1. WHAT A BIG BUSINESS IS?

2. ORIGINS AND EVOLUTION OF TYPOLOGIES

3. DIFFERENT CONTEXTS, DIFFERENT BIG BUSINESSES
4. DIFFERENT SECTORS, DIFFERENT STRATEGIES AND
STRUCTURES
Characteristics of BB: A.Chandler Jr.
1. US modern multi-unit business replaced small traditional enterprise, when
administrative coordination permitted better profits than the coordination by
market mechanism;
2. A managerial hierarchy was created for this multi-unit business enterprise;
3. Multi-unit business enterprise appeared for the first time in history in a time
when the volume of economic activities reached a level that made
administrative coordination more efficient than market coordination;
4. Multi-unit business enterprise grew in size and diversity and as its managers
became more professional, the management of the enterprise became
separated from its ownership;
5. As the large enterprises grew and dominated major sectors of the economy they
altered the basic structure of these sectors and of the economy as a whole.

KEY: SCALE AND SCOPE, MULTIDIVISIONAL STRUCTURE, PROFESSIONAL

HIERARCHY NOT LINKED TO OWNERSHIP, INTERNATIONALIZATION
definitions
Before 1914, more than 1,000 employeees (Kocka and
Horn 1979)

Around 1950s 10,000 employees and share capital of 5

million sterling pounds in Uk, FR, GER (Cassis 1997)

A consequence of previous revolutions in demand

(growth of population and purchasing power) and supply
(technological revolutions increasing productivity and
lowering production and transportation costs).
ORIGINS AND EVOLUTION
Preindustrial big companies: not professionally
managed?

During first industrial revolution 1830s-18890s: new

joint stock banks, railroad companies, insurance
companies

Second industrial revolution 1880s-1914: still railroad

companies, but also steel, chemicals, electricity, oil,
motor cars, rubber, machinery and consumer durables
(food, drink, tobacco). Economies of scale and scope.
Sharp differences between countries. Family firms
endure or become big corporations.
Different contexts, different
typologies of BIG BUSINESS 1900s-
1940s
USA

GERMANY

JAPAN
USA:
STATE PROTECTION BUT ALSO

ANTIMONOPOLY LEGISLATION,

CARTEL-FREE POLICIES (EXCEPT 1930S),

FREEMARKET,

PROPERTY RIGHTS PROTECTION,

PATENTS AND BRANDING A VENUE FOR INVESTMENT IN R&D&i,

CONSUMER GOODS FOR BIG DOMESTIC MARKET.

MORE VERTICAL AND HORIZONTAL INTEGRATION IN SPECIFIC

INDUSTRIES AND SERVICES

AND AFTER 1970S INCREASED DIVERSIFICATION

GERMANY:

STATE PROTECTION,

CARTELS,

BANKS,

HEAVY INDUSTRY,

DUMPING IN FOREIGN TRADE,

TECHNICAL EDUCATION ENSHRINED,

KINGDOM OF MITTELSTAND FIRMS

JAPAN:

STATE PROTECTION,

EARLY IMPORTED KNOW HOW FROM LEADERS

NETWORK BASED BIG BUSINESSES:

UNTIL 1945 ZAIBATSU,

AFTER 1950S KEIRETSU (BUSINESS GROUPS WITH STRONG

TRADING COMPANIES AND INDUSTRIAL COMPANIES WITH
A MAJOR BANK AND THE STATE TO SUPPORT BOTH).

INITIAL GREAT DIVERSIFICATION

PROGRESSIVELY SPECIALIZATION

LABOUR RELATIONS

STABILITY IN LINKS TO SUPPLIERS

RELUCTANCE TO INWARD FDI

 Sectors: different structures and
strategies
BANKS: NATIONAL PROVINCIAL BANK OF ENGLAND, CREDIT MOBILIER, BANQUE DE
PARIS ET DES PAYS BAS, BARING BROTHERS, FIVE ROTHSCHILD HOUSES (London,
Paris, Frankfurt, Vienna, Naples), DEUTSCHE BANK, JPMORGAN, BARCLAYS, BANK OF
AMERICA, CHASE MANHATTAN BANK

IRON AND STEEL INDUSTRIES: US STEEL, BETHLEHEM STEEL

CAR MANUFACTURING: FORD, GENERAL MOTORS, PEUGEOT, RENAULT, FIAT,

HISPANO-SUIZA, TOYOTA

CHEMICAL INDUSTRIES: IG FARBEN, DUPONT

ENERGY: GENERAL ELECTRIC, STANDARD OIL, WESTINGHOUSE

MACHINERY: HARVESTER, SINGER

FOOD, BEVERAGES, TOBACCO: UNILEVER, UNITED FRUIT COMPANY, IMPERIAL
TOBACCO
MINERALS: RIOTINTO, ANACONDA, ALCOA, PECHINEY