Chandler: A Retrospect

I met Al Chandler in late 1962 (or early 1963), when he visited the Graduate School of Business, Columbia University, as a guest of Associate Dean Clarence Walton. Chandler gave a seminar, based on his new book Strategy and Structure. I was then at Columbia Business School, completing my (and Frank Ernest Hill's) archive-based history of Ford Motor Company's international operations, which was my first book. As my next project, I was seeking to write an overall history of US business abroad. I wanted to figure out whether patterns I had found in my research on Ford abroad were typical (or atypical) of US corporations, in general, as the latter expanded worldwide.

Recently, I looked at the preface (dated June 1963) of our American Business Abroad: Ford on Six Continents, published in 1964; there was no acknowledgment of the contribution of Chandler. Chandler was not cited in the book. In 1970, however, when I published The Emergence of Multinational Enterprise: American Business Abroad from the Colonial Era to 1914, I singled out Edith Penrose, Alfred Chandler, Thomas Cochran, Ralph and Muriel Hidy, George Sweet Gibb, and Evelyn Knowlton, as writers who were "especially helpful." By the time my The Maturing of Multinational Enterprise: American Business Abroad from 1914 to 1970 was published in 1974, I was recognizing how grateful I was to Chandler, who "had outstanding ideas on how I could improve this manuscript; in addition, his work in the field of business history has immensely influenced my thinking."

I remember very well that seminar in the early 1960s at Columbia Business School when I first encountered Chandler and he outlined his arguments on the growth of business enterprise. He described features of domestic business that I came to realize applied very aptly to international business. International expansion seemed in the US case to be an extension of national expansion. In the 1960s, I was in search of ways to organize my research findings. Chandler's narrative on the rise of the large US industrial corporation made remarkable sense to me. His historical account, grounded in a detailed firm-specific storyline, aided me in writing about the history of multinational enterprise.

How, in more precise terms, did his approach help? It gave me insights into the nature of the firm, the importance of management, the strategies of vertical integration, especially, but not exclusively, forward vertical integration. Chandler's ideas encouraged me to focus on how firms grew. In particular, his articulation of the relationship between strategy and structure pushed me to think about the administration of resources over distance, and why multidivisional structures were adopted. They got me thinking about resource allocation within the firm. To study and to analyze business over borders, obviously I needed to consider strategies and structures. The firm was not a black box. It had to be managed and how that occurred was fundamental to my understanding of international business. While economists looked at inputs and outputs and historians looked at business leadership, Chandler pushed his reader to get inside the business enterprise and observe more closely the realities of business goals and how they could be effectively achieved.

In time, I got to know Al Chandler well, and my admiration of him and his work grew. I was studying large businesses that extended globally, so I shared his interest in the major enterprises of the late nineteenth and into the twentieth century. His work aided me in sorting through my findings first on the history of US business abroad and then, subsequently, on foreign business in the United States. His ideas gave me new, significant approaches to examining my own research discoveries. While Al had not been responsible for Harvard University Press's publishing my The Emergence of Multinational Enterprise (Ray Vernon was), Al did include the second volume of my history of US business abroad, The Maturing of Multinational Enterprise (1974), in his Harvard Business History series. Over time, each of his path-breaking studies, The Visible Hand (1977) and Scale and Scope (1990) added to our field's knowledge and to my personal knowledge of business history...