The Visible Hand: The Managerial Revolution in American Business »

Alfred D. Chandler, Jr., was Isidor Straus Professor of Business History at Harvard Business School.

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.

Robert L. Heilbroner - New York Review of Books

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.

Introduction: The Visible Hand

Modern Business Enterprise Defined

Some General Propositions

PART I THE TRADITIONAL PROCESSES OF PRODUCTION AND DISTRIBUTION

1. The Traditional Enterprise in Commerce

Institutional Specialization and Market Coordination

The General Merchant of the Colonial World

Specialization in Commerce

Specialization in Finance and Transportation

Managing the Specialized Enterprise in Commerce

Managing the Specialized Enterprise in Finance and Transportation

Technological Limits to Institutional Change in Commerce

2. The Traditional Enterprise in Production

Technological Limits to Institutional Change in Production

The Expansion of Prefactory Production, 1790-1840

Managing Traditional Production

The Plantation-an Ancient Form of Large-Scale Production

The Integrated Textile Mill-a New Form of Large-Scale Production

The Springfield Armory-Another Prototype of the Modern Factory

Lifting Technological Constraints

PART II THE REVOLUTION IN TRANSPORTATION AND COMMUNICATION

3. The Railroads: The First Modern Business Enterprises, 1850s-1860s

Innovation in Technology and Organization

The Impact of the Railroads on Construction and Finance

Structural Innovation

Accounting and Statistical Innovation

Organizational Innovation Evaluated

4. Railroad Cooperation and Competition, 1870s-1880s

New Patterns of Interfirm Relationships

Cooperation to Expand Through Traffic

Cooperation to Control Competition

The Great Cartels

The Managerial Role

5. System-Building, 1880s-1900s

Top Management Decision Making

Building the First Systems

System-Building in the 1880s

Reorganization and Rationalization in the 1880s

Structures for the New Systems

The Bureaucratization of Railroad Administration

6. Completing the Infrastructure

Other Transportation and Communication Enterprises

Transportation: Steamship Lines and Urban Traction Systems

Communication: The Postal Service, Telegraph, and Telephone

The Organizational Response

PART III THE REVOLUTION IN DISTRIBUTION AND PRODUCTION

7. Mass Distribution

The Basic Transformation

The Modern Commodity Dealer

The Wholesale Jobber

The Mass Retailer

The Department Store

The Mail-Order House

The Chain Store

The Economies of Speed

8. Mass Production

The Basic Transformation

Expansion of the Factory System

The Mechanical Industries

The Refining and Distilling Industries

The Metal-Making Industries

The Metal-Working Industries

The Beginnings of Scientific Management

The Economies of Speed

PART IV THE INTEGRATION OF MASS PRODUCTION WITH MASS DISTRIBUTION

9. The Coming of the Modern Industrial Corporation

Reasons for Integration

Integration by Users of Continuous-Process Technology

Integration by Processors of Perishable Products

Intergration by Machinery Makers Requiring Specialized Marketing Services

The Followers

10. Integration by the Way of Merger

Combination and Consolidation

The Mergers of the 1880s

Mergers, 1890-1903

The Success and Failure of Mergers

11. Integration Completed

An Overview: 1900-1917

Growth by Vertical Integration-a Description

Food and Tobacco

Oil and Rubber

Chemicals, Paper, and Glass

The Metal Fabricators

The Machinery Makers

Primary Metals

Growth by Vertical Integration—an Analysis

The Importance of the Market Integration and Concentration

The Rise of Multinational Enterprise

Integration and the Structure of the American Economy

Determinants of Size and Concentration

PART V THE MANAGEMENT AND GROWTH OF MODERN INDUSTRIAL ENTERPRISE

12. Middle Management: Function and Structure

The Entrepreneurial Enterprise

American Tobacco: Managing Mass Production and Distribution of Packaged Products

Armour: Managing the Production and Distribution of Perishable Products

Singer and McCormick: Making and Marketing Machinery

The Beginnings of Middle Management in American Industry

13. Top Management: Function and Structure

The Managerial Enterprise

Standard Oil Trust

General Electric Company

United States Rubber Company

E. I. Du Pont de Nemours Powder Company

The Growing Supremacy of Managerial Enterprise

14. The Maturing of Modern Business Enterprise

Perfecting the Structure

The Professionalization of Management

Growth of Modern Business Enterprise Between the Wars

Modern Business Enterprise Since 1941

The Dominance of Modern Business Enterprise

Conclusion: The Managerial Revolution in American Business

General Patterns of Institutional Growth

The Ascendancy of the Manager

The United States Seed-Bed of Managerial Capitalism

Appendixes

Notes

Index