“What has been the best corporate Darwin Award? A decision made by a company that basically killed the business.”

• George Lucas wanted X salary to direct Star Wars. The studio thought it was too much. Of course they thought the movie might make money, but they didn’t really think it would become the powerful franchise we know it today. So George said “I’ll take a pay cut of $20K, if you give me all the merchandising rights”. Those rights were part of the $4 billion that Disney just paid him for Lucasfilms. Fox lost billions over several decades, in order to save $20K back in the 70’s.

  [AS: My comments– sure Fox lost money, but it is still in business]

• Eddie Lampert, the CEO of Sears is one of the best contenders for the Corporate Darwin Award. He’s an Ayn Rand-loving, free-market ideologist who attempted to take his non-reality-based style of life out of the lobbyist/Congress rigged world of hedge funds and into retail. He laid off, cut, and trimmed back everything he could and forced departments, managers, and employees to fight against each other for resources and pay under the delusion that the company would benefit from a survival of the fittest atmosphere. Since that time, Sears has lost half its value in five years and has closed more than half of its stores, not to mention just about destroyed one of the oldest and most trusted brands in the history of the United States.

  [AS: He hasn’t ruined the company yet though].

• Enron for paying their executives “idea bonuses” before the ideas turned a profit. They paid one guy millions for inventing an online movie downloading service about ten years before that was feasible. Ironically, the documentary is available on Netflix.

  [AS: Actually, idea bonuses are not a bad idea. The real problem with Enron was the fraud].

Hat tip to Chris Blattman.

I’m appealing to all of my fellow Business Historians here. I need to prepare a (very short) reading list for a PhD student who is embarking on a project in the field of business history. [Please keep in mind that I am in the UK, where we don’t have comprehensive exams].  The student needs to get a sense of what business history is all about. What are the top 10 essential reads in the field? Any suggestions? . I’ve listed ten titles below– please tell me what you think of this list in the Comments section.

I believe that a good knowledge of Chandler is essential for any business historian, which is why there are four pieces by or about Chandler on the list.  However, I am conscious of the need to expose the student to current debates in business history.

I should explain that her PhD thesis will be on the history of energy price regulation in the UK. Her undergraduate degree was joint honours in Business and History. A few of her undergraduate courses dealt with British economic and social history, so I would imagine that she has some background knowledge I can draw on. I want to expose her to current debates in the field.

I’m co-supervising this PhD student with a political economist. I should explain that the student will be given a similar short reading list of key works in the field of political economy.

Debating Chandler

Chandler Jr, A. D. The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977

Chandler, Alfred Dupont, Takashi Hikino, and Alfred D. Chandler. Scale and scope: The dynamics of industrial capitalism. Harvard University Press, 2009.

John, Richard R. “Elaborations, Revisions, Dissents: Alfred D. Chandler, Jr.’s, The Visible Hand after Twenty Years.” Business History Review 71, no. 02 (1997): 151-200.

Bucheli, Marcelo, Joseph T. Mahoney, and Paul M. Vaaler. “Chandler’s Living History: The Visible Hand of Vertical Integration in Nineteenth Century America Viewed Under a Twenty‐First Century Transaction Costs Economics Lens.”Journal of Management Studies 47, no. 5 (2010): 859-883.

Two Key Overviews of UK Business History

Wilson, J. F. (1995). British business history, 1720-1994. Manchester University Press.

Hannah, Leslie. The rise of the corporate economy. Routledge, 2013.

Contemporary Debates

Bucheli, Marcelo, and R. Daniel Wadhwani, eds. Organizations in Time: History, Theory, Methods. Oxford University Press, 2013.

Rowlinson, M., Hassard, J., & Decker, S. 2014. Research Strategies for Organizational History: A Dialogue between Historical Theory and Organization Theory. Academy of Management Review, 39(3)

Winter, Sidney G. “An Evolutionary Program for Business History?.” Enterprise and Society 14, no. 3 (2013): 498-506.

Kobrak, Christopher, and Andrea Schneider. “Varieties of business history: Subject and methods for the twenty-first century.” Business History 53, no. 3 (2011): 401-424.

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Update: Someone contacted me via email to suggest some additional sources. I’ve pasted them below:

Decker, S. 2013. The silence of the archives: business history, post-colonialism and archival ethnography. Management & Organizational History, 8(2): 155-173.

Kipping, M., & Üsdiken, B. 2014. History in Organization and Management Theory: More Than Meets the Eye. The Academy of Management Annals, 8(1): 535-588.

de Jong, A., Higgins, D., & van Driel, H. 2015. New Business History? An Invitation to Discuss. Business History  (forthcoming).

Decker, S., Kipping, M., & Wadhwani, R. D. 2015. New Business Histories! Plurality in business history research methods. Business History (forthcoming).

Obviously this might not all be relevant to your student, but if he/she does a historical subject at a B-School, I think these are becoming part of the canon

AS: Recently I’ve been blogging quite frequently about events related to the First World War. This post continues the theme.

04 December 2014 18:30 to 21:00

Professor Erik-Jan Zürcher (Leiden University), one of the world’s leading experts on Turkey, will chart the development of the architecture, economy and population of Istanbul in the 20th and 21st centuries.  In 1920 it was occupied by Britain and its allies after the Ottoman defeat in World War I. Then, in 1923 it lost the position as imperial capital it had held for 1600 years. In 1924 it also ceased to be the seat of the caliphate, an honour it had held for some 350 years. During the early republic, plans were developed to remodel the city according to the modernist ideals of the Kemalists, but the construction of Ankara as the iconic city of modern Turkey had priority. Big changes came with the fifties, not only in terms of architecture and city planning but also in the composition of Istanbul’s population. From a cosmopolitan city of Turks and Greeks it turned into a destination of Turkish and Kurdish migrants from inner Turkey. The city of one million grew into a city of fourteen million in little over half a century.  From the nineteen eighties onwards integration  into the capitalist world economy combined with the end of the cold war to return to Istanbul its position as economic and cultural hub. Finally, in recent years, the city has aspired to rival emerging world cities like Dubai and Singapore. As this lecture will show, all of these developments are clearly reflected in Istanbul’s changing cityscape.

Professor Zürcher has published many articles and books including The Young Turk Legacy and Nation Building: From the Ottoman Empire to Atatürk’s Turkey (IB Tauris, 2010).

This event will also mark the launch of the first book of the new BIAA-IB Tauris series on contemporary and Ottoman Turkey.  Turkey and the Politics of National Identity: Social, Economic and Cultural Transformation by Shane Brennan and Marc Herzog.

Thursday, 4 December
6.30 pm

The British Academy
10 Carlton House Terrace
London SW1Y 5AH

That’s the title of an interesting article in Slate.

Fifty years ago, historians advised politicians and policy-makers. They helped chart the future of nations, by helping leaders learn from past mistakes in history. But then something changed, and we began making decisions based on economic principles rather than historical ones. The results were catastrophic.

That’s from Annalee Newitz’s review of 2014. The History Manifesto (Cambridge: Cambridge University Press, 2014) by David Armitage and Jo Guldi.

Armitage and  Guldi are calling for a “historic turn” in the public-policy process. i’m certainly inclined to think that more input from academic historians would improve public policy (as would more input from psychologists, scientists, and other experts). Moreover, their efforts to promote a historic turn in policy is very interesting to me in light of the ongoing “historic turn” in management-school research: a small but growing number of management academics are turning to  the historical record and historical methods, rather than economics, to make sense of present. Management academics are concerned, primarily, with decision-making in the private sector, whereas policy academics are interested, primarily, with decision-making in government. In both areas of research, there is obviously some push back against perceived economic imperialism (i.e., the tendency of neo-classical economics to colonize subject matters that were not traditionally considered to be within the purview of economics). One interpretation of the historic turn in management and Armitage-Guldi book is that history is engaged in a form of counter-imperialism against economics, which was long the most imperialistic of the social sciences.

(I’ve posted a list of sources on the historic turn in management schools below).

There is, therefore, much to like about the History Manifesto. However, I’m disturbed by several arguments that the authors make.

First, while they do not equate historical writing with historical writing by academics, their book tends to overestimate the role of academic historians in the production of historical knowledge.

Second, they suggest that policy-making today is rarely informed by history. William Hague, a British politician who does consult with historians, is presented as a rare and honourable exception to the prevailing trend towards ahistorical modes of thinking about policy. Another interpretation is that policy is frequently informed by incorrect interpretations of history. Political scientists have shown that historical-analogous reasoning is actually quite common and influential. For instance, analogies to Munich 1938 are often made during US discussion of foreign policy. Indeed, this gave rise to the joke that for Senator John McCain, it’s always Munich, always 1938.

Third, I’m amused by the idea that there was once a golden era in which academic historians had a significant, and positive influence on public policy. Hmmm… I don’t know about the positive bit. David Armitage’s Guardian piece is accompanied by a picture of John K Kennedy with Arthur Schlesinger Jr. In the context of Armitage’s article, this choice of image suggests that Kennedy was a better president because he was advised by historians. First of all, Kennedy’s intellectual advisers included the economists John Kenneth Galbraith as well as Schlesinger. Moreover, I’m not certain if Kennedy’s presidency is an example of great public policy,given that JKF’s handling of the Cuban Missile Crisis nearly brought the world to the edge of nuclear Armageddon!!! Kennedy viewed the world through the lens of Britain’s appeasement of Hitler in the late 1930s, a historical analogy that likely influenced his decision to “get tough” with the Soviets. Note that during the Eisenhower Presidency, there was a partial thaw in relations with the USSR.

Economists have been accused of contributing the the climate of opinion that resulted in the 2008 financial crisis. Let’s assume that this claim is correct.  I think that we would all agree that while the social impact of the 2008 crisis was negative, it was less negative than than a nuclear exchange between the superpowers would have been. Ms Newitz’s writes that “we began making decisions based on economic principles rather than historical ones. The results were catastrophic.” Hmmm… I think that I would prefer a financial catastrophe to a thermonuclear catastrophe any day of the week!

Armitage writes:

The mid-1960s were the high-water mark for historians in public policy. In the US, Harvard historian Arthur Schlesinger Jr became the court historian of John F Kennedy’s Camelot as a presidential adviser, and the radical historian of American foreign relations William Appleman Williams turned down the chance to steer Latin American policy for the Kennedy administration. (At least he was asked.) The last historian seconded to the White House was Eric F Goldman, a professor of American history from Princeton, who was a special adviser to Lyndon Johnson in 1963-66. In 1965, a historical section was added to Britain’s Treasury but its operations were wound up in 1976, “after its early advocates moved on and the relevance of its work to the ‘man at the desk’ became subject to concerted challenge”, as the historian of public policy Alix Green has observed.

I think that David Armitage can find better data points to support his thesis that academic historians can have a positive influence on the making of foreign policy than the disastrous presidency of Lyndon Johnson.  It is pretty clear in retrospect that Johnson’s decision to escalate the war in Vietnam was the wrong choice and that this choice was influenced by a particular interpretation of history that his historian advisers did not challenge.

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Sources on the historic turn in management research.

Clark, Peter, and Michael Rowlinson. “The treatment of history in organisation studies: towards an ‘historic turn’?.” Business History 46, no. 3 (2004): 331-352.

Rowlinson, Michael, Charles Booth, Peter Clark, Agnes Delahaye, and Stephen Procter. “Social remembering and organizational memory.” Organization Studies (2009).

Kipping, Matthias, and Behlül Üsdiken. “History in Organization and Management Theory: More Than Meets the Eye.” The Academy of Management Annals 8, no. 1 (2014): 535-588.

Burghausen, Mario, and John MT Balmer. “Repertoires of the corporate past: explanation and framework. Introducing an integrated and dynamic perspective.” Corporate Communications: An International Journal 19, no. 4 (2014).

Rowlinson, Michael, John Hassard, and Stephanie Decker. “Strategies for organizational history: A dialogue between historical theory and organization theory.” Academy of Management Review (2013): amr-2012.