Background

Adam Smith was born in 1723 to a windowed mother, as his father died two months

before his birth. He was born in the port town of Kirkcaldy, Scotland and died at 67 in 1790

(“Biography - Adam Smith”). Adam was an economic thinker and moral philosopher broadly

referred to as the father of modern economics. He graduated from a top secondary school in

Scotland, and at the age of 14, he joined the University of Glasgow, where he was schooled

under philosopher Francis Hutcheson's influence (“Biography - Adam Smith”). Adam studied

European Literature for six years after getting a scholarship to Balliol College, Oxford. He also

developed contempt for teachers and Elite English Education. Adam became publicly

recognized in 1748 after starting a sequence of lectures in Edinburgh on Jurisprudence, rhetoric,

and belles Lettres (“Biography - Adam Smith”). He later becomes a professor at the age of 28,

teaching moral and rhetoric philosophy at Glasgow university. Most of his lectures created the

ground of The Moral sentiment. He also worked as Commissioner of customs in Scotland.

Contributions

Adam Smith's main concepts on the development of management thought to lie in his

two core ideas; He was the first individual to pinpoint that labor division and specialization are

the core drivers of increased productivity. His other idea was on the conceptualization of

the”invisible hand principle" which explains the way in which, under the right set of incentives,

individuals who are self-interested are directed into engaging in activities that are of importance

to the entire society (Waliczko and Sołek-Borowska). These two ideas are of great significance

in the management field (Waliczko and Sołek-Borowska); particularly, managers who are

successful are the ones that have the capability to create favorable ‘rule of the game’ which go

along with the labor incentives with the firm’s goals. Adams's contributions offer a ground for
labor division and show the significance of setting up the right 'institutions "within an

organization, terming it as a just reward system.

Thoughts

Practically, the contributions of Adam Smith on management offer a foundation for labor

specialization and division and show the essence of setting up the right institutions within a firm.

In my opinion, Adam smith's concept has greatly impacted management today as it has assisted

managers in creating favorable ‘rules of the game’ which get along with the labor incentives and

the objective of the firm (“Adam Smith: Managerial Insights from the Father of Economics |

Emerald Insight”). Management has been made easy and better as it gives a chance to individuals

to specialize in a certain task (“Adam Smith: Managerial Insights from the Father of Economics |

Emerald Insight”). Job specialization makes employees do the job more efficiently, reducing the

offering of service and minimizing the total cost of goods production. Job specialization and

division have been embraced in today’s society, where most firms use this strategy with the aim

of increasing efficiency and increasing profit and also saving time; therefore, these ideas are

being implemented.

Closing

Adam was an economic thinker and moral philosopher who is broadly referred to as the

father of modern economics. He was the first individual to pinpoint that labor division and

specialization are the core drivers of increased productivity.

 Work Cited

“Adam Smith: Managerial Insights from the Father of Economics | Emerald Insight.” Journal of

Management History, vol. 16, no. 4, 2013, pp. 504–8, https://doi.org/10.1108\/jmh.

Accessed 2 Feb. 2023.

“Biography - Adam Smith.” Adam Smith, 16 Nov. 2014, thegreatthinkers.org/smith/biography/.

Accessed 2 Feb. 2023.

Waliczko, Tomasz, and Celina Sołek-Borowska. “Contribution of Adam Smith into Management

Thought.” Nowoczesne Systemy Zarządzania, vol. 17, no. 2, June 2022, pp. 79–86,

https://doi.org/10.37055/nsz/150307. Accessed 2 Feb. 2023.