The Postwar Corporation, 1950-1970
by Alexa Dvorak
Postwar America was the dominant capitalist market in the world. Many new exciting changes were taking place in the world of business after World War II. It was a period of change and rapid expansion in America and corporations were taking full advantage of the increasing economic growth. Corporations were recreating the organizational structure as upper management became the primary decision makers, but profit was not their main goal, they were looking to maximize their companies in many areas, change locations, develop specialized departments and employ sharp new university graduates to manage their enterprises. The configuration of the new suburban corporate campus was specifically designed for expansion and growth, which was the main goal of businesses in the postwar era. [1]
Managerial Capitalism
Capitalism is a very dynamic system with the ability to change and adapt as the economy does. Although it started slowly during the war, it was primarily after World War II a new type of Capitalism impacted the corporate world in the United States, particularly very large companies. Corporations began issuing stock to the public, creating issues when it came down to ownership and control as separate entities as the shareholders wanted a say in the corporate decision making. Technically, whoever held the majority of stock in the company could maintain control, but as the corporations grew and shares continued to sell it became increasingly difficult to work with the increasingly large amount of shareholders. When the technostructure of the corporation, such as administrators, managers, and other people employed in positions of high leadership have more influence, in how the company is developed than the shareholders do, as they are running the day to day operations, is referred to as Managerial Capitalism. The managers of the company are the ones primarily responsible for the direction of change and economic growth. This is a major change in the 1950s from the traditional capitalism management structure as it does not involve the actual owners of the business. In charge of these vast corporate campuses was a hierarchy of salaried management. Administrative personnel took control over the market economy in America during this period of rapid growth in the 1950’s, reaching new levels in the private equity business world. Managers were able to use more internally generated funds due to the increase in market share, making the corporations much less dependent on financial institutions than in the past. Corporations became more resistant to stockholders and bankers as well. During this time, many elite businessmen rose to the top of the corporate ladder. Many referred to this structure as the “Pyramid Management” with fewer more important jobs were at the top and the more common less vital was at the base. This form of capitalism was often credited to executive Alfred Sloan of General Motors. This structure was new and modern, drawing attention and interest in the corporate campuses from young college graduates who found appeal in the similarity of the corporate campus to their universities. The Pyramid Structure structure did put few elite positions at the top, giving them control over increasingly large companies and great impact on the economy. Because of this, there was also a lot of controversy from economists who feared the destruction of the free market as well as the political system which was being heavily influenced. The new corporate managerial structure was transparent to all, everyone could clearly see who was responsible for each specific duty and knew how much authority they held. Managerial Capitalism thrived on stability and was not about to take any risk that could potentially damage the expansion of the corporation. Management was continuously working and growth became steady and predictable. Production and distribution were also maximized under this system. The goal of this structure was long term; corporations not only wanted to increase profits but wanted to continue growing and expanding as much as they possibly could over time. Management would remain the primary decision maker for the enterprises until the early 1980’s when shareholders were influenced by neoliberal economic theories to take more responsibility in their companies and maximize stock value. [2][3]
Postwar America was the dominant capitalist market in the world. Many new exciting changes were taking place in the world of business after World War II. It was a period of change and rapid expansion in America and corporations were taking full advantage of the increasing economic growth. Corporations were recreating the organizational structure as upper management became the primary decision makers, but profit was not their main goal, they were looking to maximize their companies in many areas, change locations, develop specialized departments and employ sharp new university graduates to manage their enterprises. The configuration of the new suburban corporate campus was specifically designed for expansion and growth, which was the main goal of businesses in the postwar era. [1]
Managerial Capitalism
Capitalism is a very dynamic system with the ability to change and adapt as the economy does. Although it started slowly during the war, it was primarily after World War II a new type of Capitalism impacted the corporate world in the United States, particularly very large companies. Corporations began issuing stock to the public, creating issues when it came down to ownership and control as separate entities as the shareholders wanted a say in the corporate decision making. Technically, whoever held the majority of stock in the company could maintain control, but as the corporations grew and shares continued to sell it became increasingly difficult to work with the increasingly large amount of shareholders. When the technostructure of the corporation, such as administrators, managers, and other people employed in positions of high leadership have more influence, in how the company is developed than the shareholders do, as they are running the day to day operations, is referred to as Managerial Capitalism. The managers of the company are the ones primarily responsible for the direction of change and economic growth. This is a major change in the 1950s from the traditional capitalism management structure as it does not involve the actual owners of the business. In charge of these vast corporate campuses was a hierarchy of salaried management. Administrative personnel took control over the market economy in America during this period of rapid growth in the 1950’s, reaching new levels in the private equity business world. Managers were able to use more internally generated funds due to the increase in market share, making the corporations much less dependent on financial institutions than in the past. Corporations became more resistant to stockholders and bankers as well. During this time, many elite businessmen rose to the top of the corporate ladder. Many referred to this structure as the “Pyramid Management” with fewer more important jobs were at the top and the more common less vital was at the base. This form of capitalism was often credited to executive Alfred Sloan of General Motors. This structure was new and modern, drawing attention and interest in the corporate campuses from young college graduates who found appeal in the similarity of the corporate campus to their universities. The Pyramid Structure structure did put few elite positions at the top, giving them control over increasingly large companies and great impact on the economy. Because of this, there was also a lot of controversy from economists who feared the destruction of the free market as well as the political system which was being heavily influenced. The new corporate managerial structure was transparent to all, everyone could clearly see who was responsible for each specific duty and knew how much authority they held. Managerial Capitalism thrived on stability and was not about to take any risk that could potentially damage the expansion of the corporation. Management was continuously working and growth became steady and predictable. Production and distribution were also maximized under this system. The goal of this structure was long term; corporations not only wanted to increase profits but wanted to continue growing and expanding as much as they possibly could over time. Management would remain the primary decision maker for the enterprises until the early 1980’s when shareholders were influenced by neoliberal economic theories to take more responsibility in their companies and maximize stock value. [2][3]
Specialized Departments
Before World War II, most companies only produced one product, and that one particular item is what everyone in the company focused on. Major industries during the postwar era that continued to advance ranged from agricultural, automobile production, defense technology, processed foods, and insurance. Employees used to work directly with the owner of the business in a very small and personal work environment. Post World War II, companies began expanding rapidly and larger amounts of products and services were needed by each company. The corporate campus provided the space and arrangement of space that was needed to carry out the required tasks by employees. Management expanded, and began separating employees and assigning them to perform different functions which eventually led to specialized departments. In the corporate campus setting there were often separate buildings or separate wings in one building for each department. This made it easier to focus on one part of the job and excel at it without any distractions from others. Splitting employees up based by their profession also made the company more efficient. Management believed that this structure would increase the quality and productivity of the business. They encouraged these divided groups of people to spend as much time as possible together discussing new ideas. The departments often times had cafeterias inside of them so employees did not even have to leave, but could instead sit and talk among themselves sharing inspiration and ideas. [4][5]
Employee Qualifications, Education and Hierarchy
Administrative hierarchy had become quite clear structurally in the postwar corporation. Although it had existed previously, managerial capitalism made it much more distinct. The labor market was increasingly competitive. Corporations sought out the most qualified employees that would benefit in the expansion. Not long before this time a new academic credential became available, the Masters Degree of Business Administration. Frank Baldwin Jewett, who held a doctorate degree, was one of the first scientists of AT&T Bell Laboratories. His high level of education, like many others with post graduate degrees became very valuable to the expanding corporations. The corporate campus had a close resemblance to the traditional American style university and was thought to be a smooth transition for new graduates who were just beginning their careers. Professionalism was increasingly important as companies were expanding nationally and even internationally. Management now consisted of salaried workers that were divided into three groups responsible for specifically distributed tasks. Lower management, defined as the operating unit, were responsible for office jobs such as regional sales, and factory work. Middle management, who mainly worked in divisional offices, consisted of finance, production, purchasing, research and development, and traffic departments. These were the departments immediately responsible for the daily functions of the corporation. Upper management positions were in corporate offices, usually in the headquarters. These elite positions were held in departments such as legal, public relations, real estate, personnel and engineering. The few people above them consisted of the Board of Trustee’s the Chief Executive Officer and the Executive Committee. Corporate management was responsible for coordinating major large scale contracts, which made the business much more cost effective. The design of the new corporate headquarters reflected the hierarchy as well; those who held positions of higher status often had their own offices with large windows overlooking the campus. Management was considered essential to corporate success. [6][7]
Before World War II, most companies only produced one product, and that one particular item is what everyone in the company focused on. Major industries during the postwar era that continued to advance ranged from agricultural, automobile production, defense technology, processed foods, and insurance. Employees used to work directly with the owner of the business in a very small and personal work environment. Post World War II, companies began expanding rapidly and larger amounts of products and services were needed by each company. The corporate campus provided the space and arrangement of space that was needed to carry out the required tasks by employees. Management expanded, and began separating employees and assigning them to perform different functions which eventually led to specialized departments. In the corporate campus setting there were often separate buildings or separate wings in one building for each department. This made it easier to focus on one part of the job and excel at it without any distractions from others. Splitting employees up based by their profession also made the company more efficient. Management believed that this structure would increase the quality and productivity of the business. They encouraged these divided groups of people to spend as much time as possible together discussing new ideas. The departments often times had cafeterias inside of them so employees did not even have to leave, but could instead sit and talk among themselves sharing inspiration and ideas. [4][5]
Employee Qualifications, Education and Hierarchy
Administrative hierarchy had become quite clear structurally in the postwar corporation. Although it had existed previously, managerial capitalism made it much more distinct. The labor market was increasingly competitive. Corporations sought out the most qualified employees that would benefit in the expansion. Not long before this time a new academic credential became available, the Masters Degree of Business Administration. Frank Baldwin Jewett, who held a doctorate degree, was one of the first scientists of AT&T Bell Laboratories. His high level of education, like many others with post graduate degrees became very valuable to the expanding corporations. The corporate campus had a close resemblance to the traditional American style university and was thought to be a smooth transition for new graduates who were just beginning their careers. Professionalism was increasingly important as companies were expanding nationally and even internationally. Management now consisted of salaried workers that were divided into three groups responsible for specifically distributed tasks. Lower management, defined as the operating unit, were responsible for office jobs such as regional sales, and factory work. Middle management, who mainly worked in divisional offices, consisted of finance, production, purchasing, research and development, and traffic departments. These were the departments immediately responsible for the daily functions of the corporation. Upper management positions were in corporate offices, usually in the headquarters. These elite positions were held in departments such as legal, public relations, real estate, personnel and engineering. The few people above them consisted of the Board of Trustee’s the Chief Executive Officer and the Executive Committee. Corporate management was responsible for coordinating major large scale contracts, which made the business much more cost effective. The design of the new corporate headquarters reflected the hierarchy as well; those who held positions of higher status often had their own offices with large windows overlooking the campus. Management was considered essential to corporate success. [6][7]
Location
After World War II, the urban core of the city was no longer the central business district. The decentralization of cities made the postwar corporation a new suburban concentration of commerce and production. The configuration of the new suburban corporate campus was specifically designed for expansion and growth, which was the main goal of businesses in the postwar era. The ideal location for corporations was now off of the main highways leading out of the city, which changed the way employees commuted to work. This drastic change in location redefined the corporation in the mid-century giving it a new friendlier image. No longer were they in large, crowded, busy skyscrapers but in peaceful suburban areas. Escaping the loud, expensive, unorganized city buildings let corporations advance in many way. Production, distribution, efficiency and organization all increased after the move to the suburbs which positively stimulated the postwar economy. “These landscape types became embedded in the expectations of the corporate class and could at a glance embody both the reality and prospect of capitalist power.” [8][9][10]
Notes:
[1] Alan H. Hansen, Economic Issues of the 1960’s
[2] Alfred D. Chandler, The Emergence of Managerial Capitalism
[3] Burch, The Managerial Revolution Reassessed
[4] Barber, The American Corporation
[5] Mozingo, Pastoral Capitalism
[6] Heenan, The New Corporate Frontier: The Big Move to Small Town U.S.A.
[7] Mozingo, Pastoral Capitalism
[8] Chandler, Scale and Scope: The Dynamics of Industrial Capitalism
[9] Barber, The American Corporation
[10] Mozingo, Pastoral Capitalism
After World War II, the urban core of the city was no longer the central business district. The decentralization of cities made the postwar corporation a new suburban concentration of commerce and production. The configuration of the new suburban corporate campus was specifically designed for expansion and growth, which was the main goal of businesses in the postwar era. The ideal location for corporations was now off of the main highways leading out of the city, which changed the way employees commuted to work. This drastic change in location redefined the corporation in the mid-century giving it a new friendlier image. No longer were they in large, crowded, busy skyscrapers but in peaceful suburban areas. Escaping the loud, expensive, unorganized city buildings let corporations advance in many way. Production, distribution, efficiency and organization all increased after the move to the suburbs which positively stimulated the postwar economy. “These landscape types became embedded in the expectations of the corporate class and could at a glance embody both the reality and prospect of capitalist power.” [8][9][10]
Notes:
[1] Alan H. Hansen, Economic Issues of the 1960’s
[2] Alfred D. Chandler, The Emergence of Managerial Capitalism
[3] Burch, The Managerial Revolution Reassessed
[4] Barber, The American Corporation
[5] Mozingo, Pastoral Capitalism
[6] Heenan, The New Corporate Frontier: The Big Move to Small Town U.S.A.
[7] Mozingo, Pastoral Capitalism
[8] Chandler, Scale and Scope: The Dynamics of Industrial Capitalism
[9] Barber, The American Corporation
[10] Mozingo, Pastoral Capitalism