Henry Ford’s Genius
March 22nd 2007 00:08
When Henry Ford’s employees numbered by the hundreds of thousands he did the unthinkable: doubled their wages to the then fantastic amount of six dollars per day. Not less surprisingly, he halved the price of his flagship car, the model T.
How did Ford come to think in such a way as to do this? I found the answer in his most amazing book “Today and Tomorrow”, written in 1926. There, on page 140, he says clearly: “The right price is not what the traffic will bear. The right wage is not the lowest sum a man will work for.”
And then: “The right price is the lowest price an article can steadily be sold for.” Surprised? There’s more: “The right wage is the highest wage the employer can steadily pay.”
He then puts it in the shoulders of the entrepreneur: “That is were the ingenuity of the employer comes in. He has to create customers, and if he is making a commodity, then his own workers are among his best customers.”
He then mentions how, in fact, his employees were his best customers. But in other parts of the book Ford only mentions the circular flow of money, to use modern terminology, fuelling the economy and, ultimately, also benefiting him.
He also mentions how lowering prices has both a social function and a business one. We all know that lower prices bring added sales which in the end may mean greater gains. But Ford believes that if “big business” where pushing prices high they would then be causing less general affordability in the community.
His concern for the “public” is so great that he relates how he limited the size of his factories in each location so as not to clog up the public transport system and not to inflate prices in the local shops.
In all, Ford strikes me, not jus as the genial engineer and car creator he was, not just as the successful business man he was, but also as a man with a social conscience. He was, all the time, concerned with the impact of his big business in the public at large and he did take substantial and uncommon measures in that way.
I feel respect.
How did Ford come to think in such a way as to do this? I found the answer in his most amazing book “Today and Tomorrow”, written in 1926. There, on page 140, he says clearly: “The right price is not what the traffic will bear. The right wage is not the lowest sum a man will work for.”
And then: “The right price is the lowest price an article can steadily be sold for.” Surprised? There’s more: “The right wage is the highest wage the employer can steadily pay.”
He then puts it in the shoulders of the entrepreneur: “That is were the ingenuity of the employer comes in. He has to create customers, and if he is making a commodity, then his own workers are among his best customers.”
He then mentions how, in fact, his employees were his best customers. But in other parts of the book Ford only mentions the circular flow of money, to use modern terminology, fuelling the economy and, ultimately, also benefiting him.
He also mentions how lowering prices has both a social function and a business one. We all know that lower prices bring added sales which in the end may mean greater gains. But Ford believes that if “big business” where pushing prices high they would then be causing less general affordability in the community.
His concern for the “public” is so great that he relates how he limited the size of his factories in each location so as not to clog up the public transport system and not to inflate prices in the local shops.
In all, Ford strikes me, not jus as the genial engineer and car creator he was, not just as the successful business man he was, but also as a man with a social conscience. He was, all the time, concerned with the impact of his big business in the public at large and he did take substantial and uncommon measures in that way.
I feel respect.
| 27 |
| Vote |
Subscribe to this blog
