The Visible Hand
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The Visible Hand : The Managerial Revolution in American Business

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The role of large-scale business enterprise--big business and its managers--during the formative years of modern capitalism (from the 1850s until the 1920s) is delineated in this pathmarking book. Alfred Chandler, Jr., the distinguished business historian, sets forth the reasons for the dominance of big business in American transportation, communications, and the central sectors of production and distribution. The managerial revolution, presented here with force and conviction, is the story of how the visible hand of management replaced what Adam Smith called the 'invisible hand' of market forces. Chandler shows that the fundamental shift toward managers running large enterprises exerted a far greater influence in determining size and concentration in American industry than other factors so often cited as critical: the quality of entrepreneurship, the availability of capital, or public policy.show more

Product details

  • Paperback | 624 pages
  • 157.48 x 233.68 x 30.48mm | 884.5g
  • HARVARD UNIVERSITY PRESS
  • The Belknap Press
  • Cambridge, Mass., United States
  • English
  • Revised ed.
  • 11 tables, 13 line illustrations, 2 maps
  • 0674940520
  • 9780674940529
  • 350,240

Review quote

Chandler's book is a major contribution to economics, as well as to business history, because it provides powerful insights into the ways in which the imperatives of capitalism shaped at least one aspect of the business world--its tendency to grow into giant companies in some industries but not into others. -- Robert L. Heilbroner New York Review of Books This very important work of historical synthesis by Harvard's premier business historian should be read not only by economists and historians, but also by middle and top managers of the modern, integrated corporation. Library Journal The Visible Hand is a revolutionary work. Business history in the past was largely about entrepreneurs--either as 'robber barons' or 'industrial statesmen.' Chandler shifts the spotlight from the promoters to the managers...The Visible Hand is a superb book--a triumph of creative synthesis. New Republic A monumental effort summarizing much of what is known about the rise of the managerial class...Chandler deserves a wide audience. -- Susan Previant Lee New York Times Book Review Alfred Chandler has produced an extremely valuable account of the development of the large managerial firm. How--and why--did the visible hand of management supersede the invisible hand of market coordination? The study provides a rich empirical basis for work on the new frontier of industrial organization concerned with the determinants of the boundaries of the firm and the nature of interorganizational coordination in the large region between impersonal markets and complete integration. -- Victor P. Goldberg Journal of Economic Issues Business historians have tended to be more attracted by the great entrepreneurs--the robber barons of industry--than by the institutions they created. Professor Chandler has corrected this bias by writing a masterly account of the rise of the modern business enterprise and the methods of running it. Economistshow more

Back cover copy

The role of large-scale business enterprise-big business and its managers-during the formative years of modern capitalism is delineated for the first time in this pathmarking book.show more

Table of contents

* Introduction: The Visible Hand * Modern Business Enterprise Defined * Some General Propositions * Part I. The Traditional Processses of Production and Distribution *1. The Traditional Enterprise in Commerce * Institutional Specialization and Market Coordination * The General Merchant of the Colonial World * Specialization in Commerce * Specialization in Finance and Transportation * Managing the Specialized Enterprise in Commerce * Managing the Specialized Enterprise in Finance and Transportation * Technological Limits to Institutional Change in Commerce *2. The Traditional Enterprise in Production * Technological Limits to Institutional Change in Production * The Expansion of Prefactory Production, 1790--1840 * Managing Traditional Production * The Plantation--an Ancient Form of Large-Scale Production * The Integrated Textile Mill--a New Form of Large-Scale Production * The Springfield Armory--Another Prototype of the Modern Factory * Lifting Technological Constraints * Part II. The Revolution in Transportation and Communication *3. The Railroads: The First Modern Business Enterprises, 1850s--1860s * Innovation in Technology and Organization * The Impact of the Railroads on Construction and Finance * Structural Innovation * Accounting and Statistical Innovation * Organizational Innovation Evaluated *4. Railroad Cooperation and Competition, 1870s--1880s * New Patterns of Interfirm Relationships * Cooperation to Expand Through Traffic * Cooperation to Control Competition * The Great Cartels * The Managerial Role *5. System-Building, 1880s--1900s * Top Management Decision Making * Building the First Systems * System-Building in the 1880s * Reorganization and Rationalization in the 1880s * Structures for the New Systems * The Bureaucratization of Railroad Administration *6. Completing the Infrastructure * Other Transportation and Communication Enterprises * Transportation: Steamship Lines and Urban Traction Systems Communication: The Postal Service, Telegraph, and Telephone * The Organizational Response * Part III. The Revolution in Distribution and Production *7. Mass Distribution * The Basic Transformation * The Modern Commodity Dealer * The Wholesale Jobber * The Mass Retailer * The Department Store * The Mail-Order House * The Chain Store * The Economies of Speed *8. Mass Production * The Basic Transformation * Expansion of the Factory System * The Mechanical Industries * The Refining and Distilling Industries * The Metal-Making Industries * The Metal-Working Industries * The Beginnings of Scientific Management * The Economies of Speed * Part IV. The Integration of Mass Production with Mass Distribution *9. The Coming of the Modern Industrial Corporation * Reasons for Integration * Integration by Users of Continuous-Process Technology * Integration by Processors of Perishable Products * Intergration by Machinery Makers Requiring Specialized Marketing Services * The Followers *10. Integration by the Way of Merger * Combination and Consolidation * The Mergers of the 1880s * Mergers, 1890--1903 * The Success and Failure of Mergers *11. Integration Completed * An Overview: 1900--1917 * Growth by Vertical Integration--a Description * Food and Tobacco * Oil and Rubber * Chemicals, Paper, and Glass * The Metal Fabricators * The Machinery Makers * Primary Metals * Growth by Vertical Integration--an Analysis * The Importance of the Market * Integration and Concentration * The Rise of Multinational Enterprise * Integration and the Structure of the American Economy * Determinants of Size and Concentration * Part V. The Management and Growth of Modern Industrial Enterprise *12. Middle Management: Function and Structure * The Entrepreneurial Enterprise * American Tobacco: Managing Mass Production and Distribution of Packaged Products * Armour: Managing the Production and Distribution of Perishable Products * Singer and McCormick: Making and Marketing Machinery * The Beginnings of Middle Management in American Industry *13. Top Management: Function and Structure * The Managerial Enterprise * Standard Oil Trust * General Electric Company * United States Rubber Company * E.I. Du Pont de Nemours Powder Company * The Growing Supremacy of Managerial Enterprise *14. The Maturing of Modern Business Enterprise * Perfecting the Structure * The Professionalization of Management * Growth of Modern Business Enterprise Between the Wars * Modern Business Enterprise Since 1941 * The Dominance of Modern Business Enterprise * Conclusion: The Managerial Revolution in American Business * General Patterns of Institutional Growth * The Ascendancy of the Manager * The United States: Seed-Bed of Managerial Capitalism * Appendixes * Notes * Indexshow more

Review Text

A long look at big business in America from the 1840s to the 1920s, a period when large enterprises run by salaried executives replaced small family firms as stewards of the country's key commercial activities - production and distribution. The author's dominant, if not altogether original, theme is that economic necessities mothered a new generation of inventive managers who took the reins from Adam Smith's "invisible hand of market forces." These proto-organization men originated such techniques as assembly-line manufacturing, advertising campaigns to stimulate demand, national sales networks, mergers integrating corporate operations or eliminating competition, and, often, savage price rivalry. The way of the new administrators was greased, Chandler notes, by the enthusiasm of Wall Street financiers who found increasingly less profit dealing in the securities of railroad, telegraph, and telephone systems that originally opened mass markets. Supporting his case are detailed case studies of, among others, Duke's American Tobacco, Armour, McCormick Harvester, Singer Sewing Machine, and Rockefeller's Standard Oil Trust. Chandler observes, moreover, that the appurtenances of managerial professionalism - societies, journals, university training, and specialized consultants - which scarcely existed in the US around 1900 were flourishing after WW I. But how, he asks, can "narrowly trained managers" who control society's basic economic resources be made more accountable for their actions - a question to be dealt with, perhaps, in another book. Meanwhile, this represents a worthwhile addition to the history of American capitalism from a perceptive but still dispassionate analyst. (Kirkus Reviews)show more

About Alfred DuPont Chandler

Alfred D. Chandler, Jr., was Isidor Straus Professor of Business History at Harvard Business School.show more

Rating details

174 ratings
3.93 out of 5 stars
5 30% (53)
4 40% (69)
3 24% (42)
2 5% (8)
1 1% (2)
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