Wednesday, May 16, 2007

Opening the book on business history


LONDON, England (CNN) -- While business schools are renowned as dynamic academic institutions where eager students are fed the very latest in strategy and research, underpinning it all is many decades of thinking about the most fundamental questions of how companies work, and how they can work better.
One of the most influential figures in this process of understanding, a pioneer in the fields of business history and corporate strategy, was Harvard Business School's Alfred D. Chandler, who died this week aged 88.
In a career as extraordinary as it was long, Chandler produced some of the most significant ever studies of big business and its history, formulating ideas that are still used in MBA classes around the world today.
Chandler -- professor emeritus of business history at Harvard at the time of his death -- wrote dozens of books and articles which influenced scholars in not only management but also history, economics and sociology.
While his subjects and methods varied enormously, the central thesis was constant: How were things done at a certain time, how were they done later, and what happened to cause the change?
"Al Chandler created the field of business history and nurtured it at this school with the help of outstanding colleagues who worked closely with him and admired him as a mentor and friend," said the HBS's dean, Jay Light.
Throughout his books, Chandler looked at the factors that made the U.S. economy thrive in the late 19th and early 20th centuries, identifying things such as railroads, concentrated urban markets, mass production techniques and electrification.
Business strategy
In "Strategy and Structure," published in 1962, he examined four industrial giants from the 1900s to the 1940s -- General Motors, DuPont, Exxon, and Sears, Roebuck & Company -- and studied their organizational structures, helping give birth to the entire field of corporate strategy.
In the Pulitzer Prize-winning "The Visible Hand: The Managerial Revolution in American Business" from 1977, Chandler argued that the 'visible' hand of management had replaced the 'invisible' hand of market forces in coordinating and allocating the economy's resources.
There was little need for middle managers prior to 1840, he found, whereas by the mid-20th century the companies they administered had become the "most powerful institution in the American economy."
He also looked into different business approaches around the world through a historical context, and carried on working until the very end of his life.
In 2001 he wrote "Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industry," which contrasted the fall of the Radio Corporation of America (RCA) and the rise of Sony and Matsushita in Japan.
As late as 2005, he turned his attentions to a book on the global chemical and pharmaceutical Industries.
"Al Chandler was an extraordinary scholar whose research and publications over five decades exercised a transformational effect far beyond his own discipline in business history," said Geoffrey G. Jones, HBS's Straus Professor of Business History.
"Although he began his career as a traditional historian who labored long and hard in archives, his resulting insights on the growth of firms and the emergence of modern management were so compelling that he became a major formative influence on many areas of management studies."

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