Alfred Chandler

1918-Present

Who On Earth Is This Guy?
 Educator  Author  Historian

Guyencourt.Carol Ramsay  Born 1918 .Family History  Father .Married Fay Martin  Had Four Children .Alfred DuPont Chandler  Mother . Delaware  1944 .

Harvard  Bunch of Honorary Degrees .Graduated from Harvard College  1940-1945 .Education  1940 .Ph.Masters from Harvard  1952 . Commander  1947 .Navy .Lt.D.

Professor. MIT 1951-1964 Instructor . Center for Study of Recent American History  1971-1989 Straus Professor of Business History. Chair. Harvard  1989Emeritus      . MIT 1963-1971 Professor.Educator 1950-1951 Research Associate. Johns Hopkins 1966-1970 Dept. Johns Hopkins 1964-1971 Director.

Managerial Hierarchies (with Richard Tedlow) 1985. The Coming of Managerial Capitalism 1988. The Visible Hand (Pulitzer & Bancroft Prizes) 1980. Henry Varnum Poor 1962. Strategy and Structure (Newcomen Award. 1964) 1965. The Essential Alfred Chandler . Pierre S. duPont (with Stephen Salsbury) 1978. The Railroads 1971.Author         1956.

Historian          Economic History Association (President 1971-1972) Organization for American Historians Society for the History of Technology Historical Association American Antiquarian Society American Historians Massachusetts Historical Society American Academy of Arts and Sciences American Philosophical Society .

His Basis  Business Week  Historical Perspective .

Strategy and Structure  “Structure in big business enterprises follows strategy”  What is Strategy?  What Drives Changes in Strategy?  Multi-Purpose Divisional Structure  Role of Business Leaders  Key Impact on Large Industry .

Perspective .

The Visible Hand  Adam Smith  Business: Two Phases  Modern Business Is .

The Visible Hand  Fundamental Changes – Production – Distribution – Markets  Integration  Human Aspect .

Progression Founders Middle Managers Ownership (Diffused) Top Mgmt.The Visible Hand . Middle Managers .

Business Development  Second Industrial Revolution  Old Industries Transformed  New Industries Developed  Economic Growth and Development  International Expansion  Capital-Intensive Markets .

Non-Econ!  Theories of the Firm – Neoclassical Theory – Principal-agent Theory – Transactions Cost Theory – Evolutionary Theory .Organizational Capabilities  First Movers  Market Share Changes .

Organizational Capabilities  International Competition – Held Back by World Events – Reality in 1960’s  Core Competence – Diversification – Divestiture .

Profit Growth  Short-Term  Long-Term – Geographic – Product .

Criticisms  Strategy and Structure – Tom Peters – Mintzberg  The Visible Hand – Nothing noted about newer techniques – Nothing said of behavior sciences – Importance of the human element – Failure to provide evidence – Evaluation of social costs and benefits .

Summary  Historian  Studied Large Industrial Business History  Conclusions: – Structure Follows Strategy – Decentralized. Multi-Purpose Divisional Structure is Optimum – The ‘Visible Hand’ of Management has Taken the Place of Adam Smith’s ‘Invisible Hand’ of Market Forces (Market Economy vs. Managerial Capitalism) – Management has not basically changed since WWI .

Not by Price Competition – Firms (Physical and Human Assets) Are the Basic Unit of Historical Economic Analysis – Firms Should Stick to Their Core Competencies – Long-Term Profit Growth is Gained from Expansion into New Geographic or Product Markets .Summary  Conclusions: – Market Share Driven by Functional and Strategic Competition.

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