The Modern Corporation and Private Property Corporation strategy and structure are arguably important aspects of any modern that need to be clearly understood. Corporation strategy could easily fit the description of being the visible hand of contemporary capitalist economies. A Whig or classical liberal history of the corporation and modern business history contends that the old style liberalism of 18th century Britain and 19th century US has made a significant contribution to the development of modern businesses. The Whig history was one that stressed the primacy of the private sector and the absence of the state from intervening in national economies.
Classical liberal theory stressed that economies should operate free trade practices, and emphasised that only the fittest corporations would survive. In the last half of the nineteenth century a new form of capitalism appeared in the United States and Europe. .. came into being a new economic institution, the managerial business enterprise, and a new species of economic man, the salaried manager. With their coming the world received a new type of capitalism - one in which the decisions about current operations, employment, output and the allocation of resources. ..
Chandler and the Corporation The Corporation was able to develop as a profit making organization via the three pronged investment strategy: 1. Production – making goods more efficiently than rivals 2. Marketing – the ability to sell all goods or services more effectively than rival businesses 3. Management – the capacity to run production, labor, marketing, and resources more effectively than all rival businesses. The corporations that succeeded were generally technologically driven as well as claiming to have reaped the First mover advantage.
Later corporations had the opportunity to take advantage from the Second industrial revolution. The Chanderierian Narrative or in other word his analysis of the invisible hand of the market vs. the visible hand of management debate. Chandler’s analysis evaluates the Williamsonian story of internalization, economies of scale and scope that arguably realized through the separation of ownership and control. Chandler then goes on to discuss the strategic and structural implications through the M – Form.
The corporation invokes strong associations - profit, efficiency, technology. It also conjures up a number of the anxieties - about bureaucracy, economic power, and insularity. ’1 For more than a century, the corporation has been the pre-eminent economic institution in the worlds capitalist economies. ’ Liparito and Sicilia, Constructing Corporate America (2004), pg1 The US and competitive managerial capitalism was the country that allowed its corporations the most freedom in terms of their decision-making and how they acted in relation to their rivals. It was apparent to any thoughtful observer that the American corporation had ceased to be a private business device…’2 There are points that Chandler made about corporate management differing in various countries.
For example Britain and the persistence of personal capitalism, Germany and co-operative managerial capitalism, Japan and networked capitalism - from Zaibatsu to Keiretsu, State-led capitalism, from Korean Chaebol to Chinese market socialism There are actually valid alternatives to the processes linked to the concept of mass production. Perhaps most notably flexible specialism in corporation management such as that could be found in the Italian industrial districts like Turin. The viewpoint from 2008 was that until the onset of the credit crunch that the majority of the largest corporations had the ability to make substantial global profits.
The Chandlerian narrative is much more complicated or complex in reality. There are not one but many forms of corporation management approaches. 3 The corporation not a naturally occurring, purely economic institution. Instead corporations are socially, culturally, politically constructed reflecting the country and the time period in which they are established. Geographically and temporally contingent and specific are the qualities that hopefully result from effective management of modern corporations.
There are certainly externalities or spill over effects when it comes down to modern corporations, that have believed themselves to be increasingly powerful, and unwilling to put up with state intervention (prior to the credit crunch at least). As the guru of neo-liberalism Milton Friedman used to say The business of business is business. 4 There are some that contend that there should be Managerial morality within corporations. Aladair MacIntyre has argued that contemporary corporations prefer to concentrate on external goods such as status, or possession rather than internal ones.
In American society over all MacIntyre also contends that happiness whether on corporate or personal levels is equated with material utility. The drawbacks with modern capitalism include disembodied and faceless activities (everything is merely reduced to numbers/algorithms) not to mention the inhuman instruments of consumption and production. 5 Bibliography Alfred D. chandler and the history of the Corporation