An Executive’s Word – Franklin Folts

Franklin Folts – Harvard Business School 1930’s to 1950’s

I am becoming a student of “classic” management literature – that is titles from 1840 – 1940.  Today I purchased a copy of the book Introduction to Industrial Management by Franklin E. Folts (McGraw-Hill, 1938 – pg 369-370).  Franklin Folts was a professor of industrial management in the Graduate School of Business Administration at Harvard University in the 30’s, 40’s and 50’s.   I am fascinated by the moral grounding of the practicing executives in the book.  Following is a quote from the executive of the Panther Manufacturing Company:

I believe that an executive’s word must be as good as his bond.  If he tells his men that he will follow a certain course, he must stick to that course even though circumstances develop which were not foreseen.  ……..  Now it happened that in one of the first studies by our time-study department, an error was made by one of our engineers.  As a result of this mistake, the men who performed a certain task could earn a bonus of 150% to 175% which of course was excessive.  When the matter came up for discussion with the conference committee, it was evident that the workmen expected me to ask the have the rate revised, but I told them that the rate would have to stand, first, because I had agreed to make no revisions downward except under specified conditions, none of which actually existed, and secondly, because they were in no way responsible for the error.  The incident occurred four years ago.  The rate is still in effect.  I have always considered not only was this the one honest course I could follow, but that it was good business as well, for when the men found that I was willing to stay by my word on that particular rate, they were willing to give me the benefit of the doubt on subsequent new rates as they came up for consideration.

Do professors try to instill this kind of integrity in their students today?  Is “staying true to your word” a value in today’s business world?  I wish that Professor Folts had published the name of the executive at Panther Manufacturing Company.  He sounds like the kind of person I would like to be associated with.