not published in English.
Q: The foundational research by the lateHBS professor Alfred Chandler isacknowledged in essays throughout the book,but is also sometimes contradicted. How havecurrent research agendas built upon ormoved beyond Chandler's work?A:
The foundational nature of Al Chandler'sresearch is widely confirmed throughout theessays of the
. Chandler was primarily concerned with understanding thegrowth of large, diversified, and professionallymanaged firms from the late 19th century. Thegrowth of big business, and its role ingenerating innovation and wealth, remains acentral topic of research in business history,reflecting of course its continued importancetoday.Yet it is immediately apparent from thetitles of the 25 chapters in the book that business historians have become concernedwith a much wider set of issues. Some of these,such as marketing, entrepreneurship, and therole of the state, also concerned Chandler, butthey were not central to his concerns. There arealso chapters on topics that Chandler had littleor nothing to say, including corporategovernance, industrial districts, businessgroups, business culture, business education,skill training, accounting and informationsystems, design and engineering, and so on.Business history has widened its scopeenormously in the last two decades.A striking feature of the research reviewedin the
is that so much of it concernsthe period since 1950. Chandler's primaryhistorical research covered the era between1850 and 1950, when big business emerged andgrew spectacularly, and when the United States became the world's largest economy. There isan underlying assumption in Chandler's work that the United States and large, professionallymanaged firms represent the normative modelto which the rest of the world is marching as aresult of the imperatives of technology andmarkets. Over the last two decades, as the boundaries of firms became much more fluidand as non-U.S. players became much moreimportant, it has become clearer that in fact theclassic Chandlerian firm should be better seenas the product of a specific historical era and a particular place, essentially the United States.The chapter on family firms shows that theycould be as successful or more so than themanagerial firms that Chandler considered to beoptimal. The chapters on business groups andeven cartels treat them as valid and oftensuccessful forms of business enterprise rather than inferior options to large, verticallyintegrated firms.
Q: Is there a major theme runningthrough the book?A:
For me, a major theme is the importanceof historical knowledge in truly understanding business, and how the growing ahistoricalnature of much management and economicsliterature has seriously compromised itslegitimacy.In a well-documented process, the spread of quantitative and standardized social sciencemethodologies has driven business andeconomic historians from economicsdepartments and journals, and from manysecond-tier business schools. This loss of history has resulted in the spread of influentialtheories based on ill-informed understandingsof the past. As Gary Herrigel's chapter oncorporate governance argues, much of thecontemporary literature distinguishing sharply between dispersed/outsider (e.g., UnitedStates/United Kingdom) andconcentrated/insider systems (e.g.,Germany/Japan) is problematic, because inreality countries have historically both moved between different systems and, moreimportantly, combined elements of differentsystems for long periods.
"The history of globalization warns against easy assumptions on thelinearity of globalization."
Another instance is the highly influential"law and economics" literature, whichemphasizes the importance of the common lawtradition in protecting minority shareholders incontrast to the civil law tradition, and instimulating financial and economicdevelopment. This has sometimes been used toexplain why the United States performed somuch better economically than Latin America.Yet there is now a formidable amount of evidence from business history, not least theoutstanding research by Harvard BusinessSchool's Aldo Musacchio in the BGIE Unit,showing that this hypothesis has little empiricalsupport. A careful study of 19th-century Frenchand American law, for example, found littledifference between the two countries in thelegal system's responsiveness to businessorganizational needs. Indeed, U.S. law offeredentrepreneurs fewer options on how to organizetheir businesses.
Q: In an essay you write that"globalization is a central issue, and perhapsthe central issue, in business history." Whathave business historians contributed to thestudy of globalization, and what can theycontribute to our current understanding?A:
It is seldom recognized how early business historians have been in identifyingissues that later become highly fashionableamong management scholars.Of course it is well-known how muchstrategic management and the resource-basedtheory of the firm owe to Chandler, but thereare other important examples. For example,during the 1950s Harvard's Research Center inEntrepreneurial History, organized by HBS business historian Arthur Cole, laid thegroundwork for the academic study of entrepreneurship.The study of globalization provides another example. Mira Wilkins published a major studyof the globalization of Ford in 1964, only four years after the word "multinational" was coined.Her study of the growth of Americanmultinationals from the colonial era to 1914was published in 1970. Its analysis of why andhow firms globalize would only be much later formalized in the economic theory of themultinational enterprise, and it would take afurther 20 years before the mainstreameconomics profession would identifyglobalization and global firms as a topic of realimportance.
"Many of the most pressing unanswered questions inbusiness history center around entrepreneurship."
A succession of other "firsts" followed,including major studies of the globalization of services whilst most of the literature remainedfocused on manufacturing, and of diasporaentrepreneurship years before it became of interest because of recent attention on Indianand Chinese entrepreneurs in the United Statesand elsewhere.As I write in my essay in the
, andhave explored in other work with my HBScolleague Tarun Khanna, the history of globalization delivers a rich set of data for current debates and literature on globalization.At the crudest level, historical evidence avoidsspurious labeling of some phenomena as "new,"and by so doing can challenge currentexplanations of their determinants. Historicalevidence is crucial to exploring the causalrelationship between foreign direct investmentand long-run economic development. Today'sworld policy advice to all countries, and evenmore so to poor ones, is to open their borders toforeign multinationals because they willgenerate wealth and growth. The historicalevidence shows clearly that this is an article of faith rather than proven by the historicalevidence of the past. Or more precisely, therehave been a wide variety of outcomes, but one persistent generalization is that foreign directinvestment does not bring sustainabledevelopment unless the host country has a business system that is able to learn and absorbnew knowledge, and an appropriate public policy framework.At the broadest level, the history of globalization warns against easy assumptionson the linearity of globalization, as businesshistorians have shown how the world globalized
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