Alfred Chandler - Managerial Enterprise

Has ‘managerial enterprise’ contributed to the success of leading economies? To what extent can this organizational form be applied in differing national circumstances?

The question is asking whether the economic success of the leading counties can be accounted to the success of managerial enterprises (MNEs) and whether there is ‘one best way’ of managing the enterprise that can be applied globally. To be able to answer this question in this paper we will critically examine Alfred Chandler’s Theory of Scale and Scope (1990), analyse the empirical evidence and review the specifics of national characteristics of leading economies and study whether MNEs model fits in.

This essay will demonstrate that A Chandler’s theory has major flaws because it concentrates mainly on United States and judges all the other countries regardless of the differences in their economic characteristics as well as he fails to analyse external dimensions of economic growth. We will conclude that managerial enterprises contributed to the success of US, but this framework can not be solely responsible for the rise of ‘super power’, as Porter (1990) outlines the role of chance determines economic success. Chandler’s framework can neither be applied universally, nor can it explain the achievements of an economy, which is subject to specific national, industrial and historical characteristics. The success of nations is highly subjective, there is no ‘one best way’ since what could lead to achievements of one nation can cause a failure of another. The analytical framework will be used to support the arguments.

The analysis of MNEs by S Kuznets (The Economic Growth of Nations) leads to a conclusion that the growth and development of MNEs in capital-intensive industries served as a “primary engine of economic growth for the past century.” [1] In government and military MNEs were common organisational structures throughout years, where in 1880-1890s MNEs emerged in production and...