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Alfred Chandler, Founder of Strategy: Lost Tradition and Renewed Inspiration

Published online by Cambridge University Press:  13 December 2011

Richard Whittington
Richard Whittington
Affiliation:
RICHARD WHITTINGTON is professor of strategic management at theSaïd Business School and Millman Fellow at New College, University of Oxford.
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Extract

Richard Rumelt, Dan Schendel, and David Teece are clear: “The foundation of strategic management as a field may very well be traced to the 1962 publication of Chandler's Strategy and Structure.” For these three doyens of strategy, Alfred Chandler was a fundamental influence on the shape of the strategic-management discipline that emerged in the 1960s and 1970s. Yet, unlike the two other pioneers they identify, Kenneth Andrews and Igor Ansoff, Chandler stood firmly outside the discipline, working as a business historian, not as a strategist. Remarkably, it is Chandler's work that resonates most strongly in the discipline today and, I shall argue, still offers the most powerful inspiration for scholarly work in the future.

Type
Articles
Information
Business History Review , Volume 82 , Issue 2: A Special Issue on Alfred D. Chandler Jr. , Summer 2008 , pp. 267 - 277
Copyright
Copyright © The President and Fellows of Harvard College 2008

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References

1 Rumelt, Richard P., Schendel, Dan E., and Teece, David J., “Fundamental Issues in Strategy,” in Fundamental Issues in Strategy: A Research Agenda, ed. Rumelt, Richard P., Schendel, Dan E., and Teece, David J. (Boston, 1994), 17.Google Scholar

2 Ramos-Rodríguez, Antonio-Rafael and Ruíz-Navarro, José, “Changes in the Intellectual Structure of Strategic Management Research: A Bibliometric Study of the Strategic Management Journal,” Strategic Management Journal 25 (Oct. 2004): 981–1004.CrossRefGoogle Scholar

3 These works were by Andrews, Kenneth, The Concept of Corporate Strategy (Home-wood, Ill., 1971)Google Scholar and Ansoff, Igor, Corporate Strategy (New York, 1965).Google Scholar

4 Chandler, Alfred D. Jr, Strategy and Structure: Chapters in the History of Industrial Enterprise (Cambridge, Mass., 1962), 13.Google Scholar

5 Ibid., 14.

6 Ibid., 11.

7 For example, Chandler's definitions are quoted early in Besanko, David, Dranove, David, Shanley, Mark, and Schaefer, Scott, Economics of Strategy, 3rd ed. (Hoboken, N.J., 2003)Google Scholar; Grant, Robert, Contemporary Strategy Analysis, 6th ed. (Malden, Mass., 2008)Google Scholar; and Whittington, Richard, What is Strategy-and Does it Matter? 2nd ed. (Boston, 2000).Google Scholar

8 For his account, see Chandler, Strategy and Structure, 11 and 16.

9 Mintzberg, Henry and Waters, James A., “Of Strategies, Deliberate and Emergent,” Strategic Management Journal 6 (June 1985): 257–72.CrossRefGoogle Scholar

10 Nonaka, Ikujiro and Takeuchi, Hirataka, The Knowledge-Creating Company (Oxford, 1995).Google Scholar

11 Chandler, Strategy and Structure, 314.

12 Williamson, Oliver E., Markets and Hierarchies: Analysis and Antitrust Implications (New York, 1975).Google Scholar Chandler's own account of the multidivisional firm in terms of coordination costs is in Chandler, Alfred D. Jr, The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977).Google Scholar

13 Donaldson, Lex, The Contingency Theory of Organizations (Thousand Oaks, Calif., 2001).CrossRefGoogle Scholar

14 For an account, see Whittington, Richard and Mayer, Michael, The European Corporation: Strategy, Structure, and Social Science (New York, 2000).Google Scholar

15 Rumelt, Richard, Strategy, Structure, and Economic Performance (Cambridge, Mass., 1974).Google Scholar See also the evaluation by Spender, Jason, “Business Policy and Strategy: An Occasion for Despair, a Retreat to Disciplinary Specialisation or for New Excitement?” Academy of Management Best Papers Proceedings (1992): 42–46.CrossRefGoogle Scholar

16 Fligstein, Neil, The Transformation of Corporate Control (Cambridge, Mass., 1990).Google Scholar See also Fligstein's essay, “Alfred Chandler and the Sociology of Organizations,” in this issue.

17 Hall, David J. and Siais, Maurice, “Strategy Follows Structure!” Strategic Management Journal 1 (Apr. 1980): 149–83.CrossRefGoogle Scholar

18 To a certain extent, Chandler anticipated the argument for reverse causality, and he certainly conceded it in his introduction to the 1989 edition. See Chandler, Strategy and Structure, 394.

19z Mintzberg, Henry, “The Design School: Reconsidering the Basic Premises of Strategic Management,” Strategic Management Journal 11 (Mar. 1990): 171–95.CrossRefGoogle Scholar

20 Rumelt, Richard, “Towards a Strategic Theory of the Firm,” in Competitive Strategic Management, ed. Lamb, Robert (Upper Saddle River, N.J., 1984), 560–70.Google Scholar

21 Chandler, Scale and Scope, 8.

22 Teece, David, Pisano, Gary, and Shuen, Amy, “Dynamic Capabilities and Strategic Management,” Strategic Management Journal 18 (July 1997): 509–33.3.0.CO;2-Z>CrossRefGoogle Scholar

23 Critics of Chandler's account of relative economic performance include Hannah, Leslie, “Scale and Scope: Towards a European Visible Hand,” Business History 33 (Apr. 1991): 297–307CrossRefGoogle Scholar; and Broadberry, Stephen, The Productivity Race: British Manufacturing in International Perspective, 1850–1990 (New York, 1997).CrossRefGoogle Scholar

24 Rumelt, Schendel, and Teece, “Fundamental Issues in Strategy,” 16.

25 Kipping, Matthias and Üsdiken, Behlül, “Business History and Management Studies,” in Jones, Geoffrey and Zeitlin, Jonathan, The Oxford Handbook of Business History (New York, 2008)Google Scholar; and Whittington, Richard, “Strategy after Modernism: Recovering Practice,” European Management Review 1 (Spring 2004).CrossRefGoogle Scholar

26 Calculated from Phelan, Steven E., Ferreira, Manuel, and Salvador, Rommel, “The First Twenty Years of the Strategic Management Journal,” Strategic Management Journal 23 (Dec. 2002): 1161–68.CrossRefGoogle Scholar

27 Whittington, Richard, “The Work of Strategizing and Organizing: For a Practice Perspective,” Strategic Organization 1 (Feb. 2003): 117–26.CrossRefGoogle Scholar

28 Outstanding examples include, respectively, Carroll, Glenn R. and Hannán, Michael T., The Demography of Corporations and Industries (Princeton, 2000)Google Scholar; Christensen, Clayton M., The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Boston, 1996)Google Scholar; and Fligstein, The Transformation of Corporate Control.

29 Zucker, Lynne G., “Combining Institutional Theory and Population Ecology: No Legitimacy, No History,” American Sociological Review 54 (Aug. 1989): 542–45.CrossRefGoogle Scholar

30 Chandler himself did not wholly accept Williamson's transaction-cost economics. See Chandler, Alfred D. Jr, “Organizational Capabilities and the Economic History of the Industrial Enterprise,” Journal of Economic Perspectives 6 (Summer 1992): 79–100.CrossRefGoogle Scholar

31 Van de Ven, Andrew H., Engaged Scholarship: A Guide for Organizational and Social Research (New York, 2007).Google Scholar

32 For example, see “Comparative Perspectives on the Managerial Revolution,” Business History 49 (special issue, Aug. 2007).