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There are already manifold interactions between business history and management studies but, to date, they have tended to be more particular and patchy than general and systematic. In this introduction we summarize the arguments that scholars from business history, management studies and social science have made for closer contact between these fields which emphasize the benefits to be gained both for theoretical and historical research on business. We highlight how the articles published in this Special Issue show the wide variety of intellectual purposes, approaches, and benefits that closer engagement between business history and management theories might entail. Yet, concerns have also been raised about the value of a closer alliance between business history and management studies and we suggest that they are worthy of further consideration and discussion. To that end, we propose a more deliberate conversation about what it is we do as historians and theorists of business and what we seek to accomplish. Such a discussion would help us not only to better understand the limits to fruitful integration but also how to work together more productively in the collaborations that seem most worthwhile.


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Business historians and management theorists have long influenced each other, but their interactions have been sporadic, indirect, and often implicit. With this Special Issue we hope to encourage both groups to reflect on the need and the possibilities for more direct and explicit engagement between their fields. Prominent scholars in business history, social science, and management studies have advocated a closer integration between history and theory in the study of business. Some of them have emphasized the merits of closer contact for the writing of business history while others have seen it as a route to a better conceptual understanding of business. The papers we publish here demonstrate both the variety of possibilities raised by closer, more explicit engagement betweenbusiness history and management theories, and the sheer diversity of fields and topics around which this engagement can take place.

In this issue alone authors explore social capital and the implications for economic empowerment in West and South Africa (Stephanie Decker), the role of agency in institutional change during Finland's Civil War (Juha Antti Lamberg and Kalle Pajunen), the possibilities for richer theory suggested by a detailed historical study of industry associations in New Zealand (James Reveley and Simon Ville), the renewed relevance of the ties between transaction cost economics and Alfred Chandler's work (Marcelo Bucheli, Joseph Mahoney and Paul Vaaler), and the value of Formula One racing as a setting for studying the historical interaction between technology and competition (Mark Jenkins). In all these cases, we can see both the tantalizing possibilities for management theory grounded more directly and firmly in historical context, and the limitations of history for management when it disregards theory.

Yet, we also highlight the significant differences that exist in how historians with a concern for business define themselves, and in how management theorists understand history and make use of historical data. These differences give rise to a variety of perspectives about the appropriate relationship between histories and theories of business and, indeed, for some scholars raise questions about the merits of a closer integration. While the general lack of consensus concerning history and theory is not unwelcome, we suggest that the diversity of views needs to be examined more critically. Historians and theorists of business often have strong opinions about what a ‘real’ business historian is or what a ‘proper’ theorist does, but these options remain implicit and wedded as much to scholarly prejudice as to fundamental distinctions that define historians and theorists. We suggest that both groups need to communicate more fully about their unique contribution to promote a better and more critical historical understanding of business and the management of enterprise. In particular we enter a plea for historical truth telling concerning the motivations, and the failures, that are frequently omitted from the historical record, as well as for management theory that acknowledges its origins in particular historical circumstances, and thus recognizes that theory as applied to social activities is rarely timeless, but time-sensitive and time-limited.


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Enthusiasts for greater interaction between business history and management studies can be found among the most distinguished scholars in business history. Alfred D. Chandler, Jr was an early and influential advocate of the importance and possibilities for business history of engagement with management and other social theory. In a discussion of the ‘historian's challenge’, he suggested that, for all historians, ‘[t]he first step must be detailed description of the actors and their actions; and for business history that means, of course, of businessmen and businesswomen and the enterprises they managed’ (Chandler, 1984, p. 3). However, he argued that the descriptive case studies that were the result of this effort required synthesis and analysis if they were to be used to construct meaning (Chandler, 1984, p. 7). To that end, he identified two important challenges to which business, and other, historians, should rise: ‘One is that of relating specific human events and actions to the ever-changing broader economic, social, political and cultural environment. A second is the development of generalizations and concepts which, although derived from events and actions that occur at a specific time and place, are applicable to other times and places, and are therefore valuable as guideposts for or as tools of analysis by other historians as well as economists, sociologists, anthropologists and other scholars (Chandler, 1984, p. 3).

Although taking on these challenges would involve the business historian in greater interactions with social scientists, Chandler hastened to add that business historians would not, in the process, turn into management theorists or social scientists. The methods of business historians who took up his challenges would still be the tried and true methods of the traditional historian: ‘Their data remain contemporary correspondence, reports, periodicals and statistical compilations available in public and private archives and libraries. They embark on their research by asking the historian's traditional questions of when, where, how and why the institution or phenomenon studied began and continued to develop’ (Chandler, 1984, p. 10). And, Chandler asserted, whatever business historians' theoretical aspirations, ‘traditional case studies must continue to provide the absolutely essential information on which any broad generalizations and concepts about the history of business and business institutions can be based’ (Chandler, 1984, p. 7).

Chandler achieved extraordinary success in working according to this method. In the process, he exerted an enormous influence on how business history was done, not only in the United States but in other countries too. His work reached beyond business history to influence other historians and the generalizations that he drew from his understanding of the history of business, especially in the United States, also attracted the attention of management scholars and social scientists. As William Hausman points out, based on an analysis of citations to Chandler's research, ‘[w]hat is truly impressive is the range of journals containing articles that cite Chandler's work’ (Hausman, 2003, pp. 95–6).

In his formative years in the late 1940s, Chandler believed that economics had little to offer in the way of theoretical inspiration. Instead he, like many other young historians at the time, turned to sociology for inspiration; the influence of Talcott Parsons on his analysis of big business is well known (Galambos, 2003; McCraw, 2008, p. 220).[1] Chandler returned the favour to sociology by stimulating important debates in the discipline, as well as new historical research on the rise of big business, much of it, ironically, critical of Chandler's work. Neil Fligstein's analysis of the historical development of corporate control in the United States and William Roy's book on the rise of big business in America are excellent examples, as is the more recent contribution of Robert Freeland on the history of ownership and control at General Motors (Fligstein, 1990; Freeland, 2001; Roy, 1997).

Although other business historians followed Chandler's lead in looking to sociology or, in some cases, political science for inspiration, Naomi Lamoreaux, Dan Raff, and Peter Temin have argued for a reconsideration of the value of economics for business history. They suggest that developments in mainstream economics, especially the increased effort to conceptualize the role of the firm based on the economics of information, provide new opportunities for business historians to engage with economics and the parts of management studies influenced by it. They accuse Chandler and others of Whiggishness, that is, of assuming that the, mostly successful, companies they tend to study ‘are the outcomes of historical processes that have produced higher forms of business organization’ (Lamoreaux et al., 2007, p. 38). More attention to economic theory, they argue, would serve two purposes in the betterment of research in business history. First, it would assist business historians in their continual struggle ‘to prevent the field from disintegrating into antiquarianism’ given their focus on ‘studies of individual entrepreneurs, firms, and industries’. Second, they argue that it would help business historians ‘sort out the causal elements of their stories’ (Lamoreaux et al., 2007, p. 55). For the purpose of improving causal analysis, they argue that contemporary economics provides ‘a broad arsenal of tools’ that can help to write business history ‘that focuses on alternatives and choices, acknowledging the significance of possibilities that never took lasting form’. These include ‘the evaluation of counterfactual hypotheses as used by neoclassically oriented New Economic Historians to the techniques of backward induction employed by game theorists’ (Lamoreaux et al., 2007, p. 55).

Alfred Chandler himself was eventually persuaded that he needed to reconsider his early attitudes about the appropriate relationship between economics and business history. The business historian acknowledged, for instance, that he learned much from Oliver Williamson, a central influence in the development of the ‘new’ economics that Lamoreaux, Raff and Temin emphasize. Nevertheless, Chandler drew a fundamental distinction between his own explanation of the ‘empirical regularities’ that he observed in his own historical research and transaction cost economics: ‘The basic difference between myself and Williamson is that for him: “The transaction is the basic unit of analysis.” For me, it is the firm and its specific physical and human assets. If the firm is the unit of analysis, instead of the transaction, then the specific nature of the firm's facilities and skills becomes the significant factor in determining what will be done in the firm and what by the market (Chandler, 1992, pp. 85–6).’ For this reason Chandler found more value in dynamic theories of the firm and other capabilities-based perspectives than he did in transaction cost economics.[2]

In this regard his views echo those of economists like William Lazonick who has long argued that theories that emphasize the inherently historical or evolutionary character of capitalism, such as those of Karl Marx and Joseph Schumpeter, are of greater value to business historians than those that emphasize the timeless laws of economic behaviour. Certainly contemporary economists inspired by Schumpeter have made important progress in developing his ideas to generate developmental or evolutionary theories of the firm that are particularly relevant for business historians. Besides William Lazonick's work on a ‘theory of innovative enterprise’, the evolutionary perspective on the firm articulated by Richard Nelson and Sidney Winter is notable in this regard. In his recent biographical work on Schumpeter, Thomas McCraw also emphasizes how closely related Schumpeter's concerns were, especially in Business Cycles, to those of business historians. According to McCraw, if Chandler is the parent of modern, rigorous business history, ‘Schumpeter is one of the godparents, and likely the most influential’ (McCraw, 2006, p. 260).

For some scholars, however, there is more heat than light in the debate about which variant of economic theory is most suitable for business historians. Of particular importance is what has come to be known as ‘the historical alternatives’ approach to business or industrial history. It was initially developed by Charles Sabel and Jonathan Zeitlin as well as Sabel and Michael Piore, and it was presented as an alternative to what were characterized as deterministic accounts not only in business, but also in economic and technological history. As Zeitlin notes, the historical analyses it inspired are characterized by their emphasis ‘on the salience of alternative possibilities, contingency, and strategic choice in the development of modern industry over the past three centuries’ (Zeitlin, 2007, p. 120).

As is evident even from this brief discussion, advocates of a closer interaction between the theory and history of business see its virtues for business history in somewhat different lights. Sometimes it is presented as a way to avoid certain shortcomings of existing research in business research. Antiquarianism was the dragon that Chandler wanted to slay when he embarked on his scholarly career, and British business historian, Leslie Hannah, echoed that concern, arguing that in Britain in the early 1980s ‘[m]ost business historians have clung to a tradition which, at its best, is a triumph of narrative skill, honest to the facts of the individual case, but at its worst is narrow, insular, and antiquarian’ (Hannah, 1983, p. 166). In recent years, by contrast, the primary value attached to using theory in business history is as an antidote to a creeping determinism in historical research on business, which Chandler's influence on the field of business history has been charged with encouraging.

A more general motivation for business historians to engage in generalizing about business is that if they fail to do so, then others will probe the historical record to reach their own conclusions. As prominent business historian, Lou Galambos, put it: ‘There is a deeply rooted need for literature that offers structure and meaning to the past. If historians no longer satisfy that need, social scientists will, and, in fact, they already are moving in that direction’ (Galambos, 1999, p. 196). To the extent that historians leave this work to others, they may not like the lessons that are learned from the past. Christopher McKenna emphasizes how the accumulation of half-truths can lead to greater and greater distortion of the historical record and its interpretation. In an essay on the Honda Motorcycle case, cited as a powerful example of innovation by generations of strategy instructors at business schools, he points to a trap that frequently ensnares unwary management scholars who rely on secondary historical interpretation, particularly in the form of case material. In the case of Honda an early report that emerged from a consulting engagement was reworked and elaborated upon by a succession of strategy theorists to the point that many partial truths, which McKenna calls ‘mementos’, combined to become a wholly inaccurate account (McKenna, 2009). The same cumulative process of distortion takes place, says Ronald Coase, when economic theory is based on historical examples that have been extracted from their context and repeated for decades until that context is all but forgotten. In a recent article on the practice of economics, Coase castigates economists for modifying his theory of industrial organization without checking the facts behind their favourite examples, especially when such facts would contradict their interpretation (Coase, 2006, pp. 255–7).

Many management scholars have already recognized what a rich laboratory history can be for the development of theory. Richard Whittington, a strategic management researcher, argues that, in engaging with management studies, the opportunity for the business historian goes well beyond a ‘mere under-labourer for social-scientific theorizers’. He even sees scope for business historians as generators of theory: ‘If new theory is typically generated by empirical anomaly, then immersion in the rich complexity of historical processes gives business historians a platform for theory-building altogether superior to the desiccated statistics of the econometricians. Instead of merely reporting that some proposed variable turns out to have less than expected statistical significance, business historians can delve immediately into the why’ (Whittington, 2008, p. 275).

In fact there has been growing attention to the general neglect of historical research in management studies and arguments for change among scholars whose primary interest is in advancing theoretical research on business enterprises. As Kipping and Üsdiken point out, business history had a significant influence on management studies early in its development but ‘it subsequently became confined to a few, rather marginal sub-fields, namely International Business and Management History, where business historians have been making and continue to make empirical and, albeit to a lesser extent, theoretical contributions’ (Kipping and Üsdiken, 2007, p. 112).

Early contemporary calls for a ‘historical turn’ came from organizational theorists. In an article in Organization Science in 1994, for example, Alfred Kieser lamented that, as the field of organization theory evolved, ‘interest in the history of organizations vanished and, nowadays, excursions of organization researchers into history have become extremely rare’ (Kieser, 1994, p. 609). Ten years later, the co-editors of a Special Issue of Business History on ‘History in Organisation Studies’ noted ‘recent signs in the literature of a growing appreciation of historical analysis and/or an historical perspective in organizational analysis’. They observed that the reasons for a historical turn had to do, at least in part, with ‘some of the newer and influential research programmes within organisation theory’ such as neo-institutionalism and population ecology (Üsdiken and Kieser, 2004, p. 321). Some of the articles in that Special Issue showed how historical research could be used to provide insights for the study of organizations, including the evolution of Major League Baseball in the United States and high-quality restaurants in France. Others were preoccupied with more abstract concerns, including the various possibilities for historical research and their suitability for addressing particular questions about organizations.

Research on strategy, another major sub-field of management studies, was shaped in its early years by Alfred Chandler's first major work Strategy and Structure: Chapters in the History of the American Industrial Enterprise, which was published in 1962. That early influence did not, however, ensure that the relevance of historical research for the field would endure. Only a few strategy process researchers, like Andrew Pettigrew, explicitly advocated the importance of historical research in their work (Pettigrew, 1997). But more recently there have been signs of a renewed interest in historical research for informing the study of topics that are considered important to strategy research such as the dynamics of firms and industries. Writing in the introduction to a Special Issue of the Strategic Management Journal on ‘The Evolution of Firm Capabilities’, for example, Constance Helfat made the case for a greater attention to historical research. She pointed out that ‘[w]e still . . . know relatively little about how it is that, over time, some firms manage to become successful using their capabilities, while other firms do not. By delving into the historical reasons for firm success and failure, we may learn more about the relationship between capabilities and competitive advantage’ (Helfat, 2000). That Special Issue included a number of articles that employed historical research to do just that, including Daniel Raff's article on the evolution of firm capabilities in the American book trade, a contribution by Steven Klepper and Kenneth Simons on entry and its impact on the US television receiver industry, and a study by Mary Tripsas and Giovanni Gavetti on Polaroid's experience in the development of digital imaging. Further efforts in the same direction can be found in inter-disciplinary journals such as Industrial and Corporate Change, as well as in book-length analyses of the histories of particular companies and industries over long periods of time and across countries (Graham, 1986; Graham and Shuldiner, 2001).

In other subfields of management studies, besides organization studies and strategy, we also find advocates of a greater reliance on historical research in theoretical development. In ‘Bringing history (back) into international business’, Geoffrey Jones and Tarun Khanna point out that the research of early scholars of international business also had an important historical dimension but that it faded over time. Today, they claim, ‘systematic investigation of historical evidence has disappeared from the research agenda of most IB [international business] scholars’. Although many international business scholars are aware that history is somehow important to the phenomena they study, they no longer incorporate historical analysis in their own research. Jones and Khanna challenge the field ‘to evolve its rhetoric from the relatively uncontroversial idea that “history matters” to exploring how it matters’ (Jones and Khanna, 2006, p. 453).

Business historian JoAnne Yates has contributed much to the scholarly work on Information Technology through her historical research on information control and standard setting, as well as through her co-authored works with Wanda Orlikowsky. Most recently she has engaged with the theories of social constructivism and user need to show that for computer systems in the insurance industry, social construction of technology was not just about product development by computer companies, nor about individual users, but an ongoing process of ‘development in use’ by different insurance companies at the enterprise level, each of which had their own routines and their own particular business models (Yates, 2005).

When we move beyond management studies, as narrowly defined, to include a broader range of research across disciplines on businesses and the institutions that shape their practices and behaviour, we find a wide variety of scholars who are committed to the importance of historical research for informing theoretical development. The study of technology is an exemplar in this regard, with the rich possibilities of exchange between theory and history finding articulate expression in the Society for the History of Technology and its journal, Technology and Culture. Sociologist Steve Barley has called attention to the value for the field of Management of Technology of paying attention to the history of technology. In ‘What can we learn from the History of Technology?’ he offers three strategies for ‘complicating the simple’ to divert students of technological innovation from an all-too-prevalent reliance on linear thinking, and simplistic assumptions about causality (1998, pp. 238–9). The substantial bodies of research on corporate governance and business systems also merit attention for their reliance on history for informing theory (see, for example, O'Sullivan, 2000; Whitley, 1999).

Within the broader disciplines of political science, sociology, and economics, we find scholars who are strongly committed to the importance of historical research for developing the theories about the emergence and evolution of capitalism. Of particular interest is the recent emergence of the field of socioeconomics which builds on various strands of thinking, especially in economic sociology and political economy. As Jens Beckert notes, ‘[e]xplanations of economic outcomes in socioeconomics take as their point of departure the contextualization of economic action in specific settings’ (Beckert, 2008, p. 515). As a result, socioeconomics has a natural orientation to historical research and, as a perusal of its leading journal, Socio-Economic Review, shows, some of that research engages issues that are close to more than one of the beating hearts of business history.

As with those who advocate the merits of greater integration between theory and history in the service of better business history, we also see variety in the arguments that scholars have made about the value of historical research for informing the theoretical study of management and business. Perhaps the most minimal benefit of historical research, as Jones and Khanna point out, is that it adds historical variation on the relationship between causes and outcomes to the cross-sectional variation that is more widely used in management studies. In an interesting twist, they also claim that the similarity that historical research throws up can also serve a valuable purpose for management research in raising challenges to the ‘presentism’ that often pervades contemporary explanations. Kieser makes a similar point when he notes that ‘[b]y confronting current fashionable trends in organization theory and practice with similar developments in the past, we can identify and possibly overcome prejudices in their presentation’ (Kieser, 1994, p. 610).

Jones and Khanna also see another, more distinctive advantage of historical research for the study of phenomena in which relationships between causes and outcomes emerge over long periods of time. Kieser too notes that by confronting theories of organizational change with historical developments, these theories can be subjected to a more radical test than they have to pass when merely confronted with data on short-run changes. Political scientist, Paul Pierson, has delineated the types of causal processes in which the relationship between cause and effect becomes apparent only over a long period of time. He talks about ‘slow-moving’ processes, noting that they may be ‘cumulative, involve threshold effects, or require the unfolding of extended causal chains’. He also emphasizes that, in some causal processes, there may be a separation in time between the onset of a cause and the development in the main effect. In particular, he suggests, this ‘temporal separation’ is evident in structural and path-dependent processes (Pierson, 2000, 2004). Jones and Khanna also argue for the value of historical research in ‘illuminating’ path dependence such as the development of ‘Penrosian’ resources by firms. The reference is, of course, to Edith Penrose's book on The Theory of the Growth of the Firm which is now widely cited as the original source of the resource-based theory of the firm (Penrose, 1959; Rugman and Verbeke, 2002).

Related to the value of historical research for understanding path dependency, some scholars have advocated its more general usefulness for analysing the role of contingency in causal processes. Perhaps the most radical idea about the value of historical research for the study of business, since it diverges farthest from extant research in management studies and the social sciences, is one which emphasizes another ‘c’ which is central to the historian's craft: context. Political scientist, William Sewell, is one of the most articulate exponents of the importance of historical contextualization for theorizing in the social sciences. He points out that ‘[h]istorians see the flow of social life as being punctuated by significant happenings, by complexes of social action that somehow change the course of history. They constantly talk about “turning points” or “watersheds” in history and spend much of their conceptual energy dividing the flow of history into distinct eras that events mark off from one another.’ Sewell has argued that if one takes seriously what historians do, then it implies that ‘time is heterogeneous, that different historical eras have different forms of life and different social dynamics’. He asserts further that temporal heterogeneity, of necessity, means that ‘understanding or explaining social practices requires historical contextualization’ (Sewell, 2008, p. 518).

It is the importance of historical context for shaping the development of business and capitalism that Thomas McCraw argued was the primary lesson that Schumpeter learned from his serious and sustained commitment to engaging history. Writing Business Cycles, McCraw argues, ‘changed Schumpeter's views by forcing him to confront the minute details of the history of capitalism . . . during the seven years he worked on Business Cycles, he came to realize that he could not understand the core nature of capitalism without delving into the histories of individual industries, firms, and entrepreneurs’ (McCraw, 2006, p. 260). As Schumpeter's work suggests, and Sewell himself argues in his recent work, the challenge for the theorist is not just to bring context to bear in her study of business. In the realm of capitalism, temporality coexists with recurring patterns or themes. Certain phenomena like business cycles and speculative bubbles repeat themselves in capitalism despite massive efforts to learn from the past (Sewell, 2008). The theorist with ambitions to bring history to bear on the present therefore needs to integrate the specific and the general in the study of business and capitalism.


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The articles in this Special Issue provide rich hints of the multiplicity of ways in which business history and theories of business, in management studies and beyond, might interact with each other to mutual benefit. Not surprisingly, given the variety of perspectives we have described above, the contributing authors conceive of the possibilities for, and benefits of, interaction between business history and management studies in different ways. Some of our authors start with existing management theories and apply, critique, and augment these theories using business history. Others identify gaps in theoretical inquiry and suggest that ideas for new theory can be generated through the exploration of business history. And, finally, some of our authors move in the opposite direction, claiming that management and other social theories can provide important guidance in suggesting questions we might address in historical research and in drawing general implications from it. The diversity that we find in these five articles, therefore, can be seen as a microcosm of the larger debate on the possible relationships between business history and management studies.

In ‘Postcolonial Transitions in Africa: Decolonization in West Africa and Present Day South Africa’, Stephanie Decker employs a case study of British firms during decolonization in Ghana and Nigeria in the 1950s and 1960s to draw broader implications for our understanding of several themes central to the development of social capital, including empowerment and diversity (Decker, 2010). She highlights the important complexities in economic development associated with empowering majorities of the population, as was the case in West Africa, noting its potential to induce greater inequality within the empowered group. Decker emphasizes the importance of recognizing and dealing with this problem in contemporary instances of social and economic development, especially the case of South Africa. She also points to its implications for social network theory, where work on empowerment is currently based largely on the quite different experiences of Western countries with empowering minority populations. In Decker's article, both temporal and cultural context come into play, and even the shared continent must not be allowed to mask the importance of distinguishing between very different times and conditions.

Juha-Antti Lamberg and Kalle Pajunen, in ‘Agency, Institutional Change, and Continuity: The Case of the Finnish Civil War’, study the experience of Finland's paper industry during the country's civil war to investigate the role of agency in institutional change (Lamberg and Pajunen, 2010). They focus on two prominent business leaders in that industry to understand their behaviour during this critical juncture in the formation of the institutions that support Finland's contemporary system of capitalism. Their case suggests that individual agency can play a crucial role in mediating and shaping institutional change, at the same time that it also tells us something about its character. Their research highlights the extremely short timeframes within which crucial actors operated and the consequent importance of improvisation as a basis for their actions. They also point out that their motivations and roles were several, as they acted ‘as patriots, self-interested businessmen and institutional entrepreneurs’. For economists, of course, agency theory is largely concerned with the dilutive and distorting effect agents can have when carrying out the purposes of the principals. For historians, in contrast, as in this case of Finland's Civil War, specific actors can contribute positively as patriots and institution-builders, even as they represent their own and their companies' interests.

In ‘Enhancing Industry Association Theory: A Comparative Business History Contribution’, James Reveley and Simon Ville analyse the historical structure and activities of two industry associations in New Zealand's wool supply chain (Reveley and Ville, 2010). They draw on different theoretical approaches to understand the associational strength of these organizations as well as the role they played in the development of their industries. They also go beyond the application of theory to show how counterfactual analysis of historical evidence can be used to suggest new theoretical directions in the study of industry associations.

In ‘Chandler's Living History: The Visible Hand of Vertical Integration in 19th Century America Viewed Under a 21st Century Transaction Costs Economics Lens’, Marcelo Bucheli, Joseph Mahoney and Paul Vaaler make a case for the value of integrating business history and economic and managerial theory (Bucheli et al., 2010). For history, they focus, as Chandler did in The Visible Hand, on the emergence of vertically-integrated firms in the United States in the late nineteenth and early twentieth centuries. For theory, they argue that the transition to vertical integration in the leading cases that Chandler described can be understood as managerial responses to classic transaction costs considerations. Moreover, from this perspective, they claim, we can also understand why vertical integration proved unsuccessful in cases where such considerations did not obtain. Echoing Sewell's contention that certain patterns can be expected to repeat themselves in economic life, they argue that thinking in this way helps us not only to better understand the past but also to shed light on the future by suggesting when and where strategies of vertical integration might work in emerging industries.

In ‘Technological Discontinuities and Competitive Advantage: A Historical Perspective on Formula 1 Motor Racing, 1950–2006’, Mark Jenkins considers the interaction between technological discontinuities and competitive performance in the history of Formula 1 Motor Racing (Jenkins, 2010). Although his study supports the established view that incumbent firms have difficulty in adapting to such discontinuities, he also shows that, given time and an abundance of resources, a small number of firms were able to maintain their competitive advantage across even daunting technical divides. Drawing on the historical experience of these particular firms, he argues that we can see the possibility of ‘sustaining capabilities’ when ‘munificent resource configurations’ can extend the time available to adapt to technological change.


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The examples of closer integration between histories and theories of business that the articles in this Special Issue furnish should inspire other scholars to similar efforts. Nevertheless, it is worth reflecting on barriers to a closer integration that may be difficult, and perhaps unwise, to overcome without more systematic efforts to understand and engage them. Of particular importance are differences among scholars in the meaning that they attach to ‘history’ and ‘theory’ and, as a result, to their understanding of the day-to-day practices, and intellectual purposes, of historians and theorists.

We see these differences even among scholars who agree on the merits of closer integration between historians and theorists. The theory that Chandler envisaged, with historians building generalizations from their own historical research, is a world apart from what Lamoreaux, Raff, and Temin imagine in exhorting business historians ‘to make the effort to pose and test refutable hypotheses, not as an end in itself but as a way of enhancing the rigor of their writing and of avoiding the temptations of determinism’ (Lamoreaux et al., 2007, p. 57). Similarly, when advocates of more historical research in management studies speak of ‘history’ they often mean different things. History for some simply implies the passage of time, whereas for others the past is another country. These distinctions are of crucial importance because they make all the difference to the possibilities for interaction between history and theory.[3]

We find even greater variety in perspectives when we expand our scope to consider what sceptics of greater engagement between the history and theory of business have had to say. From the perspective of business history, Terry Gourvish, a leading British business historian, calls for caution in ‘the search for a new theory of business history’ and a continued appreciation of the importance for business history of the case study (Gourvish, 1995). Gourvish is by no means hostile to the idea that business historians can learn from business school economists and the social sciences. He notes that ‘the work of social scientists must be of value and its methodology must interest the business historian, and, indeed, other historians’. However, he questions ‘the notion that business history, like other forms of history, should turn to the social sciences for theoretical inspiration and guidance’ (Gourvish, 1995, p. 7). Historians, he asserts, ‘are very different creatures from social scientists’. Gourvish draws a number of distinctions in terms of the sources that historians and social scientists use, the way they synthesize them, and the objectives of their inquiry, and concludes that ‘the relationship between history and the social sciences must necessarily be an uneasy one’ (Gourvish, 1995, p. 8). The implication that he draws from this observation is that business historians must not allow enthusiasm for the application and pursuit of theory to let them lose sight of what it is that makes them distinctive as scholars. In particular, Gourvish is emphatic that business historians should not abandon the case study.

Concerns about the potential pitfalls of a greater engagement by business historians with management scholars and social science theorists are often expressed at professional meetings and alluded to in introductions to special issues and edited volumes. For example, in summarizing William Lazonick's contribution to their recent Business History Around the World, Franco Amatori and Geoffrey Jones, both of them historians but neither of them slouches when it comes to drawing generalizations, observe that ‘[m]any scholars whose primary allegiance lies with history would dispute Lazonick's assertion that “business history needs a theory of innovative enterprise” and might be critical of an essay that talks very little about actual firms.’ They identify what they see as ‘an enormous methodological distinction’ between Chandler and Lazonick: ‘[w]hile Chandler has sought to generalize from rich empirical evidence, Lazonick's work provides a theory in search of evidence’ (Amatori and Jones, 2003, p. 4). In a similar vein, they question the validity for business historians of Zeitlin's ‘heavily theoretical’ essay in the same book by suggesting that ‘it is noteworthy that he refers to “industrial history” rather than “business history” ’ (Amatori and Jones, 2003, p. 5).

If it is reasonable to ask if something might be lost by historians in getting closer to management scholars and social scientists, questions can also be raised about the real value of greater engagement. If we look at challenges to the Chandlerian consensus in business history, for example, we find that some of the most powerful of them have come not from theorists and their counterfactual reasoning but from historians themselves. As Galambos points out: ‘[a]n energetic and productive subset of the historians of technology has in recent years stimulated considerable analytical debate about business history’ (Galambos, 2003). Similarly, historical research on the economic importance of small and medium enterprises by scholars like Philip Scranton, as well as contributions by historians like Mary Rose and Andrea Colli on the history of family business, is a crucial foundation for theoretical alternatives to the Chandlerian view of the world.

Scepticism of the benefits of greater interaction between business history and management studies might also stem from questions about the value of historical research for informing theoretical inquiry. To date, it seems, historical research has not been sufficiently influential in management studies to draw serious fire. However, in sociology, where historical research plays an influential role through ‘historical sociology’, sceptics of the benefits of historical research for the discipline have been bolder in expressing their concerns. In doing so, they raise issues that may help us to understand why management scholars, even if they have not articulated specific objections, may be reluctant to employ historical research in their work.

John Goldthorpe (1991) laid out one of the boldest, and certainly one of the most controversial, statements about ‘The Uses of History in Sociology’. Like Gourvish, he emphasized important distinctions between historians and social scientists, especially with regard to ‘the nature of the evidence that the two disciplines use or, more precisely, the way in which this evidence comes into being’ (p. 211). Historians, he argues, are concerned with making inferences from ‘relics’, which include artefacts and buildings but also, and most importantly, documents of all kinds. Although new relics may be discovered from time to time, he argues that historians are stuck with the fact that relics are finite and incomplete in ways that are not of their choosing. In contrast, sociologists, as well as management scholars and other social scientists, can generate their own evidence and substantially shape its characteristics. Goldthorpe argues that there are very real advantages to be gained ‘where the nature and extent of available evidence is not restricted by the mere accidents of physical survival; where, moreover, the collection of evidence can be “designed” so as to meet the specific requirements of the inquiry in hand; and where questions of the quality of evidence can always be addressed, as they arise, by generating yet further evidence through which to check and test the original’ (pp. 214–5). As a result, he suggests that sociologists, far from seeing historical research as their salvation, should pay greater attention to its shortcomings relative to alternative types of empirical evidence.

Moreover, to the extent that sociologists rely on historical research, Goldthorpe suggests that they need to recognize and confront the limitations inherent in its use. He emphasizes the necessary role for interpretation in the construction of historical accounts and argues that this quality of historical research poses an enormous problem for social scientists who seek to rely on it. In particular, given that many historical sociologists rely on secondary sources, rather than their own primary historical research, Goldthorpe, like historian McKenna, fears that they are ‘engaging in interpretation of interpretations of, perhaps, interpretations’ (Goldthorpe, 1991, p. 223) without any legitimate basis on which to choose among alternative accounts. His point is not that history is somehow inferior to the social sciences but that history is difficult in ways that social scientists do not always appreciate.

Yet, the responses that Goldthorpe's remarks provoked emphasize the substantial differences among scholars in how they conceive of the intellectual enterprise in which sociologists, management scholars, and other social scientists are engaged. As historical sociologist Craig Calhoun pointed out, there are competing ideas about what explanation means. Of particular importance is the distinction between explaining something ‘solely in terms of external antecedent causal conditions’ and supplementing such explanations with ‘inquiry into motives and purposes and the pursuit of empathic understanding’ (Calhoun, 1998, p. 852). Goldthorpe seems much more concerned with the former type of explanation, whereas Calhoun emphasizes the importance of explaining something ‘by saying what it means or how it works, not just what caused it’. As he observes, this latter approach to explanation is much more open to, and reliant on, historical research ‘because considerable effort may be required to grasp the meanings that objects, phenomena, ideas, and other people have for actors in very different cultural and social settings’.

We could say much more about specific views of what history and theory are when it comes to the study of business, but our primary point here is that a great diversity of perspectives exists. Where some see real business history, others see antiquarianism and insularity. Enthusiasts of a greater role for theory in history portray the social sciences as a haven for counterfactual reasoning that can help us guard against an inherent tendency to determinism in our interpretation of business history. To others the pursuit of ‘a neo-positivist social science methodology’ in management studies has consigned the insights of ‘more narrative case studies – typically of (business) historical research – to the margins’ (Kipping and Üsdiken, 2007, p. 113). In Barley's terms, a much-needed value of history for management scholars may indeed be to ‘complexify the simple’ (Barley, 1998, p. 237).

The diversity of views about what we do as historians or as theorists of business is hardly in itself a problem. However, what is more troubling today is the lack of conversation about legitimate interpretations of what history and theory is, and ought to be, in the study of business. Without such conversation, there is a risk that the opinions we hold about what theory and history might be reflect only a nostalgic favouritism for the disciplines and methodologies on which we have established our reputations. Legitimate differences in the ways historians and theorists conduct their work should be able to bear the critical scrutiny that a broader conversation about them would entail. Without such scrutiny, individuals may learn to cross the lines when they feel so inclined, but a more fruitful and systematic integration of history and theory is unlikely to occur.

In ordinary times neither historians nor management theorists are especially prone to self-reflection. When they write about historiography, historians often write histories of historiography! Nevertheless, lately several important books such as Telling the Truth About History by Joyce Appleby, Lynn Hunt, and Margaret Jacob (1994), and The Landscape of History: How Historians Map the Past by John Lewis Gaddis (2002), have refreshed and challenged our thinking about history and its methods. These works demonstrate that when historians turn their attention to the critical task of describing their own work process, they can be both enlightening and provocative. To date, management scholars have only made limited efforts to articulate and explain what it is they do and aspire to achieve in their research, often free riding on discussions of methodology from economics or other social sciences. Yet, their particular interest in firms is distinctive and the job of explaining and justifying how they go about it is poorly done when merely derivative.

What makes this need for self-reflection urgent is that these are not ordinary times in business, nor should they be for the study of management. Indeed, as the whole economic system comes under well deserved if belated scrutiny, this strikes us as an especially appropriate moment for a critical discussion of not only the practices but also the aspirations of historians and theorists of business. As Patrick Fridenson asked not long ago in his presidential address to the Business History Conference, why is it that the mistakes and failures of businesses and managers are so seldom included in the historical record? Why are fundamental assumptions so rarely examined? How is it that management theories can be treated as timeless laws of business behaviour in one era, only to be exposed as fads and fashions in the next? Why does the exposure of the lack of grounding for our most basic assumptions, hinted at by the examples that Coase and McKenna adduce, not galvanize us into action? Questions of this nature ought to have a particular resonance in times of economic and financial crisis such as ours, and answers to them could turn out to be more than ‘academic’ in their urgency and significance.

  • [1] 

    For a more general discussion of the value of Parsons' analysis for business historians, see Galambos (1969).

  • [2] 

    Oddly this preference did not extend to embracing the work of economist Edith Penrose, whose resource-based view and relational emphasis were explicitly drawn from her initial work on the Hercules Powder Company.

  • [3] 

    Marie-Laure Djelic brings life to this point in an article on sociological studies of diffusion. She argues that we can distinguish between different types of theories that might explain ‘increasing similarity of forms and ideas’. While history always seems relevant for these theories, the way in which history is understood and invoked plays out differently across different types of theory (Djelic, 2008).


  1. Top of page
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