The future of business history in Europe and around the world Professor Ray Stokes Centre for Business History in Scotland University of Glasgow

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The future of business history in Europe and around the world

Professor Ray StokesCentre for Business History in ScotlandUniversity of Glasgow

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Overview

Introduction

The tradition

Recent developments in Europe

Recent developments around the world

Conclusion

Introduction

Business history as a growing and dynamic field of study

Look at some of the ways in which it is developing just now and in the near future

But start with a sketch of how our field developed through the second half of the 20th century

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The tradition

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Key shapers of the field: Ronald Coase (left) and Alfred DuPont Chandler, Jr

The tradition

Coase: “The nature of the firm”, Economica 4 (Nov 1937): 386-405

•In traditional economic theory to that point (and for long afterwards),

• Firms conceptualised as a production function;• Assumption of perfect information available to all;• Assumption that firms are markets are practically interchangeable.

•Coase argued that traditional economic theory cannot explain why firms exist

• As a matter of fact, they exist to avoid the market, i.e. to avoid uncertainty and risk and to lower transaction costs

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The tradition

As refined and articulated by Oliver Williamson:

“…the modern corporation is mainly to be understood as the product of a series of organizational innovations that have had the purpose and effect of economizing on transaction costs” (Williamson 1981, S. 1537)

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The tradition

Alfred Chandler as defining subject matter and approach for new field of “business history”, which emerged as a major force in the 1950s in the USA and western Europe

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The tradition

Chandler: Main characteristics of his approach:The development of the large “modern” firm was the result of the

“dynamic interaction” between corporations on the one hand and itheir environment (i.e. Technology, the market, state regulation) on the other.

Other key characteristics–USA as the pioneer and also the model for development elsewhere

–Focus on “Big Business” and processes of separation of ownership and management on the one hand and of “divisionalisation” on the other

–Exclusive focus on manufacturing industry

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In the tradition...

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The tradition

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“Firm biography” as traditional form of business historiography, which continues to be a dominant form of research and publication in the field.

The tradition

Strengths of the form and approach:

–Relatively simple to research and present

–At its best, can yield new or under-researched aspects of business history

–Can also serve as the basis for important and influential generalisations

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The tradition

But weaknesses in the Coasian conceptualisation and the Chandlerian approach:• The push to minimise transaction costs does not

explain all aspects of company behaviour, nor does this explain fully the variety of forms and sizes of companies.

• Chandler’s emphasis on the US as the model for development elsewhere and the inevitable development of firms into divisionalised big business simply does not match historical reality, something that has become increasingly apparent in the past few decades.

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Recent developments in Europe

It was especially through growing research activity on business history in western Europe that the limits to Chandler became particularly apparent:•Continued importance of small firms

•Centrality of family enterprise (especially in southern Europe, but also in the north—e.g. BMW and even VW!)

•Significance of state-owned enterprise (even more recently in spite of widespread privatisation)

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Recent developments in Europe

Organisational and other factors making European scholars more prominent in the field:•Increasing numbers

•Creation and growth of European Business History Association

•Centrality of Business History

•In particular in the UK and Scandinavia, but also to some extent elsewhere in Europe, employment and growing influence of business historians in business schools

• Note that this has not been the case in the USA, where business historians are generally excluded from business schools and find employment in history departments, which requires that the retool themselves to study “history of capitalism” rather than business history per se.

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Recent developments in Europe

Emerging themes: •Other forms of firm: their structures, strategies, governance arrangements, economic impact, and relationship with the state• Family enterprise• Small and medium-sized enterprise• State-owned firms

•“Beyond the firm”: Note here that firms, their structures, strategies, and so on remain at centre of analysis—otherwise it would no longer be business history!

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Recent developments in Europe

Beyond the firm: four dimensions• Two have long tradition in business history writing,

but are being expanded in some ways•Firms in the context of their industries—Porter notes that it is not nations, but firms, that compete, and they do so in the context of industry. Business historians are historicising and making more precise the term “industry”

•Firms in political context—business-government relations is a longstanding theme in business historiography, but this is being expanded in some ways, e.g. By looking at the interaction of firms and social movements

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Recent developments in Europe

Beyond the firm: Four dimensions• Two have a far less established tradition—in fact,

research in these areas very much in infancy•Business histories of “non-businesses”, i.e. Organisations that are not conventional profit-seeking firms, but which deploy rhetoric and practices of business (e.g. Charities, universities, “quangos” etc.)

•Business and the physical environment: • Impact of production processes on environment• Room for manoeuvre of firms in context of environmental movement and state

regulation• Environmental remediation as business opportunity (e.g. Waste management,

clean-coal and water treatment technologies, alternative fuels)

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Recent developments around the world

Globalisation and its impact• Impact of established firms, mostly from western

Europe, North America, and Japan•FDI

•Technology and organisational transfer

•Intercultural communication

• But also development of alternative arrangements/organisations/governance structures for firms in the context of more recent industrialisation owing to prior existence of firms or owing to ongoing differences in political systems, religious and cultural practices, etc.

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Recent developments around the world

World Business History Conference in Frankfurt, March 2014• Overwhelming response from around the world and

what that indicates• Possibilities for future development

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Conclusion

Firms, their strategies, and the actions of their managers have formed the most important objects of research in business history from the founding of the field, and that remains the case today.

But in order to really understand these things, and also in order to enter dialogue with other scholarly disciplines, business historians are increasingly enlarging their field of vision to include other types of firms, the firm in various contexts (“beyond the firm”), and the firm in countries and regions that have previously been ignored.

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Conclusion

This in turn requires enlarging the field to include new participants, not only with background in other fields, but also people with different cultural, religious, linguistic and other backgrounds from what has been the case previously.

Happily, the evidence is that all of this is happening.

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