Hrm in Germany

Chandler defines managerial enterprise as “ those industrial concerns where

Decisions as to current production, and distribution and those involving investments in facilities and personnel for the future production and distribution are made by a hierarchy of lower, middle and top salaried managers”(Chandler 1993). Therefore a key aspect of managerial enterprise is separation of ownership from control, hierarchical structure and investments in three key areas. Chandler states that the adoption of managerial enterprise for the past century has been engines of economic growth and transformation in modern economics.

According to chandler managerial enterprise are located in large-scale capital-intensive industries, as these industries are large and can obtain diverse sources of finance from stock markets and venture capital groups, which is needed for vital investments. Due to the capital-intensive industries being of a large scale they can benefit from cost advantages of economies of scale and scope. Chandler argues that these cost advantages can only be maintained in an organisation if management make long-term investments in three key areas. These investments are regarded as the “three pronged set of investments in manufacturing, marketing and management”. According to chandler by making investments in these three areas it allows a company to exploit the economies of scale and scope to the highest degree, therefore benefiting from cost advantages.

Investments in marketing, management and manufacturing helped create the managerial enterprise along side with a hierarchical structure. As by investing in manufacturing and technology an industry can exploit its economies of scale and scope, investment in marketing and distribution networks aims to increase the volume of sales and keep the volume of sales in line with the new volumes of production and for an industry to take advantage of these benefits owners have to invest in management to coordinate and...