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.
Review
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. (Economist) Review 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 ) --This text refers to an out of print or unavailable edition of this title.
About the Author
Alfred D. Chandler, Jr., was Isidor Straus Professor of Business History at Harvard Business School.
Chandler give a fascinating review of America's physical history, with emphasis on the development of the coal, railroad, steel, and telegraph industries in making the transportation and communication revolutions possible. The birth of this infrastructure made the rise of mass production and mass marketing possible. The most interesting changes which resulted were in the evolution of the managerial structure and science which became necessary, and which in turn made the transformation of our world possible. "Big business" became not only possible, but essential. That this was an evil system driven by greed is a myth. The book gives detailed descriptions of the birth and growth of many large companies including the big railroads, US Steel, Standard Oil, Singer, MacCormack, DuPont, etc. It is a fascinating narrative.
The Visible Hand is so widely used that I had it as assigned reading in three separate graduate classes, in both Economics and History classes. The fact that economists and historians find this book so useful speaks to its best attributes. The Visible Hand examines business history from an economic perspective. Many historians have so little understanding of economics that they cannot sort out the economic angles of history. Chandler focuses on the right issues (accounting methods, finance, entrepreneurship, public policy, technology) and applies enough common sense economics to do some good analysis.
The main problem with The Visible Hand is that its theoretical analysis is limited to the more obvious common sense insights of economics. Chandler aims at contrasting the Invisible Hand of markets with the idea of conscious planning in organization. While there is much merit in this approach, there is more to the analysis of markets and organizations that you find in this book. Economists have discovered many subtle differences and similarities between markets and organizations, more than you find in The Visible Hand. Consequently, the quality of its analysis varies.
I agree with the emphasis that Chandler places on accounting methods. However, Chandler sees finance capitalism as phase, which gave way to managerial capitalism. I disagree with Chandler on so called managerial capitalism. He underestimates the importance of financial factors both between and within `managed' organizations, and misconstrues the nature of private sector bureaucracies. There are important differences between private and public bureaucracies of which Chandler seems unaware. Furthermore, Chandler does not fully appreciate the role of public policy in shaping modern American corporate organization.
While I find its theoretical analysis weak, I do not doubt the value of this book as a resource on American business history. This is a work of great breadth and, at times, meticulous detail. There is also some good analysis here. The Visible Hand is not for everyone. However, Business Historians, Economic Historians, and IO Economists should read this, even if it is not assigned in graduate school. I rate it at five stars as a history, three stars for theory, for an average of four.
Product Details :
- Paperback: 624 pages
- Publisher: Belknap Press of Harvard University Press (January 1, 1993)
- Language: English
- ISBN-10: 0674940520
- ISBN-13: 978-0674940529
- Product Dimensions: 1.2 x 6.2 x 9.1 inches
More Details about The Visible Hand: The Managerial Revolution in American Business, 1st Edition
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