In the years after World War II the large managerial enterprise became ever more powerful. It acquired control of an increasing share of the nation’s economic activities, as well as a growing part of the industrial production of Europe and the rest of the world. In 1947, the two hundred largest industrials in the United States (many of which were not yet fully diversified or divisionalized) accounted for 30 percent of the value added in manufacturing and 47.2 percent of total corporate manufacturing assets. By 1963, after most of these enterprises had adopted the new strategy and the new structure, they were responsible for 41 percent of the value added and 56.3 percent of assets. By 1968, that last figure had risen to 60.9 percent.45 These giant enterprises generated by far the largest share of nongovernment funds and provided most of the nongovernment personnel involved in industrial research and development. These same firms were the prime contractors used by the government in World War II and in the two decades of the cold war: They were the companies that provided the hardware for its atomic energy and space programs. They, too, were the same enterprises that continued to present the “American challenge” to European and other businessmen overseas.
This brief review of the spread of modern business enterprise after World War I can only hint at the diversity and complexity of the process. It cannot indicate the responses—some successful and others much less so— of individual enterprises or even of the institution as a whole, to the coming of the great depression, World War II, the cold war, or the continuing fluctuations of the business cycle. Nor does it attempt to delineate the costs as well as the benefits of efficient, high-volume exploi- tation of resources.
The purpose of this review has been only to emphasize the fact that modern business enterprise had reached its maturity in the United States by the 1920s. It continued to flourish and to spread in those sectors of the economy where administrative coordination proved more profitable than market coordination—in those sectors where the visible hand of manage- ment had demonstrated its value. The fundamental changes in the organi- zation of American business enterprise and of the economy came before World War I; and they came as a response to profound market and technological changes that began in the middle of the nineteenth century.
Source: Chandler Alfred D. Jr. (1977), The Visible Hand: The Managerial Revolution in American Business, Harvard University Press.