Managerial Capitalism Is A Form Of Organizational Control

961 WordsDec 8, 20164 Pages
Managerial capitalism is a form of organizational control in which senior management is a central agent of power. . It emerged in late nineteenth, early twentieth centuries in the US, and replaced the traditional personal capitalism, which was built on competitive interaction among small firms. Some of the main causes were the Sherman anti-trust act in 1890, which ended horizontal cartel organizations. There were single companies capable of enforcing rationalization on the individual units. The mergers and acquisitions have decreased family influence, and investment banks became important. There was a great supply of production and business managers from engineering and business schools. Running a large company became more complex, and inside directors or full-time managers gained control of the instruments of power and of the organization, while outside directors sat on boards and represented owners and financiers of the corporations, and held the legal power over the organization. In certain industries, such as oil and steel, there was mainly vertical integration through mergers and acquisitions. In food and chemicals industry, the companies’ strategies were towards diversification into new products and markets. The best examples will be in the transportation industry, including Ford and General Motors. Ford got the advantage by dominating the low end auto market. General Motors used research and development and commercialized the new type of engine. The industries were
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