Strategy and Structure: Chapters in the History of the American Industrial Enterprise

by Alfred D. Chandler Jr.

"It is impossible in a bare outline to do anything like justice to thesubtlety (if also, sometimes, the prolixity) of the argument and to thewealth of telling instances with which it is illustrated. The argumentis not dogmatic or rigid and allows plenty of room for deviations,variants, and exceptions.... There is no doubt that this is a book offirst-class importance...significant, not only for its substantiveconclusions, original though these are, but as an example of the way inwhich fruitful relations can be established between economic andbusiness history." -- Journal of Economic History

This book shows how the seventy largest corporations in America havedealt with a single economic problem: the effective administration of anexpanding business. The author summarizes the history of the expansionof the nation's largest industries during the past hundred years andthen examines in depth the modern decentralized corporate structure asit was developed independently by four companies--du Pont, GeneralMotors, Standard Oil (New Jersey), and Sears, Roebuck.

This 1990 reprint includes a new introduction by the author.

Genres: Business, Management, History, Economics, Nonfiction, American History

480 pages, Kindle Edition

First published January 1, 1962

About the author

Alfred DuPont Chandler, Jr. was a professor of business history at Harvard Business School and Johns Hopkins University. Called "the Herodotus of business history," he wrote extensively about the scale and the management structures of modern corporations. His works redefined business and economic history of industrialization.

Reviews

[Haotian Xu · Rating 3 out of 5]

The short and sweet: I didn't like this book. But I think if I had grown up in a different generation that didn't just witness the largest global financial meltdown in history, I might have actually enjoyed what it had to say.

[Eric · Rating 4 out of 5]

Chandler again champions the professional manager, arguing that empire building entrepreneurs lacked the "talents and temperament" to create the structure necessary for the empire to thrive. He also dismisses stockholders and the board of directors as generally uninterested in and able to exercise only negative influence on corporate strategy and structure.

These professionals managers, Chandler writes, "did not control or even own large blocks of stock in the company that they managed"—yet, "their companies became their careers, their callings, and their lives." Economists writing long after this text instigated a revolution in the former, causing CEOs to become among the largest individual shareholders in their companies. This and other influences have encouraged managers to view the firm not as a calling or a life (though those promoted up the ranks naturally still do), but as a vehicle for the interests of diversified shareholders.

Managerial entrenchment undoubtedly breeds inefficient investments, but Chandler's histories always raise the question whether American industry could have been built with modern corporate governance. "A self-generating force for the growth of the industrial enterprise within a market economy like the United States has been the drive to keep resources effectively employed." Today, do the stock market and the market for corporate control over-discipline managers and scare them away from relentlessly employing—rather than returning—the firm's resources?

[Will Bell · Rating 3 out of 5]

That was quite a tedious slog. However it was moderately useful. It could have been half as long and still retained all the insight.

[John]

He says it concisely, “structure follows strategy".

[Maurice Halton · Rating 3 out of 5]

'Strategy followed Structure' - or was it the other way round?

[Kyle]

Kyle