The School first began thinking about the value of history in the mid 1920s, when a separate HBS campus was becoming a reality, and a new Business School library was starting to take shape.

What should go in that library? What should it attempt to collect, catalogue, and preserve? The emerging case method argued in favor of collecting a wide range of materials, since students might be expected to augment their case readings with library materials.  Several professors argued that the library should collect "ephemeral" business materials—much of which was destroyed in the normal course of business, but which if preserved could provide vital insights into the realities of enterprise. Could cases be written based on historical materials?  Much seemed possible, but little was certain.

In 1924, these various proposals came together in a new organization: the Business Historical Society, which would acquire materials to be deposited in the Business School's library. The BHS founded the Bulletin of the Business Historical Society in 1926, a quarterly that was renamed the Business History Review in 1954.

The completion of Baker Library in 1927 accelerated the School's "dragnet" for relevant historical materials, which aimed (in the mind of librarian Charles C. Eaton) at "absolute completeness."  Thousands of books, pamphlets, and artifacts—ranging from trade cards to lunch pails—were acquired, as well as the complete records of companies that had gone out of business or otherwise changed hands. Among the most important acquisitions were the R. G. Dun & Co. collection, which included 2,580 volumes of handwritten credit reports on individuals and firms from the U.S., the western territories, Canada, and the West Indies; and the Medici and Barberini papers, which document the evolution of business in Italy between 1400 and the 1800s. Another rare resource is the Kress Collection: the personal library of British collector Herbert Somerton Foxwell, the acquisition of which by HBS in 1936 was made possible by a gift from retailing magnate Claude W. Kress. The School's "Historical Collections" have been supplemented regularly ever since. Today, they comprise a deep and varied record of business over the centuries—including collections from 20th-century companies like Lehman Brothers and Polaroid—and they recently received a new "home" in Baker Library, through the generosity of the de Gaspé Beaubien family.  

But at the outset of this ambitious collecting effort, one obvious question remained: To what practical purposes could all this material be put? To help answer that question, Dean Donham in 1927 persuaded an economic historian, N. S. B. Gras, to join the faculty as the School's first "professor of business history," in what was probably the first formal chair in business history in the U.S.: the Straus Professorship. Gras first launched a short-lived journal (The Journal of Economic and Business History) which failed in part due to the Depression, but also due to its confused purpose. Gras also introduced a business-history module into the second-year Business Policy course in 1927, and launched a second-year Business History elective the following year.

Some on the faculty remained skeptical about the usefulness of business history. Dean Donham was fully committed, however, in part because he was convinced that sharp recessions (such as the 1920-22 downturn) tarnished the reputation of business unfairly—a concern that only intensified during the Great Depression. At the same time, studies in business history tended to inject the "human factor" into business—an ingredient in which Donham himself was particularly interested, and which tended to get downplayed in, or even left out of, case discussions. Meanwhile, student enrollments in the Business History electives were consistently high, suggesting that students themselves found business history useful. Some faculty outside the area felt strongly that Business History made up for the ephemeral nature of many cases and case discussions, and advocated for its inclusion in the required curriculum.

A stream of related publications started emerging from the School, mostly under Gras's direction. These included the Harvard Studies in Business History a series of single-company monographs and books that represented the first stage in the evolution of scholarship in business history. Ralph and Muriel Hidy, as well as Henrietta Larson, contributed major books to this series.

Gras remained on the faculty through the early 1950s, but the center of activity in business history had temporarily relocated "across the river" at Harvard's Research Center in Entrepreneurial History, organized in 1948 and headed by Baker Librarian Arthur Cole. The Center was an interdisciplinary breeding ground of distinguished scholars, including economist Joseph Schumpeter, who helped train several generations of young researchers. One of these young scholars—Alfred D. Chandler—subsequently emerged as one of the most productive and renowned business historians in the world. Chandler drew on the resources of Baker Library to write the groundbreaking Strategy and Structure in 1962. In 1970, he was a visiting professor at HBS, and in 1971, joined the faculty as the second Straus Professor. Chandler cemented his reputation as the preeminent business historian with the publication in 1977 of The Visible Hand, which traced the rise of managerial capitalism in America, and subsequently won the Pulitzer Prize and the Bancroft and Newcomen Awards. He followed that up with Scale and Scope (1990), which explored the relative performance of 200 major companies in three countries over a century.

Thomas K. McCraw, Chandler's colleague, alter ego, and ultimate successor as head of the Business History area, made his mark with the publication of Prophets of Regulation (1984), which won both the Pulitzer Prize and the Newcomen Award. McCraw closed an intellectual and historical circle within the Business History area with the publication (in 2007) of Prophet of Innovation, a study of the personal and professional life of Joseph Schumpeter.

Alongside Chandler and McCraw emerged a distinguished cadre of business historians, including Richard Vietor, Richard Tedlow, Nancy Koehn, Geoffrey Jones, and others. They contributed not only scholarly research, but also to the Business History "foundations" module in the required first-year curriculum (1996) and a number of elective courses. Student demand for business history—perhaps the best measure of a subject's perceived relevance—remained high. In 1999, for example, 406 second-year students (slightly less than half of the class) enrolled in The Coming of Managerial Capitalism, a comparative course that emerged as one of the School's most popular electives. Capitalism, making it one of the School's most popular electives.

In a book published in 1999, members of the Business History faculty group published an essay which included, among other things, a summary of some of the useful lessons that have emerged from the study of business history over the years. These include, for example:

  • Capitalism comes in several flavors.
  • Government has legitimacy as a developer and regulator.
  • Social equilibrium should not be assumed.
  • Structural change imposes social cost.
  • Business requires moral choice.
  • Champions are driven.
  • Business must value both the individual and the institution.
Exterior of Baker Library Bookplate from Business Historical Society The Baker Library reading room in 1936 Looking into the Baker Library Historical Collections reading room in 2006 Rare books from the Kress Collection Account Book, 1531-1564, Convent of Benedictine Nuns, Empoli, Italy Entry for Abraham Lincoln in Dun & Co. collection N. S. B. Gras Arthur Cole and Donald Clark Alfred D. Chandler