Neil Fligstein has made a significant contribution to our understanding of the historical development of large American firms. The book fills what had been a vacuum in that understanding by incorporating an explicitly institutional perspective. This perspective sheds particular light on the rise of large conglomerates in the late 1960s and the corresponding finance-driven short term outlook of top managers that has been associated with America’s declining competitiveness.

Fligstein portrays managers as people acting in a social world, a world of reference groups, power conflict, world views, constraints, organizations, and institutions—in stark contrast to the prevailing work on corporations, in which managers are portrayed as inhabiting an economic or technological milieu, a world of profits and loss, efficiency, innovation, economic cycles, economies of scale, and transaction costs… This is an important and outstanding contribution to the analysis of the American corporation and the development of a truly social sociology of the economy.

Fligstein gives proper recognition to the role of federal policy in creating the legal and regulatory setting within which business took and implemented their decisions about corporate growth and structure. And he emphasizes the ‘downside implications’ of a management culture and technique which have come to regard companies as simply bundles of measurable assets to be bought and sold, manipulated, squeezed, and stripped. Fligstein, therefore, has more to say about the current crises of American capitalism than Chandler can manage.