Scale and Scope
The Dynamics of Industrial Capitalism
- List of Tables*
- List of Figures**
- I. Introduction: Scale and Scope
- 1. The Modern Industrial Enterprise
- 2. Scale, Scope, and Organizational Capabilities
- The New Institution
- Historical Attributes
- Economies of Scale and Scope in Production
- Economies of Scale and Scope in Distribution
- Building the Integrative Hierarchy
- First-Mover Advantages and Oligopolistic Competition
- Continuing Growth of the Modern Enterprise
- Horizontal and Vertical Combination
- Geographical Expansion and Product Diversification
- The Modern Enterprise in Labor-Intensive Industries
- II. The United States: Competitive Managerial Capitalism
- 3. The Foundations of Managerial Capitalism in American Industry
- The Domestic Market
- The Impact of the Railroads and Telegraph
- The Revolution in Distribution
- The Revolution in Production
- Branded, Packaged Products
- Mass-Produced Light Machinery
- Electrical Equipment
- Industrial Chemicals
- Metals
- Merger, Acquisition, and Rationalization
- Political and Legal Responses
- The Response of Financial Institutions
- The Response of Educational Institutions
- The Coming of Competitive Managerial Capitalism
- 4. Creating Organizational Capabilities: Vertical Integration and Oligopolistic Competition
- Oil: From Monopoly to Oligopoly
- Creating the Monopoly
- Changing Markets and Sources of Supply
- Vertical Integration and Oligopolistic Competition
- Rubber: A Stable Oligopoly
- Industrial Materials: Evolutionary and Revolutionary Technological Change
- Paper
- Stone, Clay, Glass, and Cement
- Fabricated Metals
- Primary Metals: Technology and Industrial Concentration
- Aluminum
- Copper and Other Nonferrous Metals
- Steel
- Major Trends
- 5. Expanding Organizational Capabilities: Investment Abroad and Product Diversification in Food and Chemicals
- Branded, Packaged Products: Foods, Consumer Chemicals, Tobacco
- General Characteristics
- Selecting the Players, 1880 to World War I
- Continuing Investment in Marketing and Distribution
- Expansion through Direct Investment Abroad
- Continuing Growth through Diversification
- Diversification through Merger
- Perishable Products
- Scope-Related Growth
- Industrial Chemicals
- General Characteristics
- The Players Selected
- Continuing Growth through Diversification
- Diversification through Merger
- The Du Pont Example
- Diversification, Organizational Complexity, and Managerial Control
- 6. Expanding Organizational Capabilities: Investment Abroad and Product Diversification in Machinery
- General Characteristics
- Nonelectrical Machinery
- The Players Selected
- Continuing Growth though Expansion Abroad
- Growth through Diversification
- Transportation Equipment
- The Players Selected
- Expansion Abroad
- Growth through Diversification
- Electrical and Electronic Equipment
- The Players Selected
- Expansion Abroad
- Growth through Diversification
- Organizational Complexities and Managerial Control
- The Dynamics of Modern Industrial Enterprise: The American Experience
- III. Great Britain: Personal Capitalism
- 7. The Continuing Commitment to Personal Capitalism in British Industry
- Underlying Differences
- Prototypes of British Industrial Enterprise: Cadbury Brothers and Imperial Tobacco
- Domestic and Foreign Markets
- The Impact of the Railroads
- The Revolution in Distribution
- The Revolution in Production
- Entrepreneurial Success: Branded, Packaged Products
- Entrepreneurial Success: Rubber, Glass, Explosives, Alkalies, and Fibers
- Entrepreneurial Failure: Machinery, Electrical Equipment, Organic Chemicals, Electrochemicals, and Metals
- Accounting for Entrepreneurial Failure
- Growth through Merger and Acquisition, British Style
- Continuing Dominance of Personal Management
- 8. Creating Organizational Capabilities: Success and Failure in the Stable Industries
- The Impact of World War I
- The Modern Industrial Enterprise during the Interwar Years
- Oil: The Creation of Organizational Capabilities
- Rubber: The Enhancement of Organizational Capabilities
- Industrial Materials: Organizational Capabilities Constrained by the Ways of Personal Management
- Rayon
- Stone, Clay, and Glass
- Paper
- Metal Fabricating
- Metal Making
- Textiles
- Costs of the Failure to Develop Organizational Capabilities
- 9. Creating Organizational Capabilities: Success and Failure in the Dynamic Industries
- Machinery
- Nonelectrical Machinery: Continuing Foreign Dominance
- Transportation Equipment
- Electrical Equipment: Catching Up
- Industrial Chemicals
- The Personally Managed Firms
- Imperial Chemical Industries: Organizational Achievement
- Branded, Packaged Products
- The Bastion of the Family Firm
- Expansion Overseas and Product Diversification
- Perishable Products
- Unilever: From Personal to Collective Management
- Implications of the British Experience
- IV. Germany: Cooperative Managerial Capitalism
- 10. The Foundations of Managerial Capitalism in German Industry
- Similarities and Differences
- Two German Industrial Enterprises: Gebrüder Stollwerck and Accumulatoren-Fabrik AG
- Domestic and Foreign Markets
- The Impact of the Railroads
- The Railroads and the New Financial Institutions
- Changes in Distribution
- The Legal and Educational Environment
- The Coming of Cooperative Managerial Capitalism
- 11. Creating Organizational Capabilities: The Lesser Industries
- The Second Industrial Revolution
- Branded, Packaged Products: Limited Entrepreneurial Response
- Other Lesser Industries: Effective Entrepreneurial Response
- Oil: Late Challengers
- First Movers, European Style: Rubber, Rayon, Alkalies, and Explosives
- First Movers, American Style: Light, Mass-Produced Machinery
- The German Entrepreneurial Response in the Lesser Industries
- Textiles: A Labor-Intensive Industry
- 12. Creating Organizational Capabilities: The Great Industries
- Nonelectrical Machinery: Exploiting Economies of Scope
- Electrical Machinery: Exploiting Economies of Scale and Scope
- Siemens and AEG: Creating Industrial Giants
- Merger and Rationalization
- Chemicals: Exploiting Economies of Scope
- The Dye Makers: Creating Capabilities
- The Dye Makers: Interfirm Cooperation
- Other World Leaders in Pharmaceuticals, Agricultural Chemicals, and Electrochemicals
- Metals: Exploiting Economies of Scale
- First Movers in Nonferrous Metals
- Steel: Europe’s Leaders
- Organizational Capabilities and Industrial Power
- 13. War and Crises: Recovery in the Lesser Industries
- War and Postwar Crises
- Impact on Interfirm Relationships
- The Growth of I.G.’s and Konzerne
- The Changing Role of Banks
- Recovery in the Lesser Industries after Stabilization
- Branded, Packaged Products and Textiles: Weak Recovery
- Oil: Dismemberment
- Rubber, Rayon, Alkalies, Explosives, and Light Machinery: Strong Recovery
- Transportation Equipment: A New Start
- Recovery as a Function of Organizational Capabilities
- 14. Recovery in the Great Industries
- Nonelectrical Industrial Machinery: Revival and Rationalization
- Electrical Machinery
- Rapid Recovery and Continued Modernization
- The Evolving Structure of the Leaders
- Metals
- Steel: Merger, Rationalization, and Restructuring
- Nonferrous Metals: The Return of Metallgesellschaft
- Chemicals
- The Formation of I.G. Farben
- Rationalization at I.G. Farben
- I.G. Farben’s Changing Structure: Failure to Achieve Overall Control
- The Independents
- The German Experience: The Evolution of Cooperative Managerial Capitalism
- Conclusion: The Dynamics of Industrial Capitalism
- Organizational Capabilities as the Core Dynamic
- First Movers and Challengers
- Challengers from Abroad and from Other Industries
- Post–World War II Developments
- The Transformation of the Global Economy
- Continuing Role of the Modern Industrial Enterprise
- Continuing Growth
- A New Era of Managerial Capitalism?
- Notes
- Credits
- Index
- * Tables
- 1. The world’s industrial production, 1870–1938
- 2. Long-term changes in shares of major sectors in total output, United States, Great Britain, and Germany
- 3. Long-term changes in shares of subdivisions of the industrial sector in total output, United States, Great Britain, and Germany
- 4. Long-term changes in the sectoral distribution of the labor force, United States, Great Britain, and Germany
- 5. The world’s largest industrial enterprises with more than 20,000 employees, by industry and country, 1973
- 6. The 200 largest industrial enterprises in the United States, by industry, 1917–1973
- 7. The 200 largest industrial enterprises in Great Britain, by industry, 1919–1973
- 8. the 200 largest industrial enterprises in Germany, by industry, 1913–1973
- 9. Population and GDP per capita at 1970 U.S. prices, United States, Great Britain, and Germany, 1870–1979
- 10. Manufacturers’ domestic distribution channels and concentration ratios in materials industries, 1929–1954
- 11. Percentage of total output produced by U.S. Steel Corporation, 1901–1927
- 12. Manufacturers’ domestic distribution channels and concentration ratios in labor-intensive industries, 1929–1954
- 13. Manufacturers’ domestic distribution channels and concentration ratios in the food, tobacco, and consumer-chemical industries, 1935–1954
- 14. Establishment of manufacturing operations in Great Britain by U.S. industrial enterprises, 1900–1971
- 15. Establishment of manufacturing operations in Germany by U.S. industrial enterprises, 1900–1971
- 16. Method of U.S. firms’ entry into Great Britain, 1900–1971
- 17. Method of U.S. firms’ entry into Germany, 1900–1971
- 18. Changes in shares of branches of manufacturing in output of total manufacturing grouped by rapidity of growth in initial period, United States, 1880–1948
- 19. Production of steel ingots and castings, by process, Great Britain, United States, and Germany, 1875–1914
- 20. The largest industrial enterprises in Great Britain in 1919, 1929, and 1948
- 21. The most important railway transactions of the Darmstädter Bank and the Disconto-Gesellschaft
- 22. Product line of the Maschinenfabrik Augsburg-Nürnberg (MAN) in the late 1920s
- 23. Rationalization in the production of Vereinigte Stahlwerke (VSt), 1933
- 24. Share of the U.S. market in the personal computer industry, 1976–1982
- 25. Multinational enterprises, classified by structure and by diversity of products made abroad for 162 American industrial enterprises, 1966
- ** Figures
- 1. The multiunit, multifunctional enterprise
- 2. The multidivisional structure
- 3. Organization chart of Armour & Company, 1907
- 4. Du Pont Company structure after the reorganization of 1911
- 5. Change in gross fixed assets of major U.S. steel companies, 1900–1950
- 6. Total advertising and selling expenses per dollar of net sales for 91 U.S. industries, 1940
- 7. Management of British Westinghouse in 1917
- 8. Management of Cadbury’s in the 1930s
- 9. ICI organizational chart, March 1931
- 10. Organization chart of Unilever Corporation, 1946
- 11. Organization chart of Accumulatoren-Fabrik (AFA), 1913
- 12. The Cologne factory of Maschinenbau-Anstalt Humboldt, 1916
- 13. Organization of Siemens & Halske, August 1930
- 14. Organization of Siemens-Schuckertwerke, August 1927
- 15. The historical background of Vereinigte Stahlwerke Aktiengesellschaft, 1926
- 16. Structure of Vereinigte Stahlwerke Aktiengesellschaft, 1934
- 17. Organization of I.G. Farben, 1930
- 18. Operating responsibilities of the members of the Central Committee of I.G. Farben after 1930
- 19. I.G. Farben’s total turnover in millions of RM, 1926–1939
Awards & Accolades
- Leo Melamed Prize for Outstanding Research in Finance, University of Chicago Graduate School of Business
Dumbarton Oaks Medieval Library
I Tatti Renaissance Library
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Murty Classical Library of India