• U.S.

MANAGEMENT: The Facts of Life

3 minute read

In Republic Steel’s Canton, Ohio plant, when a disgruntled worker was told to hurry, he snapped back: “Why should I knock myself out for Republic? They make $75 out of every billet of steel and I get nothing.” His foreman, Chris Cutropia, who was both forewarned and forearmed, took the worker aside, and convinced the griper that the company would be lucky to make 75¢ a billet. Reporting the incident to his superiors, Foreman Cutropia added: “Three months ago I wouldn’t have been able to say anything.”

Like 3,048 other foremen and supervisors, Cutropia not only knows a lot more about costs than he did a few months ago; he also knows a lot more about such varied matters as stock investments, the U.S. banking system, and how to read a balance sheet. Reason: he and his fellow foremen have been going to school.

Republic has spent about $106,000 teaching the basic facts of economic life to these foremen. Last week it announced that it is 1) providing the same course for 2,989 additional supervisors, 2) starting up an advanced course for the original students on such subjects as human relations in industry, problems of steel-industry expansion, taxes, the role of unions, etc.

“More Hooey?” The school grew out of Republic Steel President Charles M. White’s belief that his workers’ misconceptions about such matters as profits were a prime source of labor-management conflict. Last year he got the University of Chicago’s Industrial Relations Center to make some questionnaire tests which verified his suspicions: of 650 foremen tested, 45 believed that $100 million is a billion, 26% believed that everyone gets the same Social Security pension when he reaches 65, 39% thought that “capital is not productive,” 23½% believed that companies try to “hide profits” by boosting depreciation charges.

The university drew up 15 elementary lectures on economics, and trained a crew of 34 Republic supervisors to deliver them. When White first tried out the course on 250 supervisors at the Youngstown plant, the men were cynical, expecting “some more of that company hooey.” When they learned that they were getting easily understood facts—and a minimum of hooey—about matters which had long baffled them, their interest rose until men were betting on who would score highest in the tests. White quickly extended the lectures to foremen in 26 plants.

More Pies. Republic’s teachers geared the lectures to a 10th-grade level, and used plenty of visual aids. Actual pies were cut up to show how a company’s sales dollar is divided into wages, costs and profits; additional pies were pulled from drawers to show that more production is required to produce more shares for labor & capital.

After the lectures, new tests showed that the number who believed that “capital is not productive” dropped from 39% to 13.4%, those who believed in “hidden profits” dropped from 23½% to 12%, only 3% still believed everyone got the same Social Security. On the tests, the foremen got better scores than management itself.

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