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Ten years in the making, Scale and Scope is Alfred
Chandler's first major book since his Pulitzer Prize-winning
The Visible Hand. This long-awaited volume carries
forward the theme of that keystone work in the continuing
evolution of a new institution -- the managerial business
system, where decisions are made by salaried managers, not
owners -- that was central to the growth of modern industrial
capitalism.
Scale and Scope concentrates on patterns
of industrial growth and competitiveness in three leading
industrial nations -- the United States, Germany, and Great
Britain. Chandler shows how large industrial firms developed
at the end of the nineteenth century through exploiting
economies of scale and scope, which required certain sets
of investments: in production facilities large enough to
secure cost advantages, in a national and international
marketing and distribution network, and in a management
organization capable of administering the new enterprises.
The first companies to make these investments and create
such an organization dominated their industries for decades,
capturing market shares from competitors, diversifying,
and expanding into markets abroad. The author chronicles
the competitive success of many enterprises, including such
American firms as General Electric, Goodyear, Du Pont, and
Borden, such British firms as Lever and Courtaulds, and
such German companies as Bayer and Siemens, which were responsible
for the swift ascent of Germany as Europe's most powerful
industrial nation in the years before World War I. They
played a critical part, too, in making American industry
the world's most productive in the interwar years. By the
same rules, he makes clear, the failure of British entrepreneurs
and enterprises to make investments and create the capabilities
necessary to compete at home and abroad was a major reason
for the rapid decline of the world's first industrial nation.
Alfred Chandler brings masterful insight
to the history of multinational enterprises, including such
key factors as diversification, oligopolistic competition,
the relationship between owners and managers, capital markets,
government regulation, and the effect of the educational
systems on industrial strength and competitiveness. His
matchless comparative analysis of the dynamic forces of
industrial capitalism that drove economic growth and transformed
national economies will reorient business and economic history
for years to come.
Alfred D. Chandler, Jr., is Isidor Strauss
Professor of Business History, Emeritus, at Harvard Business
School and winner of both the Bancroft Prize and the Pulitzer
Prize in History for The Visible Hand: The Managerial
Revolution in American Business (Harvard).
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