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Putting France in the Chandlerian Framework: France's 100 Largest Industrial Firms in 1913

Published online by Cambridge University Press:  13 December 2011

Michael S. Smith
Michael S. Smith
Affiliation:
MICHAEL S. SMITH is associate professor of history at theUniversity of South Carolina.
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Abstract

This article presents a new list of France's 100 largest publicly-held manufacturing firms in 1913 and compares them to the 100 largest American, British, and German firms identified by Alfred D. Chandler, Jr., in Scale and Scope. The largest French firms clustered in the same industries as the largest firms in the other countries. They were much smaller than their American counterparts, but in some industries they compared favorably with their German counterparts in size. More importantly, many of the largest French firms were behaving like the leading industrial firms elsewhere, developing cutting-edge technology, investing in state-of-theart production facilities, and putting professional managers in charge of operations. In contrast to the notion that France was a follower in the Second Industrial Revolution and eschewed the trend toward managerial enterprise in the early twentieth century, this article presents a picture of considerable dynamism, with France's leading industrial firms laying the organizational foundations from 1900 to 1930 for the managerial capitalism that would flourish in France in the post-Second World War era.

Type
Articles
Information
Business History Review , Volume 72 , Issue 1 , Spring 1998 , pp. 46 - 85
Copyright
Copyright © The President and Fellows of Harvard College 1998

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References

1 Chandler, Alfred D. Jr., Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass., 1990Google Scholar).

2 Chandler, Scale and Scope, 389-392.

3 Lévy-Leboyer, Maurice, “The Large Corporation in Modern France,” in Chandler, Alfred D. Jr., and Daems, Herman, eds., Managerial Hierarchies (Cambridge, Mass., 1980), 154Google Scholar.

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5 The key reference on this point remains Cameron, Rondo, France and the Economic Development of Europe (Princeton, N.J., 1960Google Scholar).

6 For a review of the literature on French industrial and business performance in the nineteenth and early twentieth centuries, see Heywood, Colin, The Development of the French Economy, 1750-1914 (New York, 1995CrossRefGoogle Scholar).

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9 An earlier version of this list was presented in Smith, Michael S., “The Beginnings of Big Business in France, 1880-1920: A Chandlerian Perspective,” in Essays in Economic and Business History XI (1993), 1–24Google Scholar. That list was based primarily on annual reports printed in the periodical, Les Assemblées générales. The list here is considerably different in that it excludes “free-standing companies” that operated outside of France and its colonies and it incorporates much new research in the Archives d'Entreprises of the Archives Nationales [hereafter AN], particularly the files of annual reports and other printed material in 65 AQ. It also has benefitted from consultation of a list of the 200 largest French firms in 1912 based on the Annuaire Desfossés (the source used by Houssiaux but not available to me) that is included in an as yet unpublished work by Professor Bruce Kogut of the Wharton School. Kogut's list was the source for the table showing distribution of France's largest firms by industry in 1912 presented by Chandler and Hikino in Big Business and the Wealth of Nations, 32. I wish to thank Professor Kogut for making this work available to me.

The decision to construct a list of the top 100 French industrial firms à la Houssiaux, rather than the top 200 à la Chandler, was based on the concern, also expressed by Cassis (Management and Business, 214-226), that going beyond the top 100 French firms gets one into firms that are too small to qualify as “big business” and that comparisons between French firms and American, British, and German firms below the top 100 are of limited value in defining common characteristics of big businesses.

It should be noted that Maurice Lévy-Leboyer, for his chapter on “The Large Corporation in Modern France” in Managerial Hierarchies, assembled a list of France's 100 largest industrial firms on the basis of total market value of shares and bonds. This list would be especially useful for comparing French firms to Chandler's list of the 200 largest British firms, which were selected and ranked on the basis of “market value of shares.” However, Lévy-Leboyer published only summary statistics based on his list, not the list itself, and the worksheets on which these statistics were based are no longer extant (letter to author, 7 June 1997).

It should also be noted that in his new book, Big Business: The European Experience in the Twentieth Century (Oxford, 1997Google Scholar), Youssef Cassis has compiled his own list of French big businesses circa 1910 (pp. 242-244). However, he explicitly rejects Chandler's focus on manufacturing enterprises as too narrow, so his list of thirty-four very large companies, drawn from the Annuaire Desfossés on the basis of paid-up capital of 50 million francs and/or a workforce of 10,000, includes only fifteen firms that would fall in the SIC groups utilized by Chandler. The rest are in banking, insurance, shipping, distribution, and utilities.

10 The distribution of these firms among industries is very similar to the distribution of the top fifty British firms in 1904-05 as listed by Peter Wardley except that Wardley includes financial institutions in his list. See Wardley, Peter, “The Anatomy of Big Business: Aspects of Comparative Development in the 20th Century,” Business History 33 (1991): 278–80CrossRefGoogle Scholar.

11 According to Lévy-Leboyer, on the basis of market valuation, there were seventeen coal mines among the top 100 industrial firms. See Chandler and Daems, Managerial Hierarchies, 130.

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13 The distribution of the 100 largest French firms ranked by assets is quite similar to the distribution that Lévy-Leboyer arrived at using market valuation except that, again, he included seventeen coal mines in the top 100 (see Chandler and Daems, Managerial Hierarchies, 130):

14 As of 1910, the population of France was around 39 million, versus 92.4 million in the United States.

15 The enormous size of the three largest German electrical firms skews the mean asset size of the largest German firms in Group 36 dramatically upward. The mean size of the next four German electrical firms is virtually the same as the mean asset size of the top seven French electrical firms. Consistent with this, testing the two populations (the largest German and French electrical firms) with the Wilcoxon Rank Sum Test shows no statistically significant difference.

16 Again, testing the two populations—German and French transportation equipment manufacturers—with the Wilcoxon Rank Sum Test shows no statistically significant difference.

17 The defense of the family firm is part of a larger critique of Chandler's “organizational determinism” that calls into question the linkage between national economic success and the organizational form and ownership structure of a country's leading business firms. See the special issue on “Family Capitalism” in Business History 35 (Oct. 1993Google Scholar), especially the introductory article by the editors, Geoffrey Jones and Mary B. Rose, and the contributions of Roy Church (“The Family Firm in Industrial Capitalism: International Perspectives on Hypotheses and History,” 17-43) and Emmanuel Chadeau (“The Large Family Firm in Twentieth-Century France,” 184-205). See also Youssef Cassis, Big Business, 164-168.

18 See Chandler, Alfred D. Jr., “Response to the Contributors,” Business History Review 64 (Winter 1990): 247CrossRefGoogle Scholar.

19 The iron and steel companies in Table 3 that originated in Lorraine after 1860 include Acièries de Longwy, Acièries de Micheville, Forges et Acièries du Nord et de l'Est, Pont à Mousson, Senefle-Maubeuge, Pompey, Saulnes-Marc Raty, Aubrives et Villerupt, and Escaut-Meuse. The older firms from other parts of France that had operations in Lorraine by 1913 include Marine-Homécourt, Schneider, Châtillon-Commentry et Neuves Maisons, and Montataire.

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27 For a fuller account of the early years of Marine-Homécourt, see Smith, Michael S., “The Emergence of Managerial Capitalism in France, 1880-1930: Three Case Studies,” in Essays in Economic and Business History 13 (1995): 41–53Google Scholar.

28 In describing the company's operations at Homécourt, an analyst for the Crédit Lyonnais wrote in 1908 that “no plant in the Meurthe-et-Moselle possesses a production setup (outillage) at once as modern in all its parts and as well-conceived in the productive power of its successive stages” (Crédit Lyonnais Archives, Etudes financières, [hereafter CL-EF] DEEF 21068).

29 See Lévy-Leboyer, Maurice, “Hierarchical Structure, Rewards, and Incentives in a Large Corporation: The Early Managerial Experience of Saint-Gobain, 1872-1912,” in Horn, Norbert and Kocka, Jürgen, eds., Law and the Formation of the Big Enterprises in the 19th and Early 20th Centuries (Göttingen, 1979), 451ffGoogle Scholar, and Daviet, Jean-Pierre, Un destin international: La Compagnie de Saint-Gobain de 1830 à 1939 (Paris, 1988), 226–251Google Scholar.

In “The Large Family Firm in Twentieth Century France,” Business History 35 (1993): 184–205CrossRefGoogle Scholar, Emmanuel Chadeau classifies Saint-Gobain as a family firm until the 1960s, apparently because of the ability of several families (the de Vogüés, the Hély d'Oissels, and the Olliviers) to place members on the board and in the presidency generation after generation. But this strains the concept of “family firm.” From its origins, the management of Saint-Gobain was collective and the ownership dispersed. Daviet (648-49) estimates that in 1913 there were 1926 shareholders with none holding more than 2 percent of the total stock. By 1939, there were 50,000 shareholders. For a discussion of the corporate culture of Saint-Gobain in the twentieth century, see Daviet, “Culture d'entreprise: Saint-Gobain entre l'ancien et le neuf,” Revue française de gestion (sept.-oct. 1988): 72-82.

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32 By 1913, Société d'Electrochimie had seven plants producing chlorates, aluminum, and sodium, plus a plant near Marseille for alumina. In 1919 it merged with the Forges et acièries électriques P. Girod of Ugine and would thereafter be known as “Ugine.” See AN 65 AQ P117.

33 Morel, Paul, dir., Histoire technique de la production d'aluminium (Grenoble, 1991), 32-64, 76Google Scholar; Mioche, Philippe, L'Alumine à Gardanne de 1893 à nos jours: une traversée industrielle en Provence (Grenoble, 1994), 17–28Google Scholar; Gignoux, C-J, Histoire d'une entreprise française (Pechiney) (Paris, 1955), 65–118Google Scholar.

34 Gignoux, 65-118. Aluminium Française is the subject of a recent doctoral thesis by Hachez-Leroy, Florence, “L'Aluminium Française, instrument d'une stratégie de groupe, 1911-1960” (Université de Paris IV, 1995Google Scholar), while the organizational development of PCAC is the subject of the doctoral thesis of Cailluet, Ludovic, “Stratégies, structures d'organisation, et pratiques de gestion de Pechiney des années 1880 à 1971” (Université de Lyon II, 1995Google Scholar).

35 For the Société Centrale de Dynamite, see Armand Galliot, “75 ans d'activités d'un holding: La Société Centrale de Dynamite, 1887-1962” in AN 65 AQ P3121. On Malétra, see Paris, Exposition universelle, 1900, Rapports du jury international, Groupe XIV, class 87, part I, pp. 42-45. On Poulenc Frères, see AN 65 AQ P269 and Cayez, Pierre, Rhône-Poulenc, 1895-1975 (Paris, 1988), 42–47Google Scholar.

36 See the annual report for 1913 in Assemblées générales, 1913, p. 1205, and “Cinquantième de la Société L'Air Liquide, octobre 1902-octobre 1952,” in AN 65 AQ P41. For information on Air Liquide's product line in 1913, see Claude, Georges, Liquid Air, Oxygen, Nitrogen (London, 1913), 406–413Google Scholar.

37 See Lanthier, Pierre, “L'Industrie de la construction électrique en France avant 1914,” in Caron, François and Cardot, Fabienne, dirs., Histoire de l'électricité en France, t. 1 (Paris, 1991), 671–726Google Scholar.

38 According to Lanthier (p. 693), General Electric initially had a 40 percent share of the French Thomson-Houston Company (THF), but it did not increase its investment in the company as Thomson-Houston rapidly augmented its capital in the late 1890s so that “in 1900 the capital of THF was overwhelmingly under French control.”

39 See the annual report in Assemblées générales, 1913, pp. 1249-53.

40 Jules Rapp, “Aux origines de la Cie Générale d'Electricité,” Bulletin d'histoire de l'électricité, décembre 1985, 103 ff, and Marseille, Jacques, dir., Alcatel-Alsthom: Histoire de la Compagnie Générale d'Electricité (Paris, 1992), 33–92Google Scholar.

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43 Assemblées générales, 1913, pp. 81ff; CL-EF DEEF 24006; Saul, Samir, La France et l'Egypte de 1882 à 1914: Intérêts économiques et implications politiques (Paris, 1997), 375–421CrossRefGoogle Scholar. It should be noted that France's second largest public-held sugar refiner (and the largest in Marseille), the Société Nouvelle des Raffineurs de Sucre de Saint-Louis, was also among France's 100 largest firms. Its story is told in Fierain, Jacques, Les raffineries de sucre des ports en France, XIXe-début du XXe siècles (New York, 1977), 437–569Google Scholar. Two private sugar refiners also based in Paris, Lebaudy and Sommier, were in the same league, but their histories have yet to be written.

44 For an overview of the French shipbuilding industry and a comparison to the British industry, see Lorenz, Edward H., “The Politics of Development: The Labour Process in the British and French Shipbuilding Industries, 1880-1930,” Journal of European Economic History 13 (1984): 599–634Google Scholar, and Economic Decline in Britain: The Shipbuilding Industry, 1890-1970 (Oxford, 1991), 34–38Google Scholar.

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49 See particularly Alfred D. Chandler, Jr., and Takashi Hikino, “The Large Industrial Enterprise and the Dynamics of Modern Economic Growth,” 24-57, and Alfred D. Chandler, Jr., “The United States: Engines of Economic Growth in the Capital-intensive and Knowledge-Intensive Industries,” 63-101, in Big Business and the Wealth of Nations, eds. Chandler et al.