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The New Economics for Industry, Government, Education Paperback – January 1, 1994

4.5 out of 5 stars 215

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In this book W. Edwards Deming details the system of transformation that underlies the 14 Points for Management presented in Out of the Crisis.

"... competition, we see now, is destructive. It would be better if everyone would work together as a system, with the aim for everybody to win. What we need is cooperation and transformation to a new style of management."

In this book W. Edwards Deming details the system of transformation that underlies the 14 Points for Management presented in Out of the Crisis. The system of profound knowledge, as it is called, consists of four parts: appreciation for a system, knowledge about variation, theory of knowledge, and psychology. Describing prevailing management style as a prison, Deming shows how a style based on cooperation rather than competition can help people develop joy in work and learning at the same time that it brings about long-term success in the market. Indicative of Deming's philosophy is his advice to abolish performance reviews on the job and grades in school.

Previously published by MIT-CAES


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Editorial Reviews

About the Author

W. Edwards Deming (1900-1993) was an international consultant in quality and productivity management. In 1987 President Ronald Reagan awarded him the National Medal of Technology. --This text refers to an out of print or unavailable edition of this title.

Product details

  • ASIN ‏ : ‎ 091137907X
  • Publisher ‏ : ‎ Massachusetts Inst Technology; 2nd edition (January 1, 1994)
  • Language ‏ : ‎ English
  • Paperback ‏ : ‎ 247 pages
  • ISBN-10 ‏ : ‎ 9780911379075
  • ISBN-13 ‏ : ‎ 978-0911379075
  • Item Weight ‏ : ‎ 1 pounds
  • Dimensions ‏ : ‎ 6.25 x 1 x 9.5 inches
  • Customer Reviews:
    4.5 out of 5 stars 215

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Customer reviews

4.5 out of 5 stars
4.5 out of 5
215 global ratings
Good book
4 Stars
Good book
Overall I found this book to be an introduction to Deming’s methodologies. I liked that this book takes a different approach to quality. I have learned quality through calculations and graphed data, but this book focuses on quality through people management. Chapters 2-6 were my favorite chapters. Contrary to common views, quality is not achieved by precise machinery, but instead by companies with fully accountable management. Dr. Deming explains how quality is always the responsibility of management, therefore, knowledgeable management are required. Below I provide some information on the author and a breakdown on each chapter of the book for a better understanding of what the book covers.Dr. Deming is known for leading a quality revolution that helped improve the competitive position of the United States. As a consultant for over forty years, Dr. Deming’s clients ranged from manufacturing companies to hospitals and legal firms. Throughout his career, he received many awards including the National Medal of Technology awarded to him by President Ronald Regan in 1987. As stated by Dr. Deming, “This book is for people who are living under the tyranny of the prevailing style of management.”The book begins with the preface where Dr. Deming states that the solution to a company's problem comes from cooperation, not competition. In chapter 1, How are we Doing? Dr. Deming explains how the United States falls short in trade. He states that companies must perform and produce top quality to be competitive in the worldwide market. Chapter 2, The Heavy Losses, aims to identify the sources of waste caused by management practices and suggests better alternatives. An example given is the comparison of a present practice (delegate quality to someone, or a group) and providing a better practice (accountability for quality rests with the top management). In chapter 3, Dr. Deming stresses the importance of a managed system. A system must always have a clear objective. Without a clear understanding, the system cannot work. Chapter 4, A System of Profound Knowledge, describes four components: appreciation for a system, knowledge of variation, the theory of knowledge and psychology. In chapter 5, Dr. Deming states that a leader's purpose is to provide transformation in an organization. Chapter 6, Management of People, was the most interesting. Deming says there needs to be a change in the idea and practice of competition within a team. He provides a declining graph showing how people's usual attitude of willingness to learn and contribute to a system decreases in a system that creates competition and embarrassment between groups. He places great emphasis on the idea that a system must be one large group, not many different subgroups. Chapter 7 is about learning important principles with the red beads experiment. In chapter 8, Dr. Deming discusses Shewhart's concepts of variation, common cause, and special cause. He writes about the importance of management knowing how to properly differentiate between these concepts. Chapter 9, The Funnel, illustrates losses caused by tampering of a process. Management must let workers know that discrepancy in a process is dealt with by sampling and further analysis not by readjusting the machine every five minutes to meet specifications. Lastly, chapter 10, goes more in depth of how variation is everywhere. He states that understanding variation is useful for everyone, especially management.
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Top reviews from the United States

Reviewed in the United States on June 7, 2013
The New Economics by W. Edwards Deming is all in all an enjoyable and insightful read. The shear articulation and ease with which Deming develops his theories and ideas makes this book simple to read and an overall enjoyable journey. The most significant points covered in this book are Deming's Theory of Profound Knowledge, the 7 Deadly Diseases, the 14 Points of Managing people, the Funnel and Red Bead experiments, and rather in depth discussions on the detrimental effects of competition versus cooperation, the definition of a system, and the occurrence and definition of variation. Although these are the typically notable points of the book, there are also tons of smaller ideas and theories in nearly every chapter. For example, Shewhart's PDSA or Plan, Do, Study, Act approach is defined in chapter six, and although not an original Deming theory, its inclusion exemplifies the shear breadth of this book. In reading this book, be prepared to learn a significant theory or idea on nearly every page! Additionally, Deming does an outstanding job of breaking down each idea so that anyone who picks up this book could understand his points and theories. In my opinion, the most difficult theory to understand and grasp was Deming's Theory of Profound Knowledge. The Theory of Knowledge in particular, which was the third theory within this umbrella theory, was difficult to understand as it is quite abstract. This section, however, despite being difficult to understand on a conceptual basis, was exceptionally well laid out and easy to read, making an otherwise difficult concept comprehensible.

One of the most significant and insightful sections within the book are Deming's 14 Points of Management. These points break down the definition of what it takes to be a truly excellent manager. In this book, Deming's original 14 points are somewhat paraphrased, however, their value is not diminished at all. Rather, this paraphrasing makes it easier to understand and ties back to the overall ease of reading this book. These 14 points also represent many common and notable ideas touched on throughout the book. For example, rules one and two state that a manager must understand the meaning of a system and convey its meaning to the employees, and that a manager must help employees to see themselves as crucial elements within the system. This link reiterates the importance of the system within the book. Many other rules also tie to other theories and ideas mentioned throughout the book and reiterate key points in terms of how they apply to the management of people.

Perhaps the most prominent theme or idea that saturates the book in its entirety is Deming's disapproval and disdain for the current methods of management and overall business in the modern world. From the first chapter of the book, it is clear that he disapproves of these current practices, a point that is reiterated throughout the book. Chapter two focuses on how the current style of management is essentially the most wasteful and detrimental element of the current business systems. The Seven Deadly Sins as well as many other points throughout the book state this mantra continuously. Deming continues his disapproving theme for the current business model in his extensive criticism of competition in both life in general and business. In chapter six he talks about how competition is a hugely detrimental element in both life and business. He defines this competition as `Forces of Destruction" to the intrinsic self worth and motivation of people. Figure 10 in chapter six on page 122 in particular was extremely interesting in my opinion and showed the longevity of these "Forces of Destruction" in our live today. Overall, I would strongly recommend this book. The amount of information and insightful ideas was truly astounding. It made for an enjoyable and educational read, and should be a staple in everyone's personal library.
Reviewed in the United States on May 31, 2012
Deming's beliefs on management mainly focus on training management. Upper management needs to realize problems in manufacturing are their responsibility and blame shouldn't be passed on to those who do not know better. "The operator is not responsible for the product nor for its quality. He can only try to do his job." Once they understand this, they need to work with customers to set the standard for quality based off of capability. Setting quotas are an incorrect way of motivating employees to make sales or production make ends meet. This causes fear. Fear may lead to incorrect and useless data. It may cause employees to make production attainments seem as if they are where they need to be, when in reality, they had not reached that attainment. It may also cause a rise in competition between employees. This is an unhealthy form of competition because it will motivate employees to hurt one another fueled by greed. It may also motivate employees to oversell to customers and decrease the customer's satisfaction because they feel cheated. Management needs to understand that the company needs to be treated like a system and get it across to its employees. A clock has hundreds of gears but if one gear is missing, it will not work. A company is similar to this. Deming's views are that ranking and incentivizing the work will not motivate employees, but will demoralize and cause the opposite effect. This would be the first thing to abolish. Employees should not be paid by commission, but as salary. The eployee that cannot produce the same amount as someone else should not be disciplined by receiving less pay. It is a sign they need help. eg. If a machine doesn't work properly, it shouldn't be expected of them to produce 100%, since it is not their fault. To get the company to run as a system, employees need to begin helping each other to better the business as a whole. If the company does improves, shareholders, employees, suppliers and customers will benefit as well. Everyone needs to understand the aim.

I understand Deming's approach and I agree with what his views on variation and fixing systems, but one thing kept me tossing and turning at night. He completely disregards homosapien's infatuation with money. Deming doesn't factor in greed. His socialist views dictate a different view that would only work in an ideal world. I would love for companies to run without production attainment goals, but it is improbable. You do not give the keys of a prison to the inmates. If we take off all American salesmen from their commission style pay, what would motivate them to sell more? Why should they work harder? Deming doesn't believe in incentives so why should anyone want to work harder when they only work to make money. If they can make the same amount of money by not even picking up a phone, what would make them do it? Also, Deming does not believe in awards so employees would not gain the satisfaction of glory. This would remove motivation from most employees. The only thing keeping them in line is the fear of loosing their job. IF the right people are hired, this may be possible to do. They must be only looking out for the company's benefit and be selfless. If you find this person, please forward me their resume and contact information.

Top reviews from other countries

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Luis G
5.0 out of 5 stars Innovación en la gestión de personas y sistemas
Reviewed in Spain on January 29, 2017
Creo que merece 5 estrellas pues es un libro imprescindible para el emprendedor, el gerente, el estudiante y el empleado. Deming ha dado en el clavo con este trabajo, su último libro antes de fallecer. En comparación con Out of the Crisis, este libro es mucho más sencillo de leer pero aporta mucho más, define su SoPK y eleva la psicología a un lugar principal en la Mejora Continua y en la Ingeniería de Sistemas.
Se lo recomiendo a todo el mundo que quiera estar a la última en Management.
D. M. Beograd
5.0 out of 5 stars Faith changing power
Reviewed in Canada on September 21, 2015
With its older sister book, "Out of Crisis", this is the most influential book I ever read. Deming's work is a kind of communist manifesto for business. I have seen and experienced Deming's teachings in practice, and it works. Alas, it will likely never get a chance in the Western business circles. It requires that management actually do their job. However, Deming books help in organizing business practices, understanding processes and non-uniformities in the process output. One can learn how to understand what is going on in business and how to approach 2 different kinds of problems. Even for a little control over their work that they have, working people can become much more effective in what they do, and significantly improve collaboration with other parties they cooperate with.
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Bm Levitan
5.0 out of 5 stars Classic, but still relevant
Reviewed in the United Kingdom on March 24, 2013
It seems a shame that W Edwards Deming had more impact in Japan than in his home country (USA). Certainly the west could still benefit from his thinking. Unfortunately people latch on to some of the tools (e.g. control charts) and misapply them. Deming's system of profound knowledge - explained carefully in this book - should be at the centre of any attempt to improve. If you focus on just one of the elements - or even on all of them, but as separate entities - you miss the whole point. Deming is at pains to explain that the "system" is what counts and gives many examples of what happens when you misunderstand this or misapply system concepts. If you haven't come across his work before, this is an inspiring read. If you have heard of him but haven't been to the source, then this is a good place to start. A must read for any serious business manager.
5 people found this helpful
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まるたてくんた
5.0 out of 5 stars デミングって,易しい文章なんですね!
Reviewed in Japan on January 24, 2014
日本語の訳本が昔あったようですが,絶版であり,2万円以上のもの凄いプレミア本だったので,英語版ペーパーバックを購入しました.(先日,訳本4000円台で出てたので,購入しました.もともと2000円の本だったらしいので,倍以上ですが,それだけの価値はありそうです.)
英語なので,読み進むにはまあ,ちょっとは英語力は必要ですが,ネットの英和辞書も活用できるこの御時世,原著の文章は極めて平易であることに驚きました.良く考えればアメリカの町工場のオッチャン社長や,すこし骨のある工場労働者たちにも分かるように書いてあるんでしょうね.
淡々と書かれてますが,とにかくこの哲学を伝えたいという,とても強い情熱が「易しさ」から伝わってきます.

タイトルは,「産業,政府,教育のための新経済学」
まさにトヨタ式カイゼンの源流であるデミング哲学の珠玉の一冊です.トヨタも,トヨタで傲ることなく,デミングまで戻って,トヨタ式カイゼンをもう一度見直した方が良いのかも知れません.

当初,やっぱり日本語でスルスルっと読みたかったので,★1つだけ減らしましたが,日本語版も落手した今,対比してよみながら訳者の解釈が入らない「生デミング」はやっぱり価値がありますので,★x5にしました.
One person found this helpful
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Niall MacTaggart
4.0 out of 5 stars Four Stars
Reviewed in Canada on December 16, 2016
Fresh and reiterative of the real basics, which unfortunately, we have strayed away from.