and who in 1926 set the scene for the first global radio-telecommunications network, the “Imperial Wireless Chain” (which went on to merge with “Cable & Wireless”). In 1909, this same man received the Nobel Prize for Physics when only thirty five years old and was honoured throughout his life with numerous acknowledgements by States, monarchs and scientific and cultural associations. When he died in Rome in 1937 he was granted a unique tribute never to be repeated: all the stations of the world observed silence for two minutes, leaving the Earth “muted, thinking about the final hours of this man of destiny”. The name of this genial scientist who also knew how to be a visionary and daring businessman: Guglielmo Marconi.

Marconi, the “Father of wireless telegraphy”, was strongly convinced that electromagnetic (or Hertzian) waves could be employed for practical and essential uses to serve humanity. This conviction, together with his excellent skills as an experimenter and an engineer with natural intuitive attributes combined with his determination to succeed, made him the man who “by magic” took Hertzian waves out of the laboratory and into everyday lives and applications; a real “businessman”, who knew how to make science and its applications serve humanity.

The first experiments of the very young Marconi are still legendary: for example radio communication at a distance of almost three kilometres, in the summer of 1895, at his father’s villa of Pontecchio, which was confirmed by his older brother Alfonso with the fateful gun shot. Unfortunately the first exciting experience was followed by disillusions when facing crude reality. No one, except Marconi’s Irish mother (Annie Jameson, daughter of the owner of the now famous whiskey distillery), seemed to understand the potential of those experiments. A demonstration was organised in Rome with the hope of attracting financial backing from the Postal and Telegraph Service of the Italian government. However, the small-minded bureaucratic mentality, then as now, prevented politicians from seeing the signs of genius and progress in the ideas of that young twenty-two year old. “Our telegraph works,” stated the Italian minister of communications. “Why do we need a wireless telegraph?”

And so Marconi, just like many other Italian geniuses before and after him, decided to go abroad. In 1896, Marconi went to England and on 2 June filed a claim for the first patent for a wireless telegraph which used Hertzian waves. Marconi was presented to the head engineer of the British Post Office, who, in addition to providing him with the means for experiments and demonstrations, put an assistant, George Kemp, at his disposal, who would serve him faithfully for the rest of his life.

The demonstration held on Salisbury Plain with the members of the Armed Forces led to a close cooperation between Marconi and Captain Jackson of the Royal Navy; the latter (who later became Admiral Jackson, Commander of the Royal Navy, during the First World War) saw the huge benefits that wireless telegraphy could give the British fleet. The following year, Marconi made an over-sea connection across the Bristol Channel (a distance of 14 km); later in the year, he did so with a ship, at a greater distance.

Marconi, the businessman

With the continuously increasing communication distances (a few months after a distance exceeding fifty kilometres between Bath and Salisbury was accomplished), the time had come to start to develop Marconi’s apparatus commercially. With this in mind, the Wireless Telegraph and Signal Company Ltd was founded on 20 July 1891. The establishment of the company was entrusted to an Irish cousin, Jameson Davis, who became its first director. The company had a capital of one hundred thousand pounds: Marconi received sixty thousand pounds through shares; forty thousand pounds of shares were issued and sold to private investors through public subscription. Of the forty thousand pounds, Marconi received fifteen thousand in cash for his patent, thus leaving the company twenty five thousand as liquid capital.

In those days, Marconi was conducting demonstrations of his apparatus in Italy to government representatives and the King and Queen. One of the demonstrations took place between the arsenal of San Bartolomeo in La Spezia and the cruiser San Martino at a distance of eighteen kilometres. As a result of these demonstrations, the Minister of the Italian Navy announced that it would adopt Marconi’s system. From then on, Marconi became a true businessman, first buying the majority shareholding of the company and then immediately seeing the assignment of the first order.

Over the following two years, it became clear that Marconi was the driving force behind the new company. Each time he demonstrated his enterprise by using his wireless telegraphy in situations which would receive maximum press coverage. In January 1898, for example, he managed to send a communication to London from Bournemouth, where Gladstone (who had been the prime minister for many years) was dieing, and a snow storm had broken the telegraph cables. In the summer of 1898, the Prince of Wales (who became King Edward VII), convalescent due to an accident, was onboard the royal yacht, Osborne, several miles from Queen Victoria’s residence, at Osborne House, on the Isle of Wight; the Queen requested news of her son’s progress and Marconi made this possible, without interruption, by installing his wireless system onboard the yacht and in the royal palace. During the following sixteen days, 150 messages were exchanged and the papers praised the system highly!

In 1899, official radio communications were established over the English Channel and, with the consent of the French government, a telegraph station was set up near Boulogne. Over these two years, various laboratories were built for experiments at hotels on the southern coast of the Isle of Wight (where Marconi and his assistants lived): Marconi installed radiotelegraphic stations in these but, while the business developed, a greater number of permanent production facilities became necessary; thus in 1899, some buildings were purchased in Chelmsford, Essex. The first radiotelegraphic industry in the world was born here. Twelve years later, a new plant was built in Chelmsford, destined to be Marconi’s Wireless Telegraph Company headquarters for many years and where the headquarters of GEC – Marconi Communications Ltd is still to be found. Around the time of the first plant, the Wireless Telegraph & Signal Co. was renamed Marconi’s Wireless Telegraph Company. This change illustrates the authority and respect the name of Marconi commanded with the general public (when the company was established in 1891, Marconi had pointedly refused the proposal of calling it Marconi’s Patent Telegraph Co.).

Radio at sea

At that time the meaning and destiny of the word “radio” was clear to just a small group of dreamers. In 1899, the system was installed and used with impressive results onboard three ships during manoeuvres by the Royal Navy. It was used in the war of South Africa and that year Marconi also landed in the United States where his system was used for the commentary of the America’s Cup and demonstrations were held at the US Naval Department too. In November, Marconi’s Wireless Telegraph Company of America was founded, which later became the powerful RCA.

It was Marconi’s conviction that wireless telegraphy could lead to huge financial and personal benefits for the merchant navy and also to the navigation companies, their crews and passengers, especially concerning safety at sea. This belief came from the fact that communications on British soil were a commercial monopoly, closely guarded by the Post Office, while ships could have their own equipment at sea; hence ships could communicate between themselves and furthermore establish communication between land and sea. As a consequence, in 1900 a separate company was founded, the Marconi International Marine Communication Company, whose aim was to manage an exclusive licence for all maritime uses: it supplied the equipment to ships together with suitably trained radio-operators. In 1900 Marconi obtained the famous patent 7777 for tuned coupled circuits, whose development allowed stations to operate simultaneously without interference from each other. The use of wireless telegraphy apparatus at sea grabbed the headlines of the daily papers on many occasions over the following years: the dramatic arrest of the notorious killer Dr. Crippen and his lover Ethel Le Neve, which occurred thanks to a telegraph message between the S.S. Montrose and New Scotland Yard in London, was of particular note.

Two exciting occasions where the use of the wireless telegraphs was decisive for the saving of human lives at sea were the disaster of the luxury transatlantic liner, the Titanic, occurring during her maiden voyage, and the successive fire of the transatlantic Volturno. In the case of the Titanic the losses were considerable, but thanks to wireless telegraphy all of those who were able to get aboard the lifeboats were saved by rescue ships guided to the disaster scene thanks to radio communication. In the case of the Volturno, which carried six hundred emigrants from Rotterdam to New York, many ships came to her aid in the middle of the Atlantic, alerted by messages sent via radio following the breakout of a fire onboard.

Transatlantic communications

It was the restrictions to the progress of communication caused by the monopoly of the Post Office that changed Marconi’s opinion concerning international and especially long distance communications: he was certain that they were possible, despite the scientific opinion of the time according to which the Earth’s curvature would make such communication impossible. For example, between the United Kingdom and the United States there was the equivalent of 240 kilometres of natural obstacles and water barriers, over which it was believed radio waves could not pass.

Marconi, more determined and confident than ever, worked to prove his convictions by sending radio signals across the Atlantic and convinced his board of directors to support him in what scientists and the general public considered a crazy idea. In Poldhu, Cornwall, land was purchased and towards the end of the 1900s work began to build a new station that would be much more powerful than to those built previously, as well as a complex antenna system. Marconi chose Cape Cod, in Massachusetts (USA) for the second high-power station. Everything was ready at the end of the summer of 1901. However, on 17 September the worst storm in living memory struck the station. All the antennas collapsed and the station was reduced to a pile of wood and tangled mass of wires. Marconi had no intention of giving up though. Shortly after the destruction of the antennas at Poldhu, he organized a team commanded by the trustworthy Kemp to rebuild a temporary antenna system. Due to adverse atmospheric conditions, Marconi decided to attempt reception not just from the Cape Cod station, but also to attempt it with temporary apparatus on the nearest landfall, Newfoundland.

He landed in Newfoundland on 27 November in complete secrecy together with Kemp, another assistant, Paget, and a set of receiver apparatus, kites, balloons, antenna wires and gas accessories. The experiment was limited to one-way communication. The prospects were as gloomy as the Atlantic weather. On 9 December a cablegram was sent to Poldhu requesting that the letter “S” of the Morse alphabet (three points) be transmitted without interruption, beginning on 11 December. On 10 December, an antenna was raised. The day arrived, the transmission started as planned, using a power of about ten thousand watts. Nothing that could be clearly identified as the letter ” S ” was heard. On the 12th the wind was still raging. Marconi was sitting by the receiver listening carefully. Suddenly at 12:30 Newfoundland time, he passed the headset to Kemp saying calmly: “Can you hear anything, Mr. Kemp?”

Kemp took the headset. Through the hubbub of electric static he could hear the unmistakable rhythm of three beats followed by a pause; then another three beats and a pause, and so on, repeated constantly, until after a while the signal was lost again in the static. Marconi had a problem: the world demanded more solid proof than he could offer. On that occasion he sent a cablegram to his London office and two days later he delivered his version of what happened to the international press. The world was sceptical about his claim of having communicated without wires across the Atlantic. Not just the daily press but also technical journals greeted his claim with reticence.

Alexander Graham Bell, the American businessman who must be acknowledged for the industrial development of the invention of another Italian, Antonio Meucci, stated on the subject: “I doubt that Marconi has done it. It is impossible”. Perhaps Bell was sceptical because, if Marconi’s wireless communications worked across the oceans, this would have dealt a lethal blow to the expensive system of submarine cables laid by the American Telephone and Telegraph Company (the giant AT&T). Thomas Alva Edison, one of the greatest American inventors of the time, was much more generous in his judgment: “I am staggered,” said Edison, “I would like to meet this young man who is so brave as to attempt sending an electric wave across the Atlantic Ocean.” And when a journalist asked him if he believed Marconi’s report, he answered: “If Marconi said it is true, then it is.”

In any case Marconi returned to England to report to his directors and shareholders in person and then proceeded to definitely show the world that radio signals could cross the Atlantic by equipping a ship with purposely designed receiving apparatus and travelling with the ship across the Atlantic, so the messages from Poldhu were received and recorded during the night at distances between 1550 and 2100 miles. Marconi then chose Glace Bay, Canada, as the place for his new station, and in New York he registered Marconi’s Wireless Telegraph Co. of America as a “Public Company”; the American rights of Marconi’s inventions were transferred from the parent company for 50 thousand pounds. From then onwards Marconi developed international communications and in 1906 he announced his dream, his ambitious and controversial plan to connect the British Empire through a network of wireless communication stations.

Marconi’s belief in his ability was rock solid: in January 1911, on a theatre programme which quoting Puck’s remark, “I’ll put a girdle around the Earth in 40 minutes”, (taken from Shakespeare’s “A Midsummer Night’s Dream”) he wrote the following words: “I’ll do it much more quickly”. After seven years of political conflict and stiff opposition from the Post Office and the cable companies, the government finally stipulated a contract with “Marconi” in 1913 but the coming war of 1914-18 and subsequent internal political conflicts delayed the project until 1924. In the meanwhile Marconi and his colleagues, concluding the experiments onboard the yacht, Elettra, had developed shortwave directional transmissions which Marconi considered as potentially superior to the long-wave high-power system, originally used. The announcement of his last development confused the British government again, but since Canada, Australia, South Africa and India had decided in its favour, it also agreed to adopt what would become known as the “beam system”. Thus the foundations were laid for the Imperial Wireless Chain, a revolution in global communications. In 1926 the Canadian Beam breezed through the preliminary trials, followed in 1927 by three other connections. In addition to the Imperial Wireless Chain, founded for the Post Office and the Dominion Governments (i.e. the various British colonies), Marconi Company built the stations to communicate with Argentina, Brazil, the US, Egypt and Japan. These stations were integrated in the “Via Marconi” global network.

Intuition and determination

Ironically, the immense success of the Imperial Wireless Chain turned out to be a double-edged sword for Marconi. The threat of the “beam system” was so great to the interests of the cables of the empire that in 1929, on the request of the British Government and Dominions, Cable & Wireless Ltd. was founded with the precise aim of taking away the investments, the patent and traffic rights and the licenses from Marconi’s Wireless Telegraph Company and the Cable Companies. Hence the ambitious dream of Marconi to develop his own commercial telegraph network throughout the world fell to pieces. With the establishment of Cable & Wireless, Marconi’s direct involvement in the company stopped, although he continued his experimental research onboard the Elettra and in Italy. His interest especially focused on experimenting the use of microwaves (away ahead of his time) and in 1932 he installed the first microwave telephone line which connected the Vatican City with the Pope’s summer residence in Castel Gandolfo.

In addition to being an inventor and a businessman, Marconi was also a man of insight, a great prophet of future developments. Already in 1916, he had noted that short waves were reflected by obstacles along their journey. He then expressed the idea that this phenomenon could create the basis for detecting ships at sea. At a joint meeting of the IRE and the American Institute of Electrical Engineers held on 20 June 1922, he concluded with the following observations: “As initially demonstrated by Hertz, electric waves can be completely reflected by conductor bodies. In some of my trials I noticed the effect of the reflection and the deviation of these waves due to metal objects at a distance of a few miles. I think it should be possible to design apparatuses by which a ship can radiate or project a divergent beam of these rays in any direction desired. If these rays meet any metal object, such as another steamer or ship, they would be reflected towards a receiver screened by a local transmitter on the transmitting ship, thus immediately detecting the presence and direction of another ship in fog or bad weather. An additional advantage of this device would be that it would be able to detect the presence and the direction of ships, even when these ships were not equipped with radio.”

Talking about future telecommunication developments in 1927 he stated: “I am known as a man who deals with what is feasible and possible and not utopia or fantasy. Concerning the claims of a saturation point, a limit to the progress of radio, there is no limit to distance, hence there can be no limit to the development of radio”. Today’s communication via satellite and radio astronomy certainly would not have surprised him!

His inventiveness, intuition and determination are the real substance of which businessmen are made. But Marconi had another fundamental characteristic for success in business: he chose and recruited highly prestigious scientists and engineers for his team. An example was a respected doctor, later to become Sir Ambrose Fleming, professor of electric technology at University College London, who in 1900 was appointed by Marconi to be scientific councillor of the company and supplied the main contribution to the design of the high powered station at Poldhu (in 1904 Fleming developed the first thermo-ionic valve, the diode). Furthermore, at the beginning of the 1900s Marconi founded Marconi College, near Chelmsford, where engineers were instructed on the new radio technologies. It is worth remembering that Marconi was ahead of his time compared to the scientific teachings then and hence the company could not rely on engineering courses held at universities.

At its founder’s request, the Marconi Company began important developments in other fields, such as radio communication on planes (experiments started in 1907) and the beginning of broadcasting in Great Britain, immediately after the First World War. After a long battle with the authorities on broadcasting, in 1922 the company founded “The British Broadcasting Company” which, after growing continuously for four years, was taken over by the Government in 1926 and its name changed to “The British Broadcasting Corporation”, otherwise known as the BBC. Thus once again politics intervened to stop Marconi enjoying the fruit of his pioneering work and investments. In that period Marconi was completely involved in the global battle for telecommunications and did not personally play a decisive role in the development of broadcasting. Nevertheless, on another occasion, his intuition and anticipation of future prospects were clear in a message he delivered in 1922: “It is my conviction and lifelong hope that these Marconiphones (Marconi receivers), the latest development of the principles of my invention, may be of great benefit to the general public, providing each house with a new method of education and entertainment”.

Conclusions

It is necessary to make some conclusive observations at this point. At a time of such a decisive and critical transition for the national economy and the world as a whole, Marconi seems to offer us an example of evocative worth and power. We have still not entirely left the collective intoxication of the new economy, which sang of rewards and enticing promises of easy and safe earnings. The business world watches the challenges of globalization with a mixture of doubt and fear and seems to question itself about its own informing principles and its own future. In this panorama, full of opportunities but also surrounded by hundreds of uncertainties, Marconi offers us a business model which is relevant more than ever, based on courage, magnanimity, the desire to create, the powerful capacity to see and evoke the future and, especially, on that kingly ingredient that unfortunately get rarer and rarer: ideas.

 

The most valuable asset

To be successful in the third millennium, an organisation must be flexible, capable of rapidly responding to external stimuli and managed by managers who know how to effectively make wide-ranging and radical changes. It is more and more evident, especially in an industrially and economically advanced western world, that an organisation’s greatest and most valuable asset is its human resources and their contribution of creativity, innovation and empathetic involvement.

Marco Lisi

“(...) then Anu and Bel called me by name, Hammurabi, exalted prince, who feared God, to bring about the rule of righteousness in the land (...) and enlighten the kingdom, to further the well-being of mankind”.

Hammurabi, King of Babylon

A rapidly evolving reality
The birth of modern industry and mass production at the beginning of the twentieth century brought with it the first important scientific studies on managing organisations and human resources. These studies focused on the ambitious aim of defining the universal rules for “the best way of organising” the work of large industrial companies (i.e. to make them more efficient and productive). Nevertheless, the industrial world and organisational models designed by the founding fathers of modern management no longer exist. Today change, a distinguishing feature of the entire history of the post-industrial era, operates at a pace that has never been seen before. Globalisation of the markets has led to an increasingly more aggressive, at times even uncontrolled, competition which is continually being transformed. Technological innovation, especially in the field of information technology and communications, combined with market globalisation, has changed the face of industrial organisations. They have gone from being multinational or transnational companies to “virtual” organisations. This means that many of the theories developed in a not so distant past where the world evolved in a more stable and predictable way, no longer apply. To quote Peter Drucker, one of the greatest gurus of modern management: “Every few hundred years in western history there occurs a radical transformation. Within a few short decades, society rearranges itself, its world view, its social and political structure, its arts, its key institutions. Fifty years later, there is a new world. And the people born then cannot even imagine the world in which their grandparents lived and into which their own parents were born. We are living through such a transformation.” (Peter Drucker, Post-Capitalist Society, 1993). To be successful in the third millennium an organisation must be flexible, capable of rapidly responding to external stimuli and managed by managers who know how to effectively make wide-ranging and radical changes. It is more and more evident, especially in an industrially and economically advanced western world, that an organisation’s greatest and most valuable asset is its human resources, with their contribution of creativity and innovation and their emotional and sympathetic involvement.

From the dawn of mankind to the industrial revolution
The first major undertakings based on the work of the masses (sometimes enormous) and managed by groups of individuals responsible for planning, organising, commanding and controlling activities were accomplished thousands of years ago. Just think of the Egyptian pyramids or the Great Wall of China. It is estimated that it took over one hundred thousand workers and around twenty years to build one pyramid. It is outside all logic and good sense to imagine that a project of this size could be carried out without precise organisation and planning of activities: in fact, it had to be carried out under the guidance of dozens of managers ante litteram, who abided by the rules of common behaviour and procedure.
One of the first historical documents testifying to some type of management of human resource dates back to the eighteenth century, in Mesopotamia. It is the famous Code of Hammurabi, which contains a set of laws and administrative regulations written in Old Babylonian cuneiform on a stone stele. Hammurabi was the sixth ruler of the first Amorite Dynasty of Babylon. He supposedly ruled from 1792 to 1750 BC. Some of the 282 articles of the Code define what we today call the minimum daily wage of a worker: “If any one hire a day labourer, he shall pay him from the New Year until the fifth month (April to August, when the days are long and the work hard) six gerahs in money per day; from the sixth month to the end of the year he shall given him five gerahs per day.”
Apart from the undying texts of “military management” represented by the books of Julius Caesar, Latin literature does not have many literary texts on work organisation. One of these, though not a very good example, is the book De Re Rustica (On Farming or On Agriculture) by Marcus Porcius Cato, the Censor (234 – 149 BC). In this book written in a style that was very different to his orating style (flashy, vis polemica, intelligent and witty), Cato gives a series of good suggestions on how to run a farm and manage the workers, which in his case were slaves. The text is completely permeated with a provincial (it was written during the Punic Wars), utilitarian and traditionalist spirit which was typical of the Romans, “(...) absorbed in the practical interests of the farm, he sees the land only as a means of profit and slaves merely as a means to be exploited in every way.” (Ettore Paratore, Storia della Letteratura Latina, 1950).
Through the more or less dark centuries of the Middle Ages, evolution of forms of payment forms does not emerge until the rules of the Arsenal of Venice in 1436. They introduced the per diem wage (or prevailing wage) and forfait payments (a flat rate), depending on the type of work carried out. Three centuries later, a large epoch-making transformation upset the paradigms of a still rather physiocratic society: the industrial revolution which started in Great Britain during the 18th century and extended to the United States at the end of the civil war. The protagonist of the industrial revolution was not man or the organisation, but the machine. The enormous increase in productive capacity offered by machine tools operated by non-human engines reduced workers to the role of mere appendages to the actual machines and reduced the importance of proper organisation of production (as brilliantly demonstrated by Adam Smith in his truly visionary book, The Wealth of Nations, published in 1776). The need for an effective division of labour and rational organisation of the production process was not felt until towards the end of the nineteenth century. In fact, a series of related events took shape in this period, especially in the United States: the development of large corporations (as for instance in the steel and oil sectors), the birth of mass production (the car industry) and a reduction of transport costs connected mainly with development of the railway system.

The birth of classic management theory (1910-1940)
Modern management theory was born in 1911 when Frederick Taylor published his revolutionary work The Scientific Principles of Management. Taylor spent most of his professional life working in the Midvale and Bethlehem steel companies in Pennsylvania. He was a mechanical engineer who grew up in a Quaker and Puritan family (with strong principles of hard work and efficiency) and was appalled by the inefficiency of workers in the steel industry. In his work, Taylor summarised twenty years of observations and scientific experiments aimed at finding the best way to carry out a specific task. At the base of Taylor’s theory, also called the “scientific theory”, is the hypothesis that since a company is a big machine regulated by universal laws, there is only one ideal way of organising work. In this view of the company, men continued to be considered mere appendages to machines: their movements, fatigue, recovery times and social behaviours are viewed as considerations for analysis and scientific conditioning.
Taylor’s ideas became popular not only in America but in France, Germany, Russia and Japan. Their adoption, especially in the flourishing railway industry of the time, made the United States a world leader in terms of industrial efficiency for the next fifty years. Followers of Taylor’s “scientific theory” included the married couple Frank and Lillian Gilbreth and Henry Gantt. Frank Gilbreth was an engineer and Lillian Gilbreth was an engineer and psychologist. Together they scientifically studied the sequence of actions and the best method for performing certain manual tasks (using chronometers and film cameras). Frank in particular became famous for his experiments aimed at improving the brick-laying process. He effectively succeeded in doubling the laying speed, passing from 120 to 250 bricks an hour. Lillian and Frank Gilbreth are remembered for their impressive scientific work and also for the humoristic and moving description of their family adventures recounted by one of their twelve children in the hugely successful book Cheaper by the Dozen which was later made into a film in the nineteen fifties. The engineer Henry L. Gantt was joined by Taylor in his research. He is famous for inventing a type of graph which represents the planning and process of the activities. The “Gantt chart” is still widely used today. It shows the relationship between the work planned and completed on one axis and the time lapsed on the other.
In 1916, therefore almost parallel to Taylor, Frenchman Henry Fayol laid down the foundations for what came to be called “administrative theory” with the publication of his book Administration Industrielle et Genérale (Industrial and General Administration). One of his followers was the German sociologist Max Weber. Unlike Taylor, who was essentially a management theorist, Fayol was managing director of a large French company which owned numerous coal mines. Therefore, he had practical and direct experience in the theories he personally developed. Similar to Taylor’s theory, Fayol’s administrative theory is based on a mechanistic or Newtonian view of the company. The emphasis is not placed on improving the worker’s performance as he carries out his basic activities, but rather on developing the management capabilities of the managers and on the more administrative and organisational aspects.
With their emphasis on improving efficiency and productivity, both Fayol’s administrative view and Taylor’s scientific view of the classic theory of management give little or almost no consideration to the human factor. The mechanistic view of the company, more or less clearly influenced by coeval and positivist philosophical theories, focuses on a de facto materialism and an overly pessimistic view of man, according to which:
men prefer to be managed rather than being free to decide and act;
their motivation is based only on satisfying their economic needs and consequently, the payment system must be exclusively of a monetary nature;
men inherently dislike working, and so managers must manage them with firmness and impartiality.

Human relations theory (1940-1960)
The management approach based on human resources dates back to the work began by Elton Mayo in 1927. In that year, engineers of the Western Electric Company asked Mayo, a Harvard professor, and his work group to act as consultants in a series of studies conducted at the Hawthorne plant (Cicero, Illinois). Mayo conducted numerous experiments on how different physical factors (lighting, room temperature, layout of the locations, etc.) effected the workers’ productivity. The results showed that physical conditions had little importance and that, on the contrary, the human factor, more specifically motivation, had a prevailing effect on productivity. This is how one of the most important assumptions of the classic theory began to disintegrate. In the following years, the human relations approach was developed as part of the theory based on human resources, which focuses on the importance of worker satisfaction in determining productivity. Dale Carnegie was one exponent of this approach who was not acknowledged in official historiography, but this doesn’t mean he was any less insightful and representative. In 1937, Carnegie published his most famous book entitled How to Win Friends and Influence People, which was read by millions of people in the 1930s, 40s and 50s. It has been translated into dozens of languages and is continually being reprinted. It is a classic of its genre. Carnegie’s basic philosophy was based on the concept that to be successful you had to win the cooperation of others, which was naïve, but at the same time fascinating in its simplicity.
In 1954, the humanistic psychologist Abraham Maslow proposed a theoretical scale of a person’s five fundamental needs in increasing order of importance: 1. satisfaction of basic physical needs; 2. personal and family security and job stability; 3. acceptance in one’s social entourage; 4. self-esteem; 5. self-actualisation. With all the limits deriving from oversimplification, Maslow’s theory was and continues to be credited with having identified payment components other than the purely wage aspect. He also proposed that managers, at least enlightened ones, adapted the form of payment to the specific needs and characteristics of each worker.
In 1960, Douglas McGregor introduced the concepts of Theory X and Theory Y. The first represented an autocratic management style, and the second represented a management style more sensitive to the human factor and interpersonal relationships. Theory X was based on an essentially negative and pessimistic view of the human being. It assumed that men had little ambition, disliked working, tended to flee from responsibilities and needed to be managed closely in order to work effectively. On the other hand, Theory Y is positive and optimistic: workers can self-manage themselves, willingly accept responsibilities and consider work to be something just as natural as resting or having fun. We must add that McGregor’s position was not neutral: he believed that Theory Y best depicted the real nature of the workers and that therefore it should guide management work.

Contingency theory and the humanistic-psychological approach (1960-1970)
At this time, Lawrence, Lorsch and others put forward the conviction, called the Contingency Theory or Situational Approach, that there was no best way to do things and not only one style of management that could be used in all situations. How can management actions be adapted to the particular aspects of various situations and, in particular, to the psychological characteristics of each worker? The experimental method for determining character became popular during this period. It was called the Myers-Briggs Type Inventory (MTBI) and was essentially based on Carl Jung’s psychoanalytic theory and in particular, his book Psychological Types. In those same years, the so-called Management by Objective (MBO) by George S. Odiorne was born and met with initial success. The original aim of the MBO was to provide objective and participatory methodology for planning the activities to be performed by a worker in a certain period and his objectives of professional and personal growth (including wage increases) in the same period.

The systems approach and Total Quality Management (1980- )
The 1980s and 1990s were dominated by the theory of Total Quality Management (TQM) created by a small group of quality experts, the most important of which was the recently-deceased American W. Edwards Deming. It is well known that the success of the Japanese production methods, both in terms of productivity and quality, is largely due to the adoption of TQM. However, few people know that it was an American, precisely Deming, who introduced the TQM to Japan in 1950. Deming developed a 14-point program for transforming organisations which can be summarised as follows:

• customer-focused organisation and customer satisfaction;
• philosophy of continual improvement (TQM is a commitment that can never be satisfied. Quality can always be improved);
• quality of anything the organisation makes must be improved;
• statistical techniques must be used to accurately measure each critical variable in the production process;
• employees must be involved at every level of the quality improvement process.

TQM interprets the transformed characteristics of the market by focusing its attention on reducing cycle time and, consequently, reducing the time needed to place a product on the market (time-to-market). The Zero Defects (ZD) approach comes from the assumption that it is much less expensive to prevent errors or defects than to fix them. It also introduced one of the most famous catchphrases of TQM: “do it right the first time.” Total Quality Management is a systems approach because it does not focus on the organisational and administrative aspects, or on personal and interpersonal relationships, but on a “business system” that includes customers, sub-contractors and all the other factors involved in production activity. And this is how William Ouchi proposed his concept of Theory Z in 1981. It was halfway between McGregor’s X and Y Theories and the American and Japanese styles of management that summed up many fundamental points of TQM with a few variations.
 

A management style for the third millennium
As demonstrated, in the course of history, management theory went from rigid and schematic paradigms to more and more varied and complex models. In particular, the systems approach finally affirmed a concept of management that adapts to different situations with flexibility and discernment. Therefore, it is probable that the management approach must also be differentiated based on geopolitical conditions.
With the advent of globalisation, the industrialised west builds its economic supremacy not so much on the production capacity, which has conveniently moved to second or third world countries, but on the capacity to maintain and further develop its technological and scientific leadership. The focus continues to shift from quantity to quality and from hardware to software. New technologies and innovative ideas in the technical field and the field of organisation, creativity and imagination will be the defiant ground on which the battle for economic supremacy will be fought in the upcoming years. Management itself will go from being a production tool to a product in itself, strategic and exportable in the same way as the most sophisticated electronic chip.
Enlightened management will be able to adapt to these imperative changes and to reinvent the organisation so as to stimulate the creative asset that is human resources, which is sometimes just waiting for the right opportunity to come to the foreground. The manager of the near future must therefore be a sort of pedagogue, an expert in the art of teaching by asking questions, founded by Socrates but only poorly followed and developed in later years. Economic leadership increasingly goes hand in hand with cultural and political leadership, just as Pericles’ Athens or Lorenzo the Magnificent’s Renaissance Florence wielded their economic and commercial influence together with their cultural and scientific influence. Europe is faced with a historic opportunity to reassume its role as peace-time leader of the western world based on culture, invention, creativity and the arts. But to achieve this goal it must be capable of reinventing itself, looking bravely towards the future.