What Knowledge is Useful? > History
Audio Clip — McCraw on Comparative
But the fundamental answer to your question about why this happened was a grand collaboration between Alfred Chandler and Richard Tedlow. And that occurred in the academic year 1984-85, when Chandler built a structure to the course—that is, a logical progression about exactly how this thing developed, The Coming of Managerial Capitalism, which is what the course was called, and still is.
And it was spectacular, it was great material, which drew on Henrietta Larson, and some of what Hidy had done, and some of what Gras had done, but gave it a structure, just the way Al gave an intellectual structure to the field of business history in general. And combining that with Tedlow’s just unparalleled skills as a classroom teacher did for business history—something like what John Rosenblum’s splendid talent as a classroom teacher did to Bruce Scott’s vision for BGIE, for what became BGIE. I hadn’t thought of that parallel until just this minute, oddly enough, since I was part of both of those adventures.
So, now, the only problem with the course as it was when I started teaching it, in about 1986 was that it climaxed in the 1920s, so that the story from like, say, 1790 to 1920 was fabulous, but the climax of the course was the invention of the multidivisional structure, as described in Strategy and Structure, a book which, by the way, nearly everybody on the faculty had read, and influenced, of course, the rise of strategy as a discipline as well. Pretty profoundly influenced it. In some people’s opinion influenced it more than the Andrews/Christensen tradition, because of the just irrefutable detail, and intellectual structure of that book, which is a comparative book. It’s not just about General Motors, Sears, Standard Oil, and DuPont. They’re the big four case studies, but then the rest of the book takes that structure, and compares it with the structure of the seventy biggest companies in the United States, and finds that in some companies it doesn’t work. It’s not appropriate. A single product company, steel, for example, it’s not necessary. It’s only in multi-product sort of things.
But the key word here is comparative. Just in the way that BGIE became comparative across countries, this course became comparative across industries. And in the wake of the conglomerate movement, and the unwisdom of unrelated diversification, in which, you know, the Harold Geneen philosophy, that if you can manage industry A, you can also manage industry B, or all the way through Z, which is a preposterous mistake of both public policy and business practice.
It became clear that each industry, at least to me, has a peculiar identity that shapes the options of the people who are the major players in it. You wouldn’t find someone like, oh, let’s say Larry Page and Sergey Brin of Google, you know, running a company like Ford—it would just be a complete cognitive dissonance on both sides. But, you know, to construct this unparalleled search engine, that’s a whole different story. Both of them math whizzes, both of them academic families.
So now we arrive at this, you know, marriage made in heaven, Tedlow and Chandler, with Tedlow knowing what he had in Chandler, and Chandler sort of knowing what he had with Richard. They put together this thing. Richard writes a 400-page teaching manual that makes it possible for me, or any talented historian, who can, you know, who has classroom skills to just walk in there, and knock the cover off the ball. So I give them all the credit for that.