Bata ran his factory as tiny firms buying and selling from each other

Tomas Bata grew his family's Zlin workshop from 50 pairs of shoes a day in 1894 to 144,000 by 1932; by the late 1920s Czechoslovakia was the world's biggest shoe exporter, with 1,825 Bata outlets at home and 660 abroad employing over 30,000 factory workers. The problem he kept attacking was not machinery but responsibility: how to make every worker care about waste and quality at industrial scale.

His answer, matured in the early 1920s alongside Ford-inspired conveyor belts introduced in 1923, was to make the factory an internal economy. Workshops became autonomous businesses in a chain: each bought semi-finished goods from the workshop before it and sold its own output onward — the soles shop literally sold soles to the shoe-assembly shop — with each unit keeping its own books and its own profit or loss.

Three design rules made the internal market real: profit had to be calculated weekly, fast enough to steer behavior; every employee had to be able to compute their own participation themselves; and the profit-sharing unit had to be small enough that one worker visibly moved its result. Units earned bonuses for on-time, on-budget, good-quality work and had pay docked for unsellable output. Wages went into Bata bank accounts earning 10 percent interest, recycling pay into company capital.

Ran the factory as tiny firms trading with each other, with weekly profit and units small enough that one worker visibly moved results.

Internal prices turn every handoff into a measurable transaction, surfacing waste as a cost to the next workshop.

Weekly profit calculation keeps feedback inside the horizon where behavior changes.

Small units convert free-riding into ownership: one worker's care or shoddiness visibly moves the unit's bonus.

Wage accounts paying 10% interest recycled pay into capital and tied workers' savings to the firm.

To make quality everyone's job, split the flow into stages that buy and sell from each other, keep units small enough for one person to matter, and settle accounts weekly.

Output rose from 50 pairs a day (1894) to 144,000 (1932); by 1932 the company sold 35 million pairs a year through 2,485 stores worldwide The internal chain of profit centers anticipated Semco's and Handelsbanken's designs by half a century and prefigured the 'every unit a P&L' doctrine of modern management; Zlin's company-town system was studied worldwide, and management scholarship remembers Bata as a pioneer of industrial self-government.