Strategy and Structure: Chapters in the History of the Industrial Enterprise

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MIT Press, 1990 - 463 pages
Introduction--Strategy and Structure 1 Motives and Methods 1 Some General Propositions 7 1 Historical Setting 19 The Beginnings of Business Administration in the United States 20 The Coming of the Integrated, Multidepartmental Enterprise 24 Integration via Combination and Consolidation 29 Organization Building 36 Further Growth--The Coming of the Multidivisional Enterprise 42 2 Du Pont--Creating the Autonomous Divisions 52 The Centralized Structure 52 The Strategy of Consolidation 53 Creating the Multidepartmental Structure 57 Structural Modifications--1903-1919 62 Further Centralization--1919 67 The Strategy of Diversification 78 Initial Steps Toward Diversification 79 Intensified Pressures for Diversification 83 The Final Definition of the Strategy of Diversification 88 New Structure for the New Strategy 91 New Problems Created by New Strategy 92 The Problems Analyzed 94 A New Structure Proposed and Rejected 96 A Compromise Structure Adopted 100 Crisis and the Acceptance of the Multidivisional Structure 104 3 General Motors--Creating the General Office 114 The Durant Strategy 114 The Sources of Durant's Strategy 115 The Creation of General Motors 118 The Storrow Regime 120 Durant's Return and Renewed Expansion and Integration 122 Du Pont Contributions to Durant's Organization 125 The Crisis of 1920 128 The Sloan Structure 130 The Sources of Sloan's Structure 130 The "Organization Study" 133 Minor Modifications 140 Putting the New Structure into Operation 142 Defining Divisional Boundaries 142 The Development of Statistical and Financial Controls 145 Defining the Role of the Advisory Staff 153 The Role of the Executive Committee 157 The Finished Structure 158 A Comparison of Organization Building at General Motors and du Pont 161 4 Standard Oil Company (New Jersey)--Ad Hoc Reorganization 163 Structure and Strategy Before 1925 164 The Strategy of Vertical Integration and Continued Expansion 170 Vertical Integration and the Creation of New Functional Departments 172 Expansion and the Older Departments 175 The Growth of Staff Departments 177 The Board 181 Initial Awareness of Structural Weaknesses 182 The Initial Reorganization--1925-1926 185 Teagle's Troubles 186 The 1925 "Program" 188 The Coordination Department and Committee 189 The Budget Department and Committee 193 Reorganizing the Marketing Department 196 Reorganizing the Manufacturing Department 199 The Creation of the Multidivisional, "Decentralized" Structure 205 Continuing Difficulties 205 The 1927 Changes 208 Working Out the New Structure 216 Some Final Considerations 221 5 Sears, Roebuck and Company--Decentralization, Planned and Unplanned 225 Changing Strategy and Structure 225 Initial Strategy and Structure 226 The New Strategy 233 Structural Strains Created by the New Strategy 237 Abortive Decentralization 241 The Frazer Committee 242 The Committee's Proposals 243 Carrying Out the Committee's Proposals 249 Frazer Reviews the New Structure 252 Continuing Conflict and Resulting Proposals 253 The Territorial Organization Scrapped 260 Evolutionary Decentralization 261 The Centralized Retail Organization 261 Decentralization of the Retail Organization 265 The Growth of Local Regional Administrative Units 267 The Return to the Territorial Organization 268 The Final Structure 276 6 Organizational Innovation--A Comparative Analysis 283 The Adaptive Response 284 Building the Functional Departments 285 Building the Central Office 290 The Creative Innovation 299 The Conditions for Innovation 299 The Process of Innovation 303 The Significance of the Innovation 309 Organizational Innovators 314 An Organization Builder's Personality and Training 315 Sources of Information 320 7 The Spread of the Multidivisional Structure 324 Industries Not Accepting the New Structure 326 Copper and Nickel 327 Steel 331 Aluminum 337 Materials 340 Industries Partially Accepting the New Structure 342 Processors of Agricultural Products 344 Rubber 350 Petroleum 352 Industries Widely Accepting the New Structure 362 Electrical and Electronics 363 Power Machinery and Automobiles 370 Chemicals 374 Variations on Structural Change 378 The Merchandising Enterprises 378 Summary of the Process of Structural Change within the Enterprise 380 Conclusion--Chapters in the History of the Great Industrial Enterprise 380 The First Chapter--Accumulating Resources 386 The Second Chapter--Rationalizing the Use of Resources 387 The Third Chapter--Continued Growth 390 The Fourth Chapter--Rationalizing the Use of Expanding Resources 393 References 397 Notes 399 Index 455.
 

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It is impossible in a bare outline to do anything like justice to the subtlety (if also, sometimes, the prolixity) of the argument and to the wealth of telling instances with which it is illustrated. The argument is not dogmatic or rigid and allows plenty of room for deviations, variants, and exceptions.... There is no doubt that this is a book of first-class importance...significant, not only for its substantive conclusions, original though these are, but as an example of the way in which fruitful relations can be established between economic and business history." -- "Journal of Economic History" This book shows how the seventy largest corporations in America have dealt with a single economic problem: the effective administration of an expanding business. The author summarizes the history of the expansion of the nation's largest industries during the past hundred years and then examines in depth the modern decentralized corporate structure as it was developed independently by four companies--du Pont, General Motors, Standard Oil (New Jersey), and Sears, Roebuck. "This 1990 reprint includes a new introduction by the au 

Contents

INTRODUCTION STRATEGY AND STRUCTURE
1
HISTORICAL SETTING
19
DIVISIONS
52
GENERAL MOTORS CREATING
114
THE SLOAN STRUCTURE
130
PUTTING THE New STRUCTURE INTO OPERATION
142
AD HOC REORGANIZATION
163
SEARS ROEBUCK AND COMPANY DECEN
225
ORGANIZATIONAL INNOVATIONA COM
283
THE SPREAD OF THE MULTIDIVISIONAL
324
CONCLUSION CHAPTERS IN THE HISTORY
383
NOTES
399
INDEX
455
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About the author (1990)

Alfred Chandler was on the faculty of the Harvard Business School and Editor of the Harvard Studies in Business.

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