Transcript

Wallace Donham, the school’s second dean, played a critical role in institutionalizing the Harvard Business School. . . . .

He’s an individual who came from the world of practice, and he had enormous intuition for how organizations work. Not sort of abstract principles the way, perhaps, Edwin Gay had about how an organization should work, versus the way it did work. . . . .

I think at the same time, while Donham brought a different set of skills than Edwin Gay, they did share a philosophy that this shift that was going on in America toward an industrial society really was not just a minor shift, but really was a reconfiguration of many social institutions. And it was really how you design management and corporations would sort of figure into the idea of whether corporations would work in the general interest of the large society in which they were embedded, or would there be constantly a tension between the interests of a large corporation, and the larger interests of society in which it is embedded? And both of them shared a view that the corporations have to be run in the interests of the larger society in which its embedded, within the rules of the democratic framework, within the rules that the purpose of corporations went way beyond their economic logic, but rather had a larger role to play in stabilizing the society in which they were living.

You have to remember that this was also a period of radical labor going on. There was a great fear, given the post-Russian revolution that was going on, that similar radical elements could make their appearance in the United States. And there was some evidence that was already happening. There was a very strong union movement that was going on in the United States. There was a kind of World Workers Party that was going on. There were violent strikes going on.

And the view was that if you could get corporations and the managers who were administering them to have a more enlightened view—one that was not based on authoritarian logic, but more of a logic of running it in a way that allowed people to both express their interests in a productive way—corporations would not be a destabilizing force in society but, in fact, a stabilizing force in American society.