The Rise and Decline of Managerial Development

Abstract

Alfred D. Chandler’s work highlighted the complicated interplay between markets and firms, especially the arrangements created by firms to buffer and manage market forces. Arguably his most important work examines one aspect of firms, organizational structure, and how it changed in response to the competitive needs of growing businesses. Much the same approach can be applied to understanding other aspects of firms such as the structure of the most important jobs in corporations, executive positions, and how those positions have been filled over time. Here the interplay includes a different market, the labor market. The arguments that follow trace the evolution of executive roles from the early days of corporations, where executive jobs were largely shaped by the labor market, to internalized and bureaucratized arrangements consistent with the idea of an integrated “Chandlerian” firm after the 1950s, back to something much closer to the market-dominated approach following the 1982 recession. In large measure, the change seems driven by the different context that business faced and the interplay with labor markets that made internal development more difficult. The implications for the future of large-scale Chandlerian firms may be considerable.