This book contributes to the debate over the ability of family firms to succeed in the second industrial revolution. Doreen Arnoldus has chosen six successful Dutch family firms in the branded, packaged products industry to analyze how the strategies these firms adopted contributed to their success. Her research highlights two important issues. First, these firms undertook the three-pronged investment strategy that Alfred Chandler promotes as necessary for success in the second industrial revolution, namely investment in large production facilities, distribution networks, and management talent (Scale and Scope: the Dynamics of Industrial Capitalism. Cambridge: Belknap Press, 1990, p. 31). Second, the firms were able to use the social networks within which they operated to sustain a comparative advantage over other competitors and these connections were enhanced by the family nature of the firms.

The book comprises nine chapters plus a final summary in Dutch, broken into five sections. Chapters 1 and 2 outline the purpose, sources, and firms used for the study. The second section, chapters 3 and 4, describes the internal or succession strategies of each firm. The third section, chapters 5 through 7, sets out the external strategies of the firms in the capital, labor, and raw materials markets and in the marketing of products. The fourth section, chapter 8, describes the social networks within which the firms operated. Chapter 9 concludes.

The six firms were among the largest 100 firms in the Netherlands between 1913 and 1930 (p. 23). Three originated in the early industrialized windmill region just north of Amsterdam, the Zaanstreek. The families that started these firms had been successful at consolidating windmill ownership over the previous centuries, their firms were predominantly engaged in crushing seed for oil, and they were from either Mennonite or Dutch Reformed religious backgrounds in a predominantly protestant region. The other three firms originated in or near Oss in the North Brabant region in the south. The families that started them were part of the Jewish minority in a predominantly Catholic region and were relatively recent immigrants to the area. They focused on producing meats and related products for the growing urban markets in the United Kingdom. The two groups of firms allow for the comparison of strategies between firms and across two different social networks to help understand the influence of environment on a firm's strategic choices.

Internal succession strategies are choices that firms make to pass ownership and control from one generation to the next. Arnoldus's review of succession strategies highlights two important factors about the recruitment of professional management. First, these firms went to great lengths to train top level management from within their own families, providing formal education and internal and external internships for their sons. This apparent nepotism was one approach to the problem of finding high-quality, loyal top management, not the only one. Thus, second, when outsiders were necessary to provide management capabilities not available from within, they were brought in, even at top levels.

The review of external strategies of the firms in input markets and marketing reveals three important features that determined the relative success of the firms. First, for all of these firms, the capital intensity of the products they produced increased gradually over the period, which facilitated financing through reinvestment of profits rather than requiring a large capital outlay at the beginning of the period. Second, the relative success of the firms was positively correlated with the extent to which the firms invested not only in new and expanded production facilities but also in distribution networks and raw materials supplies to ensure the throughput that Chandler highlights as important (Scale and Scope, p. 24). Finally, four of the six firms eventually needed larger capital outlays than the family could provide and drew on public capital (p. 217). The two that did not instead chose to sell the family firm at the point where large capital investments became necessary (pp. 96, 194, 215).

Social networks proved essential in positioning the firms for success. The difference between the two groups of firms is a particularly enlightening contribution of the book. The Zaanstreek network was based on centuries of location in the same area in the same business. The long history of accumulated capital and connections minimized the need for outside financing and provided raw-materials and distribution networks to which outsiders did not have equal access. The Jewish firms in North Brabant, on the other hand, relied on the international dispersion of their families to develop superior marketing networks for their products that allowed them to increase the size of their operations and cut costs. Either way, the firms were able to use family connections to reach a larger market and capitalize on economies of scale and scope in ways not available to firms without the same connections.

Overall, the book presents an excellent picture of the forces that contributed to the success of these family firms. Although they faced unique challenges because of the need to provide for the immediate family, none of them can be considered short-sighted or focused on current income at the expense of long-term viability. The ultimate success of each firm was tied to the extent to which it engaged in the three-pronged investment strategy that Chandler proposes. The eventual transformation from family firm to managerial capital firm was tied to the inability to provide enough capital or management internally at a crucial point. It leaves us in a bit of a quandary. Do the results indicate that family firms can be every bit as successful as managerial capital firms or do they indicate that there is a limit to the successful family firm, beyond which managerial capitalism possesses compelling advantages regardless of issues of environment? Finally, were these firms able to maintain their family character longer because they were in the branded-packaged products industry, which Chandler finds had lower penalties for operating below minimum efficient scale (Scale and Scope, p. 27)?