Forms of Enterprise in 20th Century Italy

Forms of Enterprise in 20th Century Italy

Boundaries, Structures and Strategies

Edited by Andrea Colli and Michelangelo Vasta

Taking an historical perspective, this unique book highlights the evolution of the many diverse forms of business enterprise, and discusses the contribution of these different types of firm to the economic growth of Italy.

Chapter 2: Big Business (1913–2001)

Renato Giannetti and Michelangelo Vasta

Subjects: economics and finance, economic psychology, industrial organisation

Extract

* Renato Giannetti and Michelangelo Vasta INTRODUCTION In economic history, the approach to big business was developed by Alfred Chandler (1962, 1977), who described the ‘strategy and structure’ of the American business system from the end of 19th century, while comparing big business – the top 200 firms – in the three main industrialised countries: the USA, the UK and Germany (Chandler 1990). According to Chandler, the rise of large manufacturing enterprises emerges from the cluster of innovations introduced during the Second Industrial Revolution, at the end of 19th century, in the fields of electricity, steel, chemicals, and later in the automobile industry.1 The size and organisation of the firms depend firstly on the characteristics of the technology which prevailed during a specific historical phase; the strategies of firms followed from their structure, according to their internal capabilities. The better adapted these capabilities were to exploit the new technology, the greater the resilience and the duration of the existing firms. The chance to remain in the leading position, thus creating long-term barriers to entry, depended on the firms’ R&D activities and on their specific organisational capabilities, which allowed the firms to grow through innovation, and later by diversification (Patel & Pavitt 1995). The aim of this chapter is to extend this research tradition by starting from the notion of ‘technological regimes’. This term describes the strong interrelations and interdependences among the innovations that clustered in a certain historical phase. These innovations were interconnected with regard to products and processes, in equipment and organisation,...

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