To mention subcontract has been an answer to the question how the factories were operated in nineteenth century Britain. First, this article examines whether or to what extent this system was prevalent, and second, whether it played the same managerial functions in various industry branches. Finally, in place of subcontract, a different framework in interpretating the nineteenth century employment is proposed. Whether the subcontract system was prevalent or not can be measured by investigating the forms of wages paid to the foremen or skilled workers who were in charge of a group of workers. Some were paid by piece, but they were mostly paid by time. In the latter case, these workers were not subcontractors. More important still was the attitude of skilled workers to subcontract or 'piece-masters', and further to the forms of payment, which differed from industry to industry. These indicate that the subcontact did not carry out the same managerial function throughout all the industries. Further, in spite of these seemingly different attitudes to wages and employment, they have one motive in common, i.e., to maintain the autonomy of skilled workers. Various facts can be interpretated more successfully by using a different framework rather than by subcontract. That is to use the idea of internalisation of production function and the transaction of labour to the manufacturing firms. In these respects, autonomy of skilled workers lies in the intermediate areas between the systematically organised workshops since the end of the nineteenth century and the sequential spot contracts of labour before the Industrial Revolution.
In order to evaluate the impact of the inside contract system in the process on the evolution of factory management, this paper adopts the technology-organization approach. The type of organization developed by the early textile mills remainded satisfactory in the mechanical industries (textile, meat-packing, flouer-milling) and the refining and distilling (cottonseed oil, petroleum, beer, whisky). In the case of these industries, the adoption of the new continuous-process machinery and improved plant design had a profound effect on increasing output. They had much less impact on the modern factory organization. On the other hand, the metal-making and metal-working industries were faced with many managerial difficulties toward mass-production. Gang-work and separated plant lay-out impeded the coordination of flow through several processes of production. The inside contract system was the first organizational response to attain the high-volume throughput in these factories.