Q.8. What do you mean by factory system and describe its characteristics.
Ans. The Factory System: -
The industrial revolution took place in England and after sometime it spread to other countries of the world. Since the industrial revolution, different types of changes have taken place in. the industrial system. The present age is an era of large scale production. Many big factories have come into existence and they employ a large number of workers. They provide to the needs of the people not only in one country but also in many countries of the world. Thus, machine age has facilitated world trade and growth of multinational corporations.
During this time, tremendous and rapid development of science and technology has taken place. That is why, the present era is known as ‘atomic age’, ‘space age’ and ‘electronic age’. It also call era as the second phase of industrial revolution. In the present machine age, different countries of the world are closely inter-related by very fast means of transport and communication.
The Characteristics of The Factory System
The main features of the modern factory system are as follows:
(i) Large Scale Production: -
Modern factories carry on large scale production to meet the demands of large number of people. Production is carried on in anticipation of demand.
(ii) Mechanization: -
The developments in the fields of science and technology are increased the degree of mechanization in the modern factory system. The efficiency of the factories has increased many times because of new innovations.
(iii) Automation: -
In many advanced countries like the USA and the UK, automation has been introduced in the production system. By automation we mean installation of one set of machines to run another set of machines. For instance, there is automation in oil refineries, chemical industrial units and food processing units. A small number of operators sitting in the control room control the entire operations in the factory.
(iv) Management Information System: -
Introduction of management information system with the help of electronic computers is another highlight of modern machine age. The computers have vast memories. They can store huge amount of information and make available the required information within seconds. They help in taking managerial decisions at the proper time.
(v) Specialisation: -
There is greater specialisation and division of labour in the modern factories. Many industrial units specialise in the . manufacture of a small number of components or parts of different products. Division of labour has facilitated the workers to concentrate on limited operations.
(vi) Standardisation: -
Standardisation brings about uniformity of quality and size, and facilitates large scale production. Now a days, many organisations, whether production or services based, are trying to get themselves standardised as per International Standards called ISO certifications. Thus, overall quality consciousness has increased in the industry.
(vii) Growth of Industrial Areas: -
Concentration of industries in certain regions of the country has given rise to the growth of industrial areas which offer special advantages to the industrial units in regard to raw materials, power, access to market, financing, transporting, etc.
(viii) Expansion of International Trade: -
Mass production, standardisation of products, and improved means of transport and communication have increased the volume of international trade among different countries.
(ix) Research and Development: -
Big industrial enterprises have established separate departments for research and development and they spend a considerable portion of their earnings for innovating new products and ideas. Research and development activities have the effect of decreasing cost, increasing quality and consumer satisfaction and raising the standard of living of the people.
(x) Competition: -
There is cut-throat competition among the producers of goods in all capitalist economies. Economic relations between different persons are based on contract rather than on customs and traditions.
Thus, it can be concluded that industrial revolution gave plants and machinery which gave birth to the factory system. Entrepreneurs established factories and employed a large number of workers to work in their factories. This gave rise to two classes, namely, capitalist and workers and the term industrial relations was coined to create and maintain cordial relations between these two classes for the growth of industry.
