Alfred Chandler

Alfred D. Chandler Jr., an American economic historian who conceptualizes the idea of capitalism related to national economies history, proposing the model of the integrated managerial enterprise. According to Harvey and Jones (1992:11), Chandler points out the increase amount of industrial enterprises in the 20th century were the key element that stimulating and transforming the modern economies which were grown and created by following a dynamic economic pattern. This essay is going to critically evaluate how effectively Chandler's model of large managerial enterprises uncovers the long-term success of leading national economies and how they apply that economic pattern across varied national circumstances by investigating the US, Germany, Japan, UK and China and by reviewing Chandler's influential research contributions in this area during the past century.

Chandler (1990:14) describes the managerial enterprise as the modern industrial enterprise containing several different operating units to carry out specific functions of production and distribution. It is also a "governance structure" that the investment decisions for current and future production and distribution are made by a hierarchy of lower-, middle- and top-level managers with specific knowledge and expertise (Williamson, 1981:1539-44). All of these managers should be responsible to manage the organization rather than the inefficient family-owned organizations.

First of all, when did the development of big business begin? Schmitz (1993:3,14-15) states that at the end of 19th century, the innovation of railway had initiated the large managerial hierarchies, particularly in America and Europe, since the railway companies cannot be run by a single family.

Some large capital-intensive enterprises aware of the long-term achievement is to extend their businesses into new geographical and product markets. Thus, they began to adopt Chandler's multidivisional structure (or M-form) rather than Porter's value...