All scientific disciplines have their early giants whose work facilitated that of their successors. This was acknowledged as early as in the twelfth century, by Bernard of Chartres, and has since been stressed by, among others, Isaac Newton in the seventeenth century and Robert Merton in the twentieth century. In the oft-cited words of Newton, “If I have seen further, it is by standing on the shoulders of giants.” Most business history scholars, when asked to name the most important giant on whose shoulders they are standing, would probably have a clear answer: the late Alfred D. Chandler Jr., who passed away in 2007 at the age of eighty-eight.
Chandler, who earned a PhD in history from Harvard University in 1952—after appointments at the Massachusetts Institute of Technology (MIT) and Johns Hopkins University—crossed over the Charles River to Harvard Business School in 1970. Among his publications were the now classic studies Strategy and Structure (1962), The Visible Hand (1977), and Scale and Scope (1990). These three volumes, and a number of Chandler's other publications, have indeed been very important not just for business history but for the economic sciences in a wide sense. William Lazonick and David J. Teece—the two coeditors of Management Innovation: Essays in the Spirit of Alfred D. Chandler Jr.—thus argue that Chandler's work has had a radical impact on students of the U.S. economy. Before Chandler, they state, these students “might know the names of the major business corporations and the industries that they inhabited,” while after Chandler they “understood when and where these enterprises came into existence as well as how, collectively, these corporations contributed to the economy” (p. v).
Against this backdrop, a special issue of Industrial and Corporate Change containing essays in the spirit of Chandler, with Lazonick and Teece as guest editors, was published in 2010. This journal issue is available here in book form, with a few changes: new to the book are one chapter by each of the two editors as well as an index, while two interviews—with Richard Nelson and Sidney Winter, respectively, on the contributions of Chandler—as well as abstracts have been left out. Thus, for those who have already read the special issue, the additional two chapters of the book will provide new reading and the index an opportunity for searching. For those who have not come across the journal issue, this volume offers an opportunity for new perspectives on the work and influence of Chandler in an edited book.
The book is divided into four parts, the first of which contains two chapters each from the two editors offering perspectives on Chandler's work. Lazonick discusses, in chapter 1, the role of managers in developing and utilizing productive resources and, in chapter 4, the implications of Chandler's work for the theory of innovative enterprise. In between these chapters, coeditor Teece presents perspectives on Scale and Scope, in chapter 2, and on capability theories of strategy and management, in chapter 3. Already in the first chapter Lazonick points to three significant issues in Chandler's work: business strategy, organizational structure, and industrial finance (pp. 7–8). These are also the topics for the three remaining sections of the book.
The second section, on strategy, starts with chapter 5, by Louis Galambos, who offers supplementary perspectives to those of Chandler on the role of professionals in modern corporations. In the following chapter, Susan Helper and Mari Sako argue that vertical integration through management of the supply chain, discussed by Chandler, is as significant as ever. A related topic is the focus of chapter 7, where Henrik Glimstedt, Donald Bratt, and Magnus P. Karlsson focus on the decision to make or buy a critical technology, using the case of semiconductors at Ericsson (1980–2010) as their empirical evidence.
The third section opens up with chapter 8, by Gary P. Pisano, who elaborates on the development of science-based business—particularly how scientific innovations occur, to an increasing extent, outside and in collaboration with the large corporations. A related problem, knowledge management in large corporations, is discussed in chapter 9 by David C. Mowery: that is, how corporations can create, communicate, distribute, and exploit strategic knowledge. In chapter 10, which concludes the section, Peter Cappelli analyzes the rise and fall of managerial development in U.S. corporations: the changing patterns of in-house managerial training vs. the recruitment of managers in the market.
In the fourth section, on finance, Mary A. O'Sullivan discusses in chapter 11 the role of finance capital in Chandlerian capitalism, concluding that this issue calls for considerable additional research. Then, in the last chapter, David Bardolet, Dan Lavallo, and Richard Rumelt—the latter the only one of the authors who was an actual student of Chandler—report on a comparative study of investment behavior in multi- and single-business firms.
All in all, Management Innovation offers twelve interesting essays that discuss the work of Chandler. Among them, the four chapters by the editors offer a more general analysis, while the other eight deal with more specific aspects of the Chandler legacy. Together they provide a new reminder of the significant contributions of Alfred D. Chandler Jr. to business history, management studies, and economics, fields in which present-day scholars are standing on his shoulders.
