Small Business: it's history & Small Business Today
JIm Blasingame talks about the history of our independence and the direct connection between entrepreneurship and economic growth.
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Make your next event even better with a special keynote by Jim Blasingame, The Small Business Advocate® author of The Age of the Customer®: Prepare for the Moment of Relevance.
Jim Blasingame explains the importance of small bussinesses in today's economy.
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Business history was founded by Professor N. S. B. Gras at the Harvard University Graduate School of Business Administration, starting in 1927. He defined the field's subject matter and approach, wrote the first general treatise in the field, and helped Harvard build a tradition of scholarship as well as the leading library in the field. He edited a series of monographs, the Harvard Studies in Business History. He also served as editor of the Bulletin of the Business Historical Society (1926–1953), a journal which later became the Business History Review (1954-date). N.S.B. Grass and Henrietta M. Larson, Casebook in American business history (1939) defined the field for a generation.
Business history in the U.S. took off in the 1960s with a high volume of product and innovative methodologies. Scholars worked to develop theoretical explanations of the growth of business enterprise, the study of strategy and structure by Alfred Chandler being a prime example. The relationship between business and the federal government became a focal point of study. On the whole, the 1960s affirmed the conclusions of the earlier decades regarding the close interrelationship between government and business enterprise.
ChandlerAfter 1960 the most influential scholar was Alfred D. Chandler (1918-2007) at the Harvard Business School. In a career that spanned over sixty years, Chandler produced numerous groundbreaking monographs, articles, and reviews. Intensely focused on only a few areas of the discipline, Chandler nonetheless succeeded in establishing and developing an entirely new realm of business history.
Chandler's masterwork was The Visible Hand: The Managerial Revolution in American Business (1977). His first two chapters looked at traditional owner-operated small business operations in commerce and production, including the largest among them, the slave plantations in the South. Chapters 3-5 summarize the history of railroad management, with stress on innovations not just in technology but also in accounting, finance and statistics. He then turned to the new business operations made possible by the rail system in mass distribution, such as jobbers, department stores and mail order. A quick survey (ch 8) review mass innovation in mass production.The integration of mass distribution and mass production (ch 9-11) led to many mergers and the emergence of giant industrial corporations by 1900. Management for Chandler was much more than the CEO, it was the whole system of techniques and included middle management (ch 11) as well as the corporate structure of the biggest firms, Standard Oil, General Electric, US Steel, and DuPont (ch 13-14). Chandler argued that modern large-scale firms arose to take advantage of the national markets and productive techniques available after the rail network was in place. He found that they prospered because they had higher productivity, lower costs, and higher profits. The firms created the "managerial class" in America because they needed to coordinate the increasingly complex and interdependent system. This ability to achieve efficiency through coordination, not some anti-competitive monopolistic greed by robber barons, explained the high levels of concentration in modern American industry.
Chandler's work was somewhat ignored in history departments, but proved influential business, economics, and sociology. In sociology, for example, prior to Chandler's research, sociologists assumed there were no differences between governmental, corporate, and nonprofit organizations. Chandler's focus on corporations clearly demonstrated that there were differences, and this thesis has guided organizational sociologists' work since the 1970s. It also motivated sociologists to investigate and critique Chandler's work more closely, turning up instances in which Chandler assumed American corporations acted for reasons of efficiency when they actually operated in a context of politics or conflict. Other historians, such as Gabriel Kolko, challenged the very notion of "efficiency through coordination", arguing instead that big business had, for reasons of inefficiency and a dislike of market discipline, openly sought government assistance to keep market forces at bay.
Other mechanismsLamoreaux et al. (2003)offers a new synthesis of American business history during the 19th-20th centuries. Moving beyond the markets-versus-hierarchies framework that underlies the previously dominant interpretation of Chandler, the authors highlight the great variety of coordination mechanisms in use in the economy at any given time. Drawing on late-20th-century theoretical work in economics, they show how the relative advantages and disadvantages of these different mechanisms have shifted in complex and often unpredictable ways as a result of changing economic circumstances. One advantage of this perspective is that it avoids the teleology that has characterized so much writing in the field. As a result, the authors can situate the "New Economy" of the late 20th century in broad historical context without succumbing to the temptation to view it as a climactic stage in the process of economic development. They thus provide a particularly persuasive example of the importance of business history to the understanding of national and international history.
ComparativeUnderstanding the development of business history as a discipline meriting its own aims, theories and methods is often understood as a transition from dominating themes of 'company biography', toward more analytical 'comparative' approaches. This 'comparative' trend enabled practitioners to underline their work with 'generalist' potential. Questions of comparative business performance have become a staple, featuring into the wider economic histories of nations, regions and communities. For many this transition was first achieved by Alfred D. Chandler. Chandler’s successors as Isidor Straus Professor of Business History at Harvard Business School continued to emphasize the importance of comparative research and course development. In 1995 Thomas K. McCraw published Creating Modern Capitalism (Cambridge, MA 1995) This book compared the business histories of Britain, Germany, Japan and the United States since the Industrial Revolution, and was used as the text of a new year MBA course at Harvard Business School. Geoffrey Jones, who was McCraw’s successor as Isidor Straus Professor of Business History, also pursued a comparative research agenda. He published a comparative study of the history of globalization called Multinationals and Global Capitalism (Oxford, 2005). In 2010, Jones also published a comparative history of the global beauty industry entitled Beauty Imagined: A History of the Global Beauty Industry (Oxford, 2010). More recently, Jones and the Business History Initiative at the Harvard Business School has sought to facilitate research and teaching on African, Asian and Latin American business history in a project called Creating Emerging Markets, which includes interviews with long-time leaders of firms and NGOs in those regions.
A trend in recent years has been to compare the business histories of individual countries. Geoffrey Jones (academic) and Andrea Lluch have published a comparative study of the historical impact of globalization on Argentina and Chile. In 2011 Jones and his co-editor Walter A. Friedman published an editorial in Business History Review which identified comparative research as essential for the future of business history as a discipline.
FranceAmerican historians working in French business history discovered that most of the business enterprises in France were family-owned, small in scale, and managed conservatively. By contrast, French business historians emphasized the success of national economic planning since the end of World War II and tried to make it clear that the economic development in this period stemmed from various phenomena of the late 19th century: the corporation system, the joint-stock deposit and investment banks, and the technological innovations in the steel industry. To clarify the contributions of 19th-century entrepreneurs to the economic development in France, French scholars support two journals, Enterprises et Histoire and Revue d'Histoire de la Siderurgie.
Latin AmericaBarbero (2008) examines the development of the field of Latin American business history, from the 1960s to 2007. Latin American business history developed in the 1960s, but until the 1980s it was dominated by either highly politicized debates over Latin American underdevelopment or biographies of Latin American entrepreneurs. Since the 1980s, Latin American business history has become a much more professionalized and an integrated part of Latin American academia. It is much less politicized and has moved beyond entrepreneurial biography to histories of companies and industries. However, Latin American business historians have still not devoted enough attention to agricultural enterprises or comparative histories between the many countries. Probably most importantly, Latin American business historians have to become much more versed in business history theory and methodology so as to get beyond mere summation of the region's economic past.
BritainBusiness History in Britain emerged in the 1950s following the publication of a series of influential company histories and the establishment of the journal Business History in 1958 at the University of Liverpool. The most influential of these early company histories was Charles Wilson (historian)’s History of Unilever, the first volume of which was published in 1954. Other examples included Coleman’s work on Courtaulds and artificial fibres, Alford on Wills and the tobacco industry, Barker on Pilkington’s and glass manufacture. These early studies were conducted by primarily by economic historians interested in the role of leading firms in the development of the wider industry, and therefore went beyond mere corporate histories. Although some work examined the successful industries of the industrial revolution and the role of the key entrepreneurs, in the 1970s scholarly debate in British business history became increasingly focused on economic decline. For economic historians, the loss of British competitive advantage after 1870 could at least in part be explained by entrepreneurial failure, prompting further business history research into individual industry and corporate cases. The Lancashire cotton textile industry, which had been the leading take-off sector in the industrial revolution, but which was slow to invest in subsequent technical developments, became an important topic of debate on this subject. William Lazonick for example argued that cotton textile entrepreneurs in Britain failed to develop larger integrated plants on the American model; a conclusion similar to Chandler’s synthesis of a number of comparative case studies.
British business history began to widen its scope in the 1980s, with research work conducted at the LSE's Business History Unit, led first by Leslie Hannah, then by Terry Gourvish. Other research centres followed, notably at Glasgow and Reading, reflecting an increasing involvement in the discipline by Business and Management School academics. More recent editors of Business History, Geoffrey Jones (academic)(Harvard Business School), Charles Harvey (University of Newcastle Business School), John Wilson (Liverpool University Management School) and Steven Toms (Leeds University Business School) have promoted management strategy themes such as networks, family capitalism, corporate governance, human resource management, marketing and brands, and multi-national organisations in their international as well as merely British context. Employing these new themes has allowed business historians to challenge and adapt the earlier conclusions of Chandler and others about the performance of the British economy.