 |
 |
|
Lazonick (1991)Management > Comparative Management > Lectures > Independent Research > Lazonick > Managerial capital
Managerial capitalThe managerial revolution in the US was the result of the railroads in the 1840s, which mobilised the workforce. It became necessary to build managerial structures which could co-ordinate the flow of people and goods. Railroads also provided opportunities for firms to engage in vertically integrated strategies and develop resources and technologies. This resulted in the emergence of machinery manufacture, which required technological prowess, large investments and marketing capabilities. Product innovation became central to the success of a firm and the building of capabilities saw the rise of science-based electrical industries at the end of the nineteenth century. With this came the demand for specialised workers and an educational system which geared students towards these industries. By the 1920s higher education became necessary for embarking upon a managerial career. The continuous growth of the firm was essential for creating incentives for managers to use their skills to achieve organisational goals. In order to integrate technical skills into the firm's strategies, many specialists were turned into generalist managers. This was the key to the multidivisional organisation. By separating strategic from operating decision-making, top management could focus its attention on the firm's vision, but to ensure that the operating divisions respond to the goals of the firm, middle management was developed to who authority was delegated. Centralised control fostered organisational integration.
|
|
