Scale and Scope: The Dynamics of Industrial Capitalism

782 Pages·1990·49.5 MB·English

by  Alfred D. Chandler

Scale and Scope

SCALE AND SCOPE
The Dynamics of Industrial Capitalism
ALFRED D. CHANDLER, JR.
with the assistance of
Takashi Hikino
THE BELKNAP PRESS OF
HARVARD UNIVERSITY PRESS
Cambridge, Massachusetts
London, England
Copyright©1990byAlfredD. Chandler,Jr.
Allrightsreserved
PrintedintheUnitedStatesofAmerica
Seventh printing, 2004
FirstHarvardUniversityPresspaperbackedi
tion, 1994
LilwaryofCongressCataloginginPublicationData
Chandler, AlfredDupont.
Scaleandscope: thedynamicsofindustrial
capitalism/AlfredD. Chandler,Jr., withthe
assistanceofTakashiHikino.
p. em.
Includesbibliographicalreferences.
ISBN0-674-78994-6(alk. paper) (cloth)
ISBN0-674-78995-4(pbk.)
1. Bigbusiness-UnitedStates-History. 2. Big
business-GreatBritain-History. 3. Big
business-Gennany-History. 4. Bigbusiness
Gennany(West)-History. I. Hikino, Takashi. II.
Title.
HD2785.C474 1990
338.6'44'09-dc20 89-36288
CIP
To the BusinessHistory Group
o/theHarvard Business SchofJ[
which contributedso much
to the makingofthis book

Note to the Paperback Edition
The Appendix Tables included in the original hardcover editionare omitted in
this paperback edition. The tables rank the 200 largest industrial enterprises
in the United States, Great Britain, and Germany by industry for three
different sets of years: a year around World War I, a year at the end of the
prosperity ofthe 1920s, and ayear at the beginningofthe post-WorldWar II
era. Ranking is based on the assets for the United States and Germany and
the market value of shares for Great Britain. The tables also contain the
productlines for each companylistedand the historicalturnoverofthe ranked
enterprises. Readers are encouraged to consult the tables available in the
hardcover edition.
Acknowledgments
Many have contributed over the past decade to the making ofthis book. The
GermanMarshallFundandtheAlfredP. SloanFoundationprovidedthefunding
needed to get the project under way. The Division of Research, Graduate
School of Business Administration, Harvard University, then supported the
project through its completion. I am greatly indebted to the heads of that
division-Richard S. Rosenbloom, E. Raymond Corey, andJay W. Lorsch
andtoDeans LawrenceA. FourakerandJohnH. McArthurfor theircontinued
enthusiastic support of the work. In addition, my research benefitted from a
stayatthe EuropeanInstituteforAdvancedStudiesinManagement, Brussels,
where Iwas avisitingprofessorin 1979.
Asinthepast, myresearchandwritinghavebeencarriedoutinatraditional
manner. Theyhavebeenpiecedtogetherfromreadinganddiscussingbusiness
records, government reports, other original sources, and a multitude of sec
ondary works. Thus the creative assistance of Takashi Hikino became indis
pensableinthewritingofthisbook. Hewasextraordinarilysuccessfulinlocating
information. His knowledge of economics was invaluable as we defined and
redefined concepts and generalizations. Scale andScope is indeed the product
ofa several-year partnership. Without Takashi Hikino it could not have been
written.
Other scholars made major contributions. Herman Daems worked closely
withmeininitiatingandcarryingoutresearchinEurope, andlaterinreviewing
thesuccessivechaptersheprovidedexcellentcriticismandsuggestions. Others
who read allorlarge parts ofthe manuscriptinclude RobertD. Cuff, David H.
Hounshell, William Lazonick, David C. Mowery, William N. Parker, Barry E.
Supple, Richard S. Tedlow, Richard H. K. Vietor, and Mira Wilkins. I am
particularlyindebted to BarrySupple for urgingme to indicate the importance
ofthe industriesanalyzedinthis bookinregardto economicgrowthandtrans-
Acknowledgments ix
formation, toThomas K. McCrawfor hiswiseadviceinthe shapingofthelast
chapter, toWilliamLazonickforhisinsistencethathumanskillsandmotivations
are central to any economic analysis, and to Mira Wilkins for her detailed,
careful, and very valuable review ofthe first full draft. Leslie Hannah, William
J. Reader, andStevenTollidayalladdedinsightsandinformationtothechapters
onBritain.
The chapters on Germanywereanevenmorecooperativeeffort. Givenmy
limitedgraspofthe language, HermanDaems, FranzMathis, ClemensVeren
kotte, and John Watt all played a central role in the translation of German
documents and books. Colleen Dunlavy, while in Germany doing her compar
ative study ofthe beginnings ofthe American and Prussian railroad systems,
locatedanumberofimportantsources. Herownworkprovidedessentialmate
rials for my brief review of German railway development. The chapters on
Germanyalso benefittedgreatlyfrom the comments and criticisms ofWilfried
Feldenkirchen, Gerald Feldman, Peter Hertner, Heidrun Homburg, ]iirgen
Kocka, and Robert Locke.
All the chapters ofthe bookwere presentedin the seminarofthe Business
HistoryGroupattheHarvardBusinessSchoolandinotherseminarsatHarvard
and a number of other universities. The constructive responses of the com
mentators and the participants ofthese seminars were invaluable. Particularly
usefulwere those ofRichard E. Caves, RichardS. Rosenbloom, andOliverE.
Williamson.
I also want to express my appreciation to the librarians and archivists who
helped carry out my research. Here the assistance ofLotharSchoenand Sig
fried von Weiher at the Siemens Archives inMunich, and ofPeter Gob ofthe
BayerArchives in Leverkusen, was all that a scholar could ask for in locating
the significant files and then in photocopying and mailing the selected docu
ments. ThiswasalsotrueofthehelpIreceivedfromA. M. FisherandMaureen
Staniforth at Unilever and from A. A. Cole, J. D. Cousin, and Sue Harvey at
ImperialChemicalIndustries. IamindebtedtoRonaldW. Ferrier, thehistorian
at British Petroleum, who furnished valuable information from the company
archives. IntheUnitedStates, thelibrariansattheHagleyLibraryinGreenville,
Delaware, andtheOwenD. YoungLibrary, St. LawrenceUniversity, provided
valuable documents. Most helpful of all was the Baker Library staff at the
HarvardBusinessSchoolwhoovertheyearsprovidedeverykindofassistance.
Iamgratefultothosewhoconstructedtheappendixtablesofthe200largest
industrial enterprises in the United States, Great Britain, and Germany. The
lists ofAmerican companies for 1930 and 1948 were compiled, and the com
panies classified byindustry, byRegina Pisa. The listfor 1917was basedona
publishedarticle byThomas R. NavinintheBusinessHistoryReview (Autumn
1970). All three tables ofBritish companies were originallycompiled by Mar
garet Ackrill, and the companies classified by industry by Peter Grant. The