The Evil Caller Case Study
ALFRED CHANDLER, THE VISIBLE HAND BACKGROUND AND STUDY POINTS The US valorizes the free market and entrepreneurial skill, but capitalism is not the same in every country. Each nation has had its own path to industrial development. The American path was distinctive. First, the size of the country provided an opportunity to entrepreneurs simply unavailable to their competitors in England, France, Germany, or Belgium. The challenge was to develop the means to deliver products to customers all across the US. Once that could be achieved, the volume of production would lead to a rapid decline in unit prices and high profits based on quality goods becoming more affordable. Second, family ownership proved to be less important in the overall than the
…show more content…
The growth of the stock market also meant the relative decline of importance of family owners even when they remained. Wealthy families tended to diversify their holdings to protect themselves against market fluctuations. (5) The careers of salaried managers became increasingly technical and professional. They were trained to evaluate results and find the right solutions to problems. (6) Management separated from ownership. (7) In making administrative decisions, career managers preferred policies that favored long-term stability and growth of their enterprises to those that maximized current profits. (8) As large enterprises grew, they altered the basic structure of major sectors of the economy as a whole. The traditional way of looking at business history was to describe how firms grew. Vertical and horizontal integration as the results of a dynamic of growth for its own sake, capital needed to be invested and keep growing. Vertical and horizontal integration were strategies aimed at securing resources, improving access to market, but not ends in themselves. The strategy chosen followed from how best to secure stable resources, land, labor, or markets within an effective operating ratio. The managerial revolution and the methods adapted for assessing performance were more important than an abstract process of growth. Railroads were the first modern business enterprise to develop in the US, with a modern managerial class. Aside from makers of electrical equipment, few manufacturers needed outside funds until the 1890s. New York financial markets developed principally through sale of railroad bonds and stocks. Railroads gave impetus to large-scale construction firms and modern investment banking houses. Railroad management did not come out of the business community of the time. They had engineering backgrounds, many had attended West
The growth of the stock market also meant the relative decline of importance of family owners even when they remained. Wealthy families tended to diversify their holdings to protect themselves against market fluctuations. (5) The careers of salaried managers became increasingly technical and professional. They were trained to evaluate results and find the right solutions to problems. (6) Management separated from ownership. (7) In making administrative decisions, career managers preferred policies that favored long-term stability and growth of their enterprises to those that maximized current profits. (8) As large enterprises grew, they altered the basic structure of major sectors of the economy as a whole. The traditional way of looking at business history was to describe how firms grew. Vertical and horizontal integration as the results of a dynamic of growth for its own sake, capital needed to be invested and keep growing. Vertical and horizontal integration were strategies aimed at securing resources, improving access to market, but not ends in themselves. The strategy chosen followed from how best to secure stable resources, land, labor, or markets within an effective operating ratio. The managerial revolution and the methods adapted for assessing performance were more important than an abstract process of growth. Railroads were the first modern business enterprise to develop in the US, with a modern managerial class. Aside from makers of electrical equipment, few manufacturers needed outside funds until the 1890s. New York financial markets developed principally through sale of railroad bonds and stocks. Railroads gave impetus to large-scale construction firms and modern investment banking houses. Railroad management did not come out of the business community of the time. They had engineering backgrounds, many had attended West