The Visible Hand - Week 1
- 1. Chandler’s General Propositions Modern multiunit business enterprise replace small traditional enterprise when administrative coordination permitted greater productivity, lower costs and higher profits than coordination by market mechanisms. The advantages of internalizing the activities of many business units within a single enterprise could not be realized until a managerial hierarchy had been created.
- 2. Chandler’s General Propositions Modern business enterprise appeared for the first time in history when the volume of economic activities reach a level that made administrative coordination more efficient and profitable than market coordination. Once managerial hierarchy had been formed and had successfully carried out its function of administrative coordination, the hierarchy itself became a source of permanence, power, and continued growth.
- 3. Chandler’s General Propositions The careers of salaried managers who directed the managerial hierarchies became increasingly technical and professional. As the multiunit business enterprise grew in size and diversity and as its managers became more professional, the management of the enterprise became separated from its ownership.
- 4. Chandler’s General Propositions In making administrative decisions, career managers preferred policies that favored the long-term stability and growth of their enterprises to those that maximized current profits. As the large enterprises grew and dominated major sectors of the economy, they altered the basic structure of these sectors and the economy as a whole.
- 5. A Possible Model of Technological and Managerial Innovation in the 19th Century Technology Innovation Application of Technological innovation to business Organizational Innovation in response to the technology
- 6. A Possible Model of Technological and Managerial Innovation in the 19th Century Technology Innovation Application of Technological innovation to business Organizational Innovation in response to the technology