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The Visible Hand: The Managerial Revolution in American Business is a book by American business historian Alfred D. Chandler, Jr., published by Harvard University Press in 1977. Chandler argues that in the nineteenth century, Adam Smith's famous invisible hand of the market was supplanted by the “visible hand” of middle management, which became “the most powerful institution in the American economy”.

The Visible Hand was awarded the 1978 Pulitzer Prize for History and the Bancroft Prize of Columbia University.

“In 1895, Frederick W. Taylor delivered his first paper on what he soon termed 'scientific management.' He explicitly addressed himself to improving the gain-sharing planes of Towne and Halsey. First, he pointed out that the cost and the resulting savings to be shared should not be based, as they were in those plans, on past experience, but rather on a standard time and output to be determined 'scientifically' through detailed job analyses and time and motion studies of the work involved. In addition, Taylor would apply the stick as well as the carrot. He would do this by returning to the piece rate and by paying a 'differential piece rate.' THe workers who failed to meet this standard time and output received a lower rate per piece, while those who excelled received a much higher rate per piece.” (Chandler, 275)

“His efforts to determine scientifically standard time and output helped Taylor to become the nation's best-known expert on factory management. They also convinced him that shop or department foremen, the central figures n factory organization, must go. He became certain that no man could acquire the versatile competence needed by a general or “line” foreman to do his job properly. He proposed to achieve this goal by forming a planning department to administer the factory as a whole and to do so through a number of highly specialized shop bosses, on, in his terms, 'functional foremen.' The activities of the general foreman were thus to be subdivided into parts. Instead of reporting to one boss the works in one shop or department would report to eight. These included as Taylor wrote in his major work, Shop Management, '(1) route clerks, (2) instruction card clerks, (3) cost and time clerks, who plan and give directions from the planning room, and (4) gang bosses.' These four provide coordination and control. Three other functional foremen - the speed boss, the repair boss, and the inspector - were concerned with the performance and the result of work. An eighth, the shop disciplinarian, reviewed the workers' 'virtues and defects,' and aided them in more effectively carrying out their tasks.” (Chandler, 27-276)

“All eight of these functional foremen reported to the planning department. 'The shop, and indeed the whole works,' Taylor insisted, 'should be managed, not by the manager, superintendent, and foreman, but by the planning department.' THe planning department was also to supervise job analysis and time and motion studies and to set the standards of output. After reviewing the orders received at the plant, it was, on the basis of its analyses and information, to schedule the flows of current orders and to set the daily work plan for each operating unit and for each worker int he factory. In addition, it was to refine the shop-order system of control and to keep a constant check on 'the cost of all items manufactured with complete expense analysis and complete monthly comparative cost and expense exhibits.' Its employment bureau was the have charge of recruitment and laying-off of workers. Finally, the planning department was to be responsible for 'the maintenance of the entire systems, and of standard methods and applicances throughout the establishment, including the planning room itself.' (Chandler, 276)

Although Taylor's goal of extreme specialization proved unacceptable to American manufacturers, many of his basic concepts were incorporated into the organization of modern American factories. The weakness of the Taylor system was its failure to pinpoint authority and responsibility for getting the departmental tasks done and for maintaining a steady flow of materials from one stage of the process to the next. Responsibility for such activities was diffused among the several members of the planning department and among the functional foremen. Several of Taylor's contemporaries, including such writers on factory management as Alexander H. Church, Harring Emerson, Leon P. Alford, and Russell Robb, pointed to this critical need in factory operations. Church, for example, stressed that while Taylor focused on 'analysis' of tasks, he failed to consider their 'synthesis' into the organization as a whole. 'Coordination,' Church insisted, 'is the keynote of modern industry.'” (Chandler, 276-277)

“No factory owner, even those who consulted Taylor or his disciples, adopted the Taylor system without modifying it. To provide the essential overall coordination and control of throughput and at the same time to benefit from the functional specialization proposed by Talor, many installed an explicit line and staff structure. THe operating departments or shops continued to be managed by foremen who were generalists and who were on a line of authority that came down from the president by way of the works manager or superintendent. THe functions of Taylor's planning department and functional foremen became those of a plant manager's staff. Overall coordination, control, and planning remained the responsibility of the works manager, who was now assisted by a staff of specialists.” (Chandler, 277)