Business History: Theory-Driven and Theory-Starved

BUSINESS HISTORY: THEORYDRIVENAND THEORY-STARVED John N. Ingham Alfred D. Chandler, Jr. Scale and Scope:The DynamicsofIndustrialCapitalism. Cambridge: Belknap Press, 1990. xviii + 860pp. Stuart Bruchy. Enterprise: TheDynamicEconomyof a FreePeople. Cambridge: Haivard University Press, 1990. xiv+ 645 pp. The two books under consideration here represent the culmination of the careers of two distinguished scholars. Both also deal with the history of American business. Beyond that, however, the two could not be more dissimilar. Whereas Chandler's Scale and Scope represents the apogee of a lifetime devoted to the exegesis of a new theory of business enterprise and growth, Bruchy's Enterpriseis a largely conventional narrative of business developments, no doubt aided by a lifetime of lecturing and research, which pursues no particularly coherent thesis beyond the nebulous and rather sophomoric idea that a "free people" have been able to convert their individual achievement and vertical social mobility into a dynamic capitalist system. Alfred Chandler's extraordinary influence on the development of business history during the past quarter-century invites extended comment. Born into a branch of the du Pont family, Chandler's most profound intellectual influence came from the sociologist Talcott Parsons at Harvard University. The insights of Max Weber and Emile Durkheim, which informed Parson's structuralism, also defined the intellectual focus of Chandler's later analyses of the American business system. A second major influence on Chandler's development was the Research Center in Entrepreneurial History at Harvard, which had been started in 1950 by Joseph Schum peter and Arthur Cole. Schumpeter's concepts of entrepreneurship and innovation became uppermost in Chandler's later studies, but he pursued these topics within an intellectual and ideological framework that was novel in business history,that of Parsonian structuralism. Whereas· Schumpeter had stressed the individual entrepreneur as the source of innovation in modern business, Chandler located the wellspring of change and creativity in group activity among teams of managers operating within 102 John N. Ingham management structures they had designed. It was Chandler's task to defme and elucidate these structures. Turning from the romantic stories of buccaneering, freebooting capitalists, Chandler concentrated instead on a forgotten breed--the heretofore faceless professional managers and bureaucrats who brought about profound changes within corporations, and in so doing effected dramatic influence on external market performance. Chandler's first major impact on business history came in 1959, when he published a seminal article entitled "The Beginnings of Big Business in American History" .1 That piece contained many of the elements that typified Chandler's later research: it was concerned with large, rather than medium or small enterprises; it was interested in the phenomenon of change and the dynamic factors that brought about that change; and it focused on the process of bureaucratic change within the corporation, rather than on the individual exploits of entrepreneurs. The article was also markedly non-judgemental about the actions of these managers and firms. This stance, so often castigated by Chandler's leftist critics, was an outgrowth of his training in structuralism, and of the ideological currents of the 1950s. Parsons, Daniel Bell and others had postulated the notion of a value-free social science, best expressed in Bell's End of Ideology.2 As a result, Chandler's writings have always had a conservative bias, accepting the corporate status quo without question or criticism, and refusing to speculate on alternative structures and policies. The 1959 article was followed in 1962 by Strategy and Structure, which contained in-depth comparative case studies of managerial performance at a number of major American corporations. 3 This book, virtually ignored by historians at the time, became a staple of business schools throughout North America. Corporate managers themselves fawned over the book, continually citing its maxim, "strategy precedes structure." Chandler's recognition and acceptance by "mainstream" American historians, and by the public generally, did not come until the publication of The Visible Hand in 1977.4 Awarded both the Bancroft and Pulitzer prizes, this complex and sophisticated analysis of the nation's managerial system--stressing the "visible" hand of management as a factor in economic growth, rather than the "invisible hand" of the marketplace--attained a readership denied Chandler's earlier writings. The success of...