Shaping the Industrial Century: The Remarkable Story of the Evolution of the Modern Chemical and Pharmaceutical Industries (Harvard Studies in Business History)

379 Pages·2005·0.89 MB·English

by  Alfred D. Chandler Jr.

HARVARD STUDIES IN BUSINESS HISTORY, 46
PublishedwiththesupportoftheHarvardBusinessSchool
EditedbyThomasK.McCraw
IsidorStrausProfessorofBusinessHistory
GraduateSchoolofBusinessAdministration
GeorgeF.BakerFoundation
HarvardUniversity

Alfred D. Chandler, Jr.
Shaping the
Industrial Century
The Remarkable Story of the Evolution
of the Modern Chemical and
Pharmaceutical Industries
HARVARD UNIVERSITY PRESS
Cambridge,Massachusetts,andLondon,England 2005
Copyright©2005bythePresidentandFellowsofHarvardCollege
Allrightsreserved
PrintedintheUnitedStatesofAmerica
LibraryofCongressCataloging-in-PublicationData
Chandler,AlfredDupont.
Shapingtheindustrialcentury : theremarkablestoryofthemodernchemicaland
pharmaceuticalindustries / AlfredD.Chandler,Jr.
p. cm.—(Harvardstudiesinbusinesshistory ; 46)
Includesbibliographicalreferencesandindex.
ISBN0-674-01720-X(alk.paper)
1.Chemicalindustry—UnitedStates—History. 2.Chemicalindustry—Europe—History.
3.Pharmaceuticalindustry—UnitedStates—History. 4.Pharmaceuticalindustry—Europe—
History. 5.Biotechnologyindustries—UnitedStates. I.Title. II.Series.
HD9651.5.C457 2005
338.4′766′00973—dc22 2004054320
Contents
Preface vii
Acknowledgments ix
I Overview
1 Differences,Concepts,Themes,andApproach 3
2 EvolvingPathsofLearning 19
II TheChemicalIndustry
3 TheMajorAmericanCompanies 41
4 TheFocusedAmericanCompanies 83
5 TheEuropeanCompetitors 114
6 TheAmericanCompetitors 144
III ThePharmaceuticalIndustry
7 TheAmericanCompanies:ThePrescriptionPath 177
8 TheAmericanCompanies:TheOver-the-CounterPath 213
9 TheAmericanandEuropeanCompetitors 230
10 CommercializingBiotechnology 260
vi Contents
IV PathsofLearning
11 TheThreeRevolutions:Industrial,Information,and
Biotechnology 283
Notes 315
Index 345
Preface
My previous book, Inventing the Electronic Century: The Epic Story of the Con-
sumerElectronicsandComputerIndustries,focusedonthecreationoftheinfra-
structureoftheInformationRevolutionbetweenthe1950sandthe1990s,a
revolutionthatwillcontinuetotransformlifeandworkonthisplanetover
thedecadestocome.Thepresentvolumeconcentratesontheevolutionof
tworelatedhigh-technologyindustriesoftheSecondIndustrialRevolution
after the completion of their infrastructure. Their infrastructure, as were
thoseofnearlyallmodernindustries,beganinthe1880swhentherailroad
andsteamship,thetelegraphandcable,madepossiblemassproductionand
distributionofgoodsandservicestonationalandinternationalmarkets.
By the 1920s the creation of the infrastructure had been completed. Of
thefiftyleadingchemicalcompaniesandthethirtyleadingpharmaceutical
companiesintermsofrevenuesinthe1990s,onlytwochemicalcompanies
hadenteredsuccessfullyandtheydidsoduringWorldWarII.Therefore,this
volume,whichreviewsthecreationofthechemicalandpharmaceuticalin-
frastructure, concentrates on the evolution of these eighty companies dur-
ingthenextseventyyears.
As a result, the hazards of writing what becomes contemporary history
areevengreaterthanwastrueinmyearlierbook.Ihadplannedtoendthe
stories of the individual companies in 1993, the year I began research on
thesetwohigh-techindustries.Writing,however,tookmoretimethanan-
ticipated, as it always does. Hence, I wrote postscripts at the end of some
chapters.Forexample,bythebeginningofthenewcentury,theattemptsof
themajorU.S.companiestoenterpharmaceuticalshadfailed.
Fortunatelyinmeetingthesehazardsthebusinesspresshadenhancedits
coverage.Thepresswasprovidingthestatisticalandinformationdatabase
viii Preface
from which the limited success and failure of the individuals in terms of
financialperformanceandinnovativesuccesscouldbeappraised.
NosourcewasmorevaluablethanHoover’sHandbooks,producedannually
since 1990 for both American and non-American companies. Each hand-
bookincludesaten-yearreviewofthecompanies’financialstatisticsanda
portfolio of their major product lines, with percentage of sales and income
fromtheselinesaswellasabriefresumeoftheirhistory.Hoover’sHandbooks
certainlyremainareliablebasicsourceforbusinessandeconomichistorians
tocarryouttheircentralanalyticaltasks.
Acknowledgments
Oftheseveralpersonswhomadepossiblethewritingofthisbook,themost
importantwerethetwotowhomIhavededicatedit—AnneO’Connelland
my wife, Fay Chandler. For many years Anne has transcribed my garbled,
dictated, handwritten copy into smooth, readable typescript, at the same
time keeping the numerous revisions of the text and the endnotes in their
proper order and place. Just as critical has been Fay’s constant encourage-
mentandsupport,aswereachedoursixtiethweddinganniversary.
TheinitialresearchandwritingwasachievedwiththeassistanceofTakashi
Hikino and Andrew von Nordenflycht. Before Takashi had to return to his
homeland,Japan,hisassistancewasessentialingettingthiswritingunderway,
aswellasinshapingtheinitialdraftsofthechapters.Andrewplayedascriti-
calaroleinthecompletionofthebook,particularlyinthosechapterscon-
cerningthechemicalstory.MaxHallcopyeditedtheinitialdraftsofchapters.
Lance Wickens did the same for the finished manuscript. I am indeed in-
debtedtoboth.EileenHankinsprovidedessentialsecretarialandlibraryser-
vices. At the front desk of my apartment building in Cambridge, Theresa
Hardyfaxedmessagesandcorrespondenceandassistedinotherways.
I am particularly indebted to Ralph Landau, who provided a valuable
learningexperienceataseriesofmeetingsatStanfordUniversityinprepara-
tionforthepublication(withAshishAroraandNathanRosenberg)ofChem-
icalsandLong-TermGrowth,publishedbyJohnWileyin1998.
IammostbeholdentoDavisDyer,thefoundingdirectoroftheWinthrop
Group, who made a careful review of the chemical story, as did Louis
Galambos of the pharmaceutical story. In addition, Davis persuaded me to
sharpen the focus of the book’s major themes. I continue to benefit from
RobertWallace’sadviceandsupport.
Manyhavecontributedtothisbook,butthefinaltextismine,andforitI
takefullresponsibility.