Two decades have passed since the publication of The Visible Hand, Alfred D. Chandler, Jr.'s, magisterial account of the rise of the modern business enterprise in the United States. Although Chandlers pathbreaking work has been widely hailed as a landmark in business history, only rarely has anyone considered systematically its influence on the large body of historical scholarship on related topics. This essay is intended to help fill this gap. It is divided into two sections. The first section reviews Chandlers argument, touches on the relationship of Chandlers oeuvre to his personal background, and locates The Visible Hand in the context of American historical writing. The second considers how three groups of historians have responded to Chandlers ideas. These groups consist of champions who creatively elaborated on Chandler's intellectual agenda; critics who probed anomalies between Chandler's argument and their own research; and skeptics who rejected Chandlers analysis outright.

The “de-industrialization” of Britain since the 1970s and the emergence of a negative balance of payments in manufacturing in the early 1980s have provided a receptive context for accounts of failure in British business and the British economy. We have political economies of decline;2 powerful polemics against the British elite; and a range of historical explanations of the decline of industries and firms. Although the agenda for much British business history is still dominated by the issue of “decline” it is clear that the whole issue needs clarification. First and foremost much discussion of decline relies on a failure to be clear about the difference between absolute and relative decline, a failure to differentiate between relative decline and “doing badly,” and on faulty and partial international comparisons. Hannah is rightly worried by a brand of history which “explains an outcome which never happened…by a cause that is equally imagined.”

While Britain never had a scientific management movement like that in America, historians have exaggerated the negative reaction of British engineers to the ideas of F. W. Taylor and other American proponents of business efficiency. A review of the leading British engineering journals in the early twentieth century reveals that Taylorism received a fair amount of attention, and much of it positive. By the beginning of the First World War, the majority of trade journals were echoing Taylor's demands for a new type of management. The misapprehension on behalf of historians stems from a number of factors: an overemphasis on articles published during years of labor agitation, such as 1911 and 1912; and, a failure to appreciate the different way in which scientific management was perceived in Britain. This fuller understanding of British responses to Taylor and his ideas helps to elucidate a chapter in the broader history of British economic performance and managerial methods in the twentieth century.

In the literature on British economic decline entrepreneurship is typically assessed by its outcome. By contrast, this paper argues that the soundness of entrepreneurship is best tested by viewing it ex ante. In other words, it is the process, and not the product, of entrepreneurship that is important in determining its quality. When this is accepted, competence, rather than infallibility, becomes the criterion by which entrepreneurship is best judged. In the latter half of the article, this approach is applied to the British paper industry's search for a new source of cellulose in the second half of the nineteenth century.

This work presents a controlled sampling of texts which might, through further research, provide the basis for a broad theoretical investigation of the cultural response of British managers, engineers and entrepreneurs to the so-called second industrial revolution in the late nineteenth and early twentieth centuries. Also, the texts are organized by theme, as a preliminary effort to establish an empirical critique of prevailing historiographical interpretations of the content and influence of Britain's business culture with respect to competitive pressures from abroad.

The dominant paradigm in business history has for many years been the synthesis developed by Alfred D. Chandler, Jr. Like most paradigms that define a field of scholarship, Chandler's has attracted swarms of devotees and critics, and for some years, it was customary to perform a ritual bow toward his work in the first or second paragraph of any article appearing in the Business History Review. This was true whether the substance of the article appeared to support or contradict Chandlers concept of the development of modern private enterprise.

For Alfred D. Chandler, Jr., in Scale and Scope, “the British story provides a counterpoint, an antitheses, to the American experience.” Chandler shows that fewer of the largest firms appeared in Britain. British companies preferred to retain family or family-like control and management; he terms this “personal capitalism.” Firms were reluctant to recruit professional managers, and if they did so, they did not like them to have received much formal education. There were no business schools in the pre-1945 U.K. These personal capitalists on the whole preferred personal income to making the 3-pronged investments in manufacturing, marketing and management in the capitalintensive industries of the Second Industrial Revolution. The more complex the technical and managerial skills required in an industry, the worse these personal capitalists performed and the greater the missed opportunities. For Chandler, Britain stands as a warning of the unpleasant consequences of not adopting managerial capitalism.

Although it has not been recognized very clearly, Alfred Chandler offers a dual definition of modern business. One definition focuses on the formation of “managerial hierarchies;” this refers to the rise of professional managers, a development that eventually leads to the separation of management and ownership. The advent of the managerial firm, or managerial capitalism, symbolizes modern business. Chandlers other definition focuses on management structure and emphasizes the U-form (Unitary-form) or M-form (Multi-divisionalform), both of which are organizational types closely associated with the development of modern, large-scale firms. The modern firm usually has the characteristics of a managerial organization and employs either the U-form or M-form (typically the latter) structure.

It is perfectly correct to place the work of Alfred Chandler at the center of a discussion of globalization as seen by business historians. No other author in our field of studies has offered us so much both in terms of research results as well as tools for the analysis and definition of the global characteristics of the modern large enterprise. It is enough in this respect to consider his last book, Scale and Scope, where the author examined the history of six hundred firms (the top two hundred in the U.S., the U.K., and Germany) for the period from the 1880s to the 1940s.