The Managerial Enterprise

2677 Words11 Pages
In my opinion, the model of the large-scale ‘managerial enterprise’ as put forward by the famous business historian Alfred Chandler has not been followed completely by all of the world’s leading economies. This essay will therefore be structured as follows: first I will briefly explain Chandler’s theory of the large-scale managerial enterprise, putting it into context of time and place and pointing out the major flaws of his theory. Then, I will attempt to justify my opinion by using the Japanese enterprise system, paying attention to the role of external influences such as the government and the availability of finance, as well as the role of business networks. Then, I will try to explain that Chandler’s theories of ‘personal capitalism’…show more content…
The Japanese Enterprise System
Many aspects of the Japanese enterprise system resemble Chandler’s description of the large-scale managerial enterprise. For instance, some though not all businesses have developed managerial hierarchies of which personal ownership was separated from the business (Morikawa as cited in Abe and Fitzgerald, 1995).
The Japanese enterprise system is much less diversified than Western competitors (Fruin, 1992; Abe, 2009). Their focus tends to be on specific products and product lines, as compared to American businesses that tend to diversify into unrelated product areas over time. Chandler argues that businesses should remain focused to remain competitive and according to Abe (2009), this is another way in which Japanese enterprises fall into the logic of Chandler’s framework.
The Japanese Enterprise System however, differs from Chandler’s large-scale managerial enterprise several ways. To begin with, many of the Japanese businesses were much smaller than Western businesses, due mainly to the fact that the domestic market was not very large (Fruin, 1992) and so could not support mass production through mass consumption.
Other differences were in personnel management and in financial management (Abe, 2009). Practices in production, such as Quality Circles, job rotation and
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