Business Studies Bullish

BUSINESS STUDIES BULLISH Ben Forster Robert F. Dalzell, Jr. Enterprising Elite: TheBostonAssociatesand the WorldThey Made. Cambridge: Harvard University Press, 1987. xviii + 298 pp. Illus. Burton W. Folsom, Jr. Entrepreneurs vs. TheState:A New Look at theRise of Big BusinessinAmerica, 1840-1920, Reston: Young America's Foundation, 1987.xii + 144 pp. Illus. Robert Sobel. Trammell Crow,MasterBuilder:TheStoryofAmerica'sLargestReal Estate Empire. New York: John Wiley & Sons, 1989. xviii + 254pp. Illus. Joanne Yates. ControlthroughCommunication:TheRiseof SysteminAmerican Management. Baltimore: Johns Hopkins University Press, 1989.xx + 339 pp. Illus. Gerald Zahavi. Workers,Managers,and WelfareCapitalism:The Shoeworkers and Tannersof EndicottJohnson,1890-1950. Chicago: University of Illinois Press, 1988. xiii + 261 pp. Illus. The beginning of American business history as a separate sub-discipline is usually associated with N.S.B. Gras's appointment in 1927 to the (acuity of the Harvard School of Business. 1 While in subsequent years there .were disputes as to the sub-discipline's intrinsic validity and character, biographical studies of businessmen or individual businesses took dominance, perhaps because of Harvard's prevailing case study method. By the 1960s, some practitioners became critical of this emphasis, and urged that business history broaden its perspectives; A.D. Chandler, now the best-known of American business historians, undertook to follow his own prescription in this regard.2 Chandler's works stressed the importance of organizational structure and of decision-making processes in the corporate world; other analysts broadened the scope of business history by examining how business practices reflected culture and society; yet others emphasized the process by which business norms came to be adopted in the larger society, and even shaped and directed it. Business history thus expanded to include both the social history of business, and what has been called the "organizational synthesis."3 Business history as currently practiced, then, is enormously varied, and current literature covers a considerable spectrum of analytical and methodological practices, as well as a range of subject matter from individual entrepreneurs and businesses to general social changes in business practice and to studies that verge on economic history. 380 Ben Forster The biographical approach has certainly not disappeared. Take, for example, the enormously productive Robert Sobel's business biography of one of the greatest American developers, Dallas-based Trammell Crow. Crow's career as a developer from the 1940s to the 1980sreflects the growth of the oil-wealth Texan economy, both in its successes and near-failures. Crow's business grew rapidly because he kept construction costs under control and his rate of construction expeditious, while leveraging his real estate developments to an extraordinary degree. Careful organization and strategic planning were unnecessary as long as ordinary fiscal prudence, combined with a trustworthiness that could be appreciated tangibly by business peers and bankers, were paramount. These were the hallmarks of Crow's experience, and the hallmarks of virtually all other highly successful urban developers in the modern era, such as the Reichmann brothers of Toronto.4 Organizational overhead in Crow's operations was kept to an absolute minimum, since the entire business was run through a network of contractual obligations. Rather than increasing the scale and complexity of his organization as the scope of his operations increased, Crow undertook a series of partnership arrangements by which associates used his name as an umbrella and guarantee, worked up their own deals, and cut him in for a share of the profit. However, when a systemic nation-wide economic slow-down occurred, Crow's loose, dynamic, money-making organism, with its mix of 886 partnerships and corporations, faced enormous difficulties. Money commitments backed up through the various unlinked tentacles: the bulk of the debts were short-term, floating-rate loans, while the obligations were often long-term. No central accounting mechanism had kept track of those obligations. The highly-leveraged real-estate empire suffered under the pressure of inflation, high interest rates and recession--the stagflation of the mid-1970s. What permitted Crow to survivethis insolvency?At root, Sobel argues, his survivaldepended on the trust and honour which bound together the web of personal relations he had developed with his partners and with lending institutions. On this basis, the partnerships first undertook extensive debt consolidation and reduction procedures, followed...