The Chandler Thesis—Some General Observations

  • Bernard W. E. Alford


Over the past twenty-five years there has been a steady accumulation of historical case studies of British companies which, in themselves, have shown an increasing level of sophistication of analysis; but this has not been matched by related efforts at building up a more general explanation of the process of change in business organisation and development. It may be that one reason for this is that the tradition of the heroic (or notorious) entrepreneur has exercised a strong influence on business historians. Moreover, there has been a somewhat uncritical reliance on certain concepts drawn from formal economic theory. The classical theory of the firm has been a favourite hunting ground; and although its assumptions have been steadily, and by now almost completely, undermined by empirical investigation, it is significant — and regrettable — that business historians have not played a major role in this process.1 Yet the outlines of an alternative, independent and, dare it be said, potentially very profitable line of approach was indicated some years ago by two important books: E. T. Penrose, The Theory of the Growth of the Firm (1959) and A. D. Chandler, Strategy and Structure (1962).2 Very recently, however, there have been signs — of which this symposium is one — of a growing interest among business historians in developing the approaches of Penrose and Chandler in the light of accumulating historical evidence.


Market Power Business Performance Business Organisation Business Development Modern Management 


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  1. 1.
    See P. J. Devine, An Introduction to Industrial Economics (Allen & Unwin, 1974) pp. 108–292, for a recent survey of the current state of the theory of the firm.Google Scholar
  2. 1a.
    See also John H. Dunning (ed.), Economic Analysis and the Multinational Enterprise ( Allen & Unwin, 1974 ). This book includes a very useful bibliography.Google Scholar
  3. 7.
    See J. Kocka, ‘Family and Bureaucracy in German Industrial Management, 1850–1914…’, Business History Review, xlv (1971) 133–56.CrossRefGoogle Scholar
  4. 9.
    These terms are developed in more detail in Alfred D. Chandler Jr and Herman Daems, ‘The Rise of Managerial Capitalism and its Impact on Investment Strategy in the Western World and Japan’, in Herman Daems and Herman van der Wee (eds), The Rise of Managerial Capitalism (Martinus Nijhoff, The Hague and Leuven University Press, Belgium, 1974) pp. 1–34 but particularly pp. 5–6.Google Scholar
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    A general examination covering this period has been made by D. F. Channon, The Strategy and Structure of British Enterprise (Macmillan, 1973); see also Derek F. Channon, ‘Corporate Evolution in the Service Industries’, pp. 213–34 below.Google Scholar
  6. 13.
    A study of some of the literature in this field would seem to me to be of value to business historians. A useful introductory survey is provided by Peter M. Blau and W. Richard Scott, Formal Organisations: A Comparative Approach (Routledge and Kegan Paul, 1963 ).Google Scholar
  7. 14.
    W. J. Reader, Imperial Chemical Industries — a Historyii (London: Oxford University Press, 1975) pp. 143–4. I am grateful to Professor Payne for allowing me to cite the example relating to Scottish steel firms.Google Scholar
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    For example the sort of things I have in mind are surveyed in R. M. Cyert and J. G. March, A Behavioural Theory of the Firm (Prentice-Hall, 1963 );Google Scholar
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    H. Igor Ansoff (ed.), Business Strategy (Penguin, 1969 ).Google Scholar
  10. 17.
    Alfred D. Chandler Jr, ‘The Multi-Unit Enterprise: A Historical and International Comparative Analysis and Summary’, in Harold F. Williamson (ed.), Evolution of International Management Structures ( University of Delaware Press, Newark, 1975 ) pp. 251–2.Google Scholar
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    See Duncan Burn, The Economic History of Steelmaking 1867–1939 (Cambridge University Press, Cambridge, 1961) pp. 441–3 and generally pp. 393–515;Google Scholar
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    John Vaizey, The History of British Steel (Weidenfeld & Nicolson, 1974) pp. 20–87.Google Scholar
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    See N. K. Buxton, ‘Entrepreneurial Efficiency in the British Coal Industry between the Wars’, Economic History Review, 2nd ser., xxni (1970);Google Scholar
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    B. W. E. Alford, Depression and Recovery? British Economic Growth,1918–1939 (Macmillan, 1972 ) pp. 45–56.Google Scholar
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    Supple, op. cit., p. 60. See also B. W. E. Alford, W. D. & H. O. Wills and the Development of the U.K. Tobacco Industry, 1786–1965 (Methuen, 1973), pp. 247–77 for a detailed analysis of the major ‘happening’ of the so-called amalgamation movement.Google Scholar
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    See Anthony Sampson, The Seven Sisters: The Great Oil Companies and the World They Made ( Hodder and Stoughton, 1975 ). A somewhat racy account but, nevertheless, a revealing one.Google Scholar

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© Palgrave Macmillan, a division of Macmillan Publishers Limited 1976

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  • Bernard W. E. Alford

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