The Chandler Thesis—Some General Observations

Over the past twenty-five years there has been a steady accumulation of historical case studies of British companies which, in themselves, have shown an increasing level of sophistication of analysis; but this has not been matched by related efforts at building up a more general explanation of the process of change in business organisation and development. It may be that one reason for this is that the tradition of the heroic (or notorious) entrepreneur has exercised a strong influence on business historians. Moreover, there has been a somewhat uncritical reliance on certain concepts drawn from formal economic theory. The classical theory of the firm has been a favourite hunting ground; and although its assumptions have been steadily, and by now almost completely, undermined by empirical investigation, it is significant — and regrettable — that business historians have not played a major role in this process.1 Yet the outlines of an alternative, independent and, dare it be said, potentially very profitable line of approach was indicated some years ago by two important books: E. T. Penrose, The Theory of the Growth of the Firm (1959) and A. D. Chandler, Strategy and Structure (1962).2 Very recently, however, there have been signs — of which this symposium is one — of a growing interest among business historians in developing the approaches of Penrose and Chandler in the light of accumulating historical evidence.