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Commercializing High-Technology Industries

Published online by Cambridge University Press:  13 December 2011

Alfred D. Chandler Jr
Alfred D. Chandler Jr
Affiliation:
ALFRED D. CHANDLER JR. is Isidor Straus Professor of Business History, Emeritus, atHarvard Business School.
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Extract

In his article “From Firm to Networked Systems,” Thomas Hughes introduces concepts, such as “infrastructure” and “networking,” that are critical to today's managerial system, but, by focusing on electric utilities, the story he tells does not go beyond the arrival of the new science of electronics in the early twentieth century. Professor Hughes, therefore, does not consider the critical role of high-technology industries–that is, those that commercialized and brought to market new products based on new scientific learning—in exploring the evolution of managerial systems.

Type
Articles
Information
Business History Review , Volume 79 , Issue 3 , Autumn 2005 , pp. 595 - 604
Copyright
Copyright © The President and Fellows of Harvard College 2005

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References

1 Neither, by the way, did Naomi Lamoreaux, Daniel Raff, and Peter Temin, in “Beyond Markets and Hierachies: Toward a New Synthesis of American Business History,” published in the American Historical Review. They argue, “[B]y the 1980s, classic Chandlerian firms frequently were being outperformed, even in their core businesses, by more specialized, vertically disintegrated rivals,” so a “new synthesis” must be made to modify Chandler's framework. But, they continue, “we aim to do more than that–to provide an alternative methodology for writing business history that avoids the tendency (exemplified by Chandler but also generally characteristic of the field) to view the present as the final stage in an evolutionary process and thus, effectively, the end point of business history.” For a trained historian, though possibly not for a theorist, this statement is absurd. Their new synthesis in American Business History portrays “a New Economy” dominated by small specialized enterprises. Certainly in this age of global capitalism and multinationals, one that has been evolving since the 1880s, their view violates historical reality. Lamoreaux, Naomi R., Raff, Daniel M. G., and Temin, Peter, “Beyond Markets and Hierarchies: Toward a New Synthesis of American Business History,” American Historical Review 106 (April 2003): 404–33CrossRefGoogle Scholar.

2 This two-book series appears under the rubric “Paths of Learning: The Evolution of High Technology Industries Worldwide.”

3 Chandler, Alfred D. Jr, The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977)Google Scholar, and Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass., 1990)Google Scholar.

4 Dutton, William S., Du Pont: 140 Years (New York, 1959), vol. 3, ch. 5Google Scholar.

5 Nightingale, Paul, “The Economies of Scale in Experimentation: Knowledge and Technology in Pharmaceutical R & D,” Industrial and Corporate Change 9 (June 2000): 315–59CrossRefGoogle Scholar.Whittington, Richard and Mayer, Michael, The European Corporation: Strategy, Structure, and Social Science (London, 2000), 124Google Scholar.

6 A striking example of the potentially destructive nature of the conglomerate is the decision of the senior executives at the Radio Corporation of America (RCA), the creator of both audio and video, to adopt a strategy of unrelated diversification, a decision that destroyed not only their company but also the American audio and video industry.

7 On innovation in the 1920s, see Thomas Nicholas, “Why Schumpeter Was Right: Innovation, Market Power, Creative Destruction in the 1920s,” Journal of Economic History (Dec. 2003): 1023–58. For a parallel situation, see the paragraph on concatenation in the computer industry on page 603.

8 Chandler, Alfred D. Jr, Shaping the Industrial Century: The Remarkable Story of the Evolution of the Modern Chemical and Pharmaceutical Industries (Cambridge, Mass., 2005), 236–57CrossRefGoogle Scholar.

9 Chandler, Shaping the Industrial Century, 13–14. My goal is to explain the successes and failures of the individual companies in terms of technological innovation and financial return.

10 Chandler, Alfred D. Jr, Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industries (New York, 2001), ch. 2, esp. pp. 21–34, on RCA's becoming a conglomerateGoogle Scholar.

11 Ibid., 51–72.

12 Ibid., 91–94.

13 Ibid., 118.