CHANDLER 1986 the Beginnings of the Modern Industrial Corporation

8/9/2019 CHANDLER 1986 the Beginnings of the Modern Industrial Corporation

1/9

The Beginnings of the Modern Industrial Corporation

Author(s): Alfred D. Chandler, Jr.Source: Proceedings of the American Philosophical Society, Vol. 130, No. 4 (Dec., 1986), pp. 382-389Published by: American Philosophical SocietyStable URL: http://www.jstor.org/stable/986925

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2/9

h e

Beginnings

o f

t h

o d e r n

ndustrial

Corporation

ALFREDD.

CHANDLER,

R.

Straus

Professor

of

Business

History,

Harvard

University

T

his

paper

reviews

the

beginnings

of

a

new and

powerful

economic

insti-

tution-the

modern business

cor-

poration.

A

modem

corporation, particularly

a

modern

industrial

corporation,

carries

on

a

number

of

functions-production,

distri-

bution,

research

and

development

and

the

like.

It

operates

in

many

regions,

indeed

in

many

nations,

and it makes and sells

a

wide

variety

of

products.

It is administered

by

a

hierarchy

of salaried

managers

who have

little

or

no

equity

in

the

enterprise they

com-

mand.

Today

such

enterprises

dominate

major

sectors of all

urban, industrial,

tech-

nologically

advanced economies.

This,

how-

ever, has not

always

been the case.

Indeed such

enterprises

are

entirely

mod-

em.

Before the mid-nineteenth

century

there

were no

multifunctional,

multinational,

and

multiproduct enterprises

administered

through

managerial

hierarchies

comparable

to that

depicted

on Chart

1.

By

the

mid-1840s

personally

managed

enterprises-those

that

carried

out

the

processes

of

production

and

distribution

in

market economies-had

be-

come specialized, usually handling a single

function and a

single product. They

operated

a

factory,

mine,

bank,

or

trading

office.

Where the

volume of

activity

was not

yet

large

enough

to

bring

such

specialization,

merchants

often remained involved in man-

ufacturing

and

banking

as

they

had

in the

early years

of

capitalism.

Some had

part-

*Read 8

November 1984.

nerships

in distant

lands.

But even

the

largest

and

most

powerful

of

early capitalists'

en-

terprises

were

tiny by

modern

standards.

For

example,

the Medici

Bank

of the

fif-

teenth

century

and

that of

the

Fuggers

in the

sixteenth were far more

powerful

financial

institutions

in their

day

than

any giant

banks

in

America,

Europe,

and

Japan

are in ours.

Yet

the

Medici

Bank

in

1470

operated

only

seven

branches.

The

total

number

of

indi-

viduals

working

in

the branches

and the

home

office

in Florence

was

fifty-seven.

Of

these

a dozen

were considered

managers,

but

they

were not

salaried

employees.

They

were

partners,

albeit

junior

ones,

who shared

in

the

profits

and who had jointand unlimited

liability

for losses.1

Today's

medium-sized

state

banks,

the

ones

in which

we

keep

our

checking

accounts,

have

as

many

as

200

branches,

5000

employees,

300

salaried

managers

(who

have

no

liability

at

all),

most

with the title

of vice

president.

They

handle

over a

million

transactions

a

week;

that is

more

than the

Medici

Bank

processed

in

the

century

of its existence.

Today,

too,

small

in-

dustrial enterprises handle a far greater vol-

ume of transactions

than

did those

giants

of

an earlier

capitalism-the

Hudson's

Bay,

the

Royal

African,

even the

East India

Company.

What made the difference

was,

of

course,

the

technological

revolution of modem

times-an even

more

profound discontinuity

in

the

history

of

civilized man than

was the

urban

revolution

of

the eleventh to thir-

teenth centuries that created the first

modem

PROCEEDINGS OF

THE

AMERICAN PHILOSOPHICAL

SOCIETY,

VOL.

130,

NO.

4,

1986

382


3/9

Chart

1

Multi-unit,

multi-functional

Enterprise

Board

I

CEO

~

Executive

CommitteeJ

Real

1

I

Estate

Personnel

IAI~~

tlonal(4)

Finance

(4)

Sales

(2)

Producion

(1)

1

1

t

isatt)

,

I

(stall)

Olhers

Treas,

Compl.

Audil

Beneaits

Adv.

Technical

Analysis

Tech.

Emp.

Rel.

Material

~Il*~

I

1~~~~~

i

r l

+~+

IProducts

-

1

1

Producl

Product

Product

Product Product

Product P

ol

Region

ol

Region

ol

HRgion

or

Area

or

Area or Area

,,rni'ml

uiuunrn

ht[lilirui

11i 11

n l1irit

nrr

oll

Seee oltces

I

Faclortes

I

I

Legal

P

R

Interna

I

Europe

I

I

Sales

Production

I


4/9

ALFRED D.

CHANDLER,

JR.

market economies

and

with them

modern

capitalism.

The enormous

increase

in

the

volume of

output

and transactions was

not

so much

the result of the

First Industrial

Revolution that

began

in Britain at the end

of the

eighteenth

century,

with

the

initial

application

of

the new source of

energy-

fossil

fuel,

in this case coal-to

the

processes

of

production.

It

resulted

much

more

from

the

coming

of

modern

transportation

and

communication. The

railroad,

telegraph,

steamship,

and

cable made

possible

modern

mass

production

and

distribution that

were

hallmarks

of

the Second

Industrial

Revolu-

tion of the late nineteenth and early twen-

tieth

centuries.

These new

high-volume

technologies

could not be

effectively

ex-

ploited

unless the

massive

flows of

materials

were

guided

through

the

process

of

both

production

and

distribution

by

teams of

sa-

laried

managers.

Thus the

first

such

managerial

hierarchies

appeared

during

the

1850s and

1860s to co-

ordinate the

movements of

trains

and

flow

of goods over the new railroadnetworks and

messages

over

the new

telegraph

system.2

They,

then,

quickly

came into

use to

manage

the

new mass

retailing

establishments-the

department

stores,

mail

order

houses,

and

chains or

multiple

shops-whose

existence

the

railroad and

the

telegraph

made

possible.

For

example,

by

1905 such

an

organization

permitted

the

Sears

Roebuck

mail

order

store

in

Chicago

to fill

100,000

orders in a

single

day-more

than

the

average

earlier

Ameri-

can

merchant

filled in

a

lifetime.

These

ad-

ministrative

hierarchies

grew

to a

still

much

greater

size in

industrial

enterprises

that,

again

on

the

basis

of

modem

transportation

and

communication,

integrated

mass

pro-

duction

and

mass

distribution

within a

single

business

enterprise.

One

way

to

review

the

coming

of

the

modern

corporation

is,

then,

to

focus

on the

evolution of

this

largest

and

most

complex

of

managerial

institutions-the

integrated

industrial

enterprise.3

These

integrated

en-

terprises

have

had

much in

common

whether

they

were

American,

European,

or

Japanese.

They appeared

at

almost

exactly

the same

moment in

history

in

the

United

States and

Europe and a little later in

Japan,

only

be-

cause

Japan

was later

to

industrialize.

They

clustered

in much

the

same

types

of

indus-

tries;

and,

finally, they grew

in

much

the

same

manner. In

nearly

all

cases

they

became

large,

first,

by

integrating

forward,

that

is in-

vesting

in

marketing

and

distribution

facil-

ities and

personnel,

by

moving

backward

into

purchasing

and

control

of raw

and

semifinished

materials; then,

though

much

less often, by investing in research and de-

velopment.

In

this

way

they

created

the

multifunctional

organization

that is

depicted

on

Chart 1.

They

soon

became

multinational

by

investing

abroad,

first in

marketing

and

then in

production.

Finally,

they

continued

to

expand

their

activities

by

investing

in

product

lines

related to

their

existing

busi-

nesses,

thus

creating

the

organization

de-

picted

on

Chart

2.

The

Similarities

By

examining

these

similarities in

the lo-

cation,

timing,

and

processes

of

growth

we

can

learn

much

about

the

evolution

of

this

institution.

The

similarities

in

the

location,

as

illustrated

by

Tables

1-5,

at the

end

of

this

article are

particularly

striking.

Table

1

indicates the

location

by

country

and

by

in-

dustries

of all

industrial

corporations

in

the

world which in 1973 employed more than

20,000

workers.

In

1973,

263

(65

percent)

of

the

401

companies

were

clustered in

food,

chemicals,

oil,

machinery,

and

primary

met-

als.

Just

under 30

percent

were in

subcate-

gories

of

major

industries

such

as

cigarettes

in

tobacco;

tires in

rubber;

newsprint

in

pa-

per;

plate

glass

in

stone,

glass,

and

clay;

cans

and razor blades

in

fabricated

metals;

and

mass

produced

cameras in

instruments.

Only

21

companies

(5.2

percent)

were in

apparel,

lumber,

furniture,

leather,

publishing

and

printing,

instruments

and

miscellaneous.

A

384


5/9

Chart

2

The

Multidivisional

Structure

Vice

President

Financial Slall

I

I

Treasurer

Comptroller

I I

I

I

A

i

,

I

Securities Taxes

Audil

Baneoils Slatistics

Accl.

E

Advisi

I

Bll

Cost

Receiving

xplosives Films Fibers Finishes Plaslics Chemicals

m

Jm

I-

I

I

I

I

i

I

rr

n

rr

lrIl

I'

-

I

I

I

I

Accl.

Purch.

Prod.

Sales

R.&.D

Trattic

Acct.

Purch

Prod.

Sales R.&

nIIn TnImrn Am

mrn

Annnn

mrnn

m

nmr

'resident

Dry

Slall

I

I

Engineering

D

D.

Traffic

_

_IFuncltonaJ

n

rrrm

?

1

*

?

I

E)


6/9

ALFRED

D.

CHANDLER,

JR.

second

point

that Table

1

emphasizes

is

the

predominance

of American

firms

among

the

world's

largest

industrial

corporations.

Table

2

shows

that in

the

United

States

the large industrial

corporations

had clus-

tered

throughout

the twentieth

century

in

the

same

industries in which

they

were

con-

centrated

in 1973.

The

pattern, depicted

in

Tables

3, 4,

and

5,

is

much the

same for

Brit-

ain,

Germany,

and

Japan.

Other

data

doc-

ument

what is

indicated

here,

that

the

American

firms

were

larger,

as well

as

more

numerous,

than

those in

other

countries.

For

example

in

1948,

only

fifty

to

sixty

British

firms had assets comparable to those of the

top

two

hundred in

the

United

States.

In

1930,

the

number

was

about

the

same.

For

Germany

and

Japan

it

was

smaller.

Well

be-

fore

World

War

II

the

United

States

had

more

and

larger

managerial

hierarchies

than

did

other

nations-underlining

the

fact

that

modern

industrial

enterprise,

and

with

it

managerial

capitalism,

first

emerged

there.

Explanation

of

the

Evolutionary

Process

Why

have

these

large

integrated,

hierar-

chial

enterprises

appeared

in

some

industries

but

rarely

in

others?

And

why

did

they

ap-

pear

at

almost

the

same

historical

moment

in

the

United

States

and

Europe?

Why

did

these

industrial

enterprises

in

advanced

economies

grow

in

the

same

manner,

first,

by

integrating

forward

into

volume

distri-

bution,

then

taking

on

other

functions,

then

becoming

multinational

and finally multi-

produce?

Because

these

enterprises

initially

grew

large

by

integrating

mass

production

with

volume

distribution,

answers

to

these

critical

questions

require

a

look

at

both

these

pro-

cesses.

Mass

production

is

an

attribute

of

specific

technologies

of

production.

In

some

industries

the

primary

way

to

increase

output

was

to

add

more

workers

and

machines;

in

others

it

was

by

improving

and

rearrangingthe

inputs,

by

improving

the

machinery,

furnaces,

stills,

and

other

equipment,

by

reorienting

the

process

of

production

within

the

plant,

by

placing

the

several

processes

of

production

required

for

a

finished

product

within a

single

works,

and

by

increasing

the

application

of

energy

(particularly

fossil fuel

energy).

The

first

set

of

industries

remained

labor

intensive,

the

second

set

became

capital

intensive. In

this

second

set

of

in-

dustries

the

technology

of

production

per-

mitted

much

larger

economies of

scale

than

was

possible

in

the

first;

that

is,

it

permitted

much

greater

reduction

in

cost

per

unit

of

output

as

volume

increased.

So

in

these

cap-

ital

intensive

industries

with

large

batch

and

continuous process technologies, large

plants,

operating

at

minimum

efficient

scale

(scale

of

operation

that

brought

the

lowest

unit

costs),

had

a

much

greater

cost

advan-

tage

over

small

plants

than

was

true

with

labor

intensive

technologies.

Conversely,

costs

per

unit

rose

much

more

rapidly

when

production

fell

below

minimum

efficient

scale

(of

say

80

to

90

percent

of

capacity)

than

was

true

in

labor

intensive

industries.

What is of basic importance for an un-

derstanding

of

the

coming

of

the

modern

managerial

industrial

enterprise

is

that

the

cost

advantage

of

the

larger

plants

cannot

be

fully

realized

unless a

constant

flow

of

materials

through

the

plant

or

factory

is

maintained.

The

decisive

figure

in

determin-

ing

costs

and

profits

is,

then,

not

rated

ca-

pacity

but

throughput-that

is,

the

amount

of

output

processed

during

a

single

day

or

other unit of time. The throughput needed

to

maintain

minimum

efficient

scale

requires

not

only

careful

coordination

of

flow

through

the

processes

of

production

but

also

the

flows

of

outputs

to

the

retailers

and

final

consum-

ers.

Such

coordination

cannot

happen

au-

tomatically.

It

demands

the

constant

atten-

tion of

a

managerial

team,

or

hierarchy.

Thus

economies

of

scale

are

only

technological;

while

those

of

throughput

are

organizational.

The

latter

depends

on

knowledge, skills, and

teamwork-on

the

organization

of

human

imputs

essential

to

exploit

the

potential

of

386


7/9

THE

MODERN

INDUSTRIAL CORPORATION

technological

processes.

In the newer

capital

intensive industries the

potential

economies

of scale

as

measured

by throughput

large

plants

with

managerial

teams

have

powerful

cost

advantages

over small ones. But in the

older

labor

intensive industries where neither

technological

nor

organizational

innovation

increased

minimum

efficient

scale,

the

large

plant

had far less

advantage.

Such

differentials in the

potential

scale

economies

not

only

indicate

why large

man-

agerial

enterprises appeared

and continued

to flourish in some

industries

but

not

in oth-

ers,

but also

suggests why they appeared

suddenly in the last decade of the nineteenth

century. Only

with the

completion

of

the

modern

transportation

and

communication

networks-those of the

railroad,

telegraph,

steamship,

and cable-could

materials flow

into

a

factory

or

processing plant

and the

finished

goods

move out at a rate of

speed

and volume

required

to achieve substantial

economies

of

throughput. Transportation

that

depends

on

the

power

of

animals, wind,

and current was too slow, too irregular,and

too uncertain to

maintain a level of

through-

put necessary

to

achieve

modern

economies

of scale.

Nearly

all

these new volume

producing

enterprises

created their own

national,

and

often

global,

marketing

and

distribution

networks.

They

did so for

two reasons.

First,

in

order to

assure the

continuing

throughput

essential to

maintain

the cost

advantage

of

scale, they preferred to rely on a sales force

of their own

rather

than to

depend

on

the

salesmen

of

wholesalers and

other

inter-

mediaries who

sold the

products

of

many

manufacturers,

including

those of

their

competitors.

Of more

importance,

mass dis-

tribution of

these

products-many

of

them

quite

new-very

often

required

extensive

investment in

specialized,

product-specific

facilities

and

personnel.

Because

the

existing

wholesalers

and

mass retailers

made their

profits

from

handling

related

products

of

many

manufacturers,

they

had

little

incen-

tive to

make

large

investments in

facilities

and

personnel

that could

only

be

used for a

handful

of

specialized products processed

by

a handful of

producers.

Moreover,

if

they

did,

they

became

dependent

on those few

large

producers

of

the

supplies

essential

to

make this

investment

pay.

Thus the

large managerial

firm

that inte-

grated

mass

production

and mass

distribu-

tion

appeared

in industries

with two

char-

acteristics.

The first and

most essential

was

a

technology

of

production

in

which the

re-

alization

of

potential

scale economies

de-

manded

close and

constant coordination

and

supervision of material flows by trained

managerial

teams.

The second was

the

pro-

duction

of

goods

whose

marketing

and

dis-

tribution

in

volume

required

investment

in

specialized,

product-specific

human

and

physical

capital.

Where this

was

not the

case,

that is in in-

dustries

where

technologies

did

not have

a

potentially high

minimum

efficient

scale,

where

coordination of

production

was not

technically complex and where mass distri-

bution did

not

require

specialized

skills and

facilities,

there

was little

incentive

for the

manufacturer to

integrate

forward

into dis-

tribution. In such

industries as

publishing

and

printing,

lumber,

furniture,

leather,

and

apparel

and

textiles,

specialized

instruments

and

machines,

the

large

integrated

firm

had

few

competitive

advantages.

In

these

indus-

tries,

the

small,

single

function firm

contin-

ued to prosper and to compete vigorously.

But

where this

was

the

case,

the

large

managerial

corporation

quickly

came

to

dominate.

In

the

production

and

distribution

of

many

branded,

packaged

products

in

food, tobacco,

and

such

consumer

chemicals

as

soap

and

pharmaceuticals,

in

industrial

chemicals,

in

oil,

in

rubber,

in

ferrous and

non-ferrous

metals,

in

mass

produced

light

machinery

such

as

sewing,

office,

and

agri-

cultural

machinery-and

standardized,

vol-

ume-produced

heavy

machinery

and in

mo-

tor

vehicles and

later

airplanes-a

small

387


8/9

ALFREDD.

CHANDLER,

JR.

number

of

large

hierarchical

enterprises

have

for

almost a

century

now been

competing

functionally

and

strategically

for

market

shares. In these

oligopolies,

and

from

almost

the

beginning

most have been

global oligo-

polies,

market share has

constantly

changed,

sometimes

quite

dramatically;

but

the

actual

players

within

these

oligopolies

have

re-

mained

relatively unchanged.

In

these

in-

dustries

salaried

managers

in

much

the

same

corporations

have

for

many

decades

made

the

critical

decisions

about

current

produc-

tion

and

distribution

and

about

the

allocation

of resources for future

production

and dis-

tribution.

They

have

made

and

in

most

cases

continue

to

make

the

decisions

so

central

to

the

health

and

growth

of

modern

industrial

economies.

NOTES

1.

Raymond

De

Roover,

The Rise and

Decline

of

the

Medici

Bank,

1397-1497

(Cambridge,

Mass.,

1963),

87,

91.

The earlier

Peruzzi

bank

had

branches

managed

by

employees (fattore):

However,

all

branches of major importance were managed by

partners,

p.

80.

The

BayBank

where

I

have

my

checking

account

operates

over

200

branches,

has

close

to

5,000

employees,

some

300

managers

and

daily

clears

1.25

million

checks. The

Virginia

Na-

tional Bank

where

my

wife has an

account with

its

197

branches is

much the

same

size.

2.

Alfred

D.

Chandler,

Jr.,

The

Visible

Hand:

The

Man-

agerial

Revolution in

American

Business

(Cambridge,

1977),

chaps.

3-6 for

the

coming

of

such

hierarchies

to

manage

railroad

and

telegraph

systems

and

chap.

7 for their use in the management of mass distri-

bution;

pp.

231-32

describe the

organization

of

Sears

Roebuck.

3.

The

following

paragraphs

follow

closely my

The

Emergence

of

Managerial

Capitalism,

Business

History

Review

58

(Winter

1985):

472-503.

TABLE 1

The

Distribution

of the

Largest

Manufacturing

Enterprises

with

more

than

20,000

Employees,

by

Industry

and

Nationality,

1973

Outside

of

Grand

S.I.C.

U.S.

the

U.S.

U.K.

Germany

Japan

France

Others

Total

20

Food

22

17

13

0

1

1

2

39

21

Tobacco

3

4

3

1

0

0

0

7

22

Textiles

7

6

3

0

2

1

0

13

23

Apparel

6

0

0

0

0

0

0

6

24

Lumber

4

2

0

0

0

0

2

6

25

Furniture

0

0

0

0

0

0

0

0

26

Paper

7

3

3

0

0

0

0

10

27

Printing

and

Publishing

0

0

0

0

0

0

0

0

28

Chemical

24

28

4

5

3

6

10

52

29

Petroleum

14

12

2

0

0

2

8

26

30 Rubber 5 5 1 1 1 1 1 10

31

Leather

2

0

0

0

0

0

0

2

32

Stone,

Clay

and

Glass

7

8

3

0

0

3

2

15

33

Primary

Metal

13

35

2

9

5

4

15

48

34

Fabricated

Metal

8

6

5

1

0 0

0

14

35

Machinery

22

12

2

3

2

0

5

34

36

Electrical

Machinery

20

25

4

5

7

2

7

45

37

Transportation

Equipment

22

23

3

3

7

4

6

45

38

Instruments

4

1

0

0

0

0

0

5

39

Miscellaneous

2

0

0

0

0

0

0

2

Diversified/Conglomerate

19

3

2

1

0

0

0

22

Total

211

190

50

29

28

24

59

401

Source: Fortune,May 1974 and August 1974.

In

1970

the

100

largest

industrials

accounted

for

more

than

a third

of

net

manufacturing

output

in

the

U.S.

and

over

45%

in

the

U.K. In

1930

they

accounted

for

about

25%

of

total

net

output

in

both

countries.

388


9/9

THE

MODERN

INDUSTRIAL

CORPORATION

389

TABLE

2

The Distribution

of

the 200

Largest

Manufactur-

ing

Firms in the United

States,

by

Industry*

S.I.C. 1917 1930 1948 1973

20 Food

30 32

26 22

21 Tobacco

6 5

5 3

22 Textiles

5 3 6 3

23

Apparel

3 0 0

0

24

Lumber

3

4 1 4

25

Furniture

0

1 1

0

26

Paper

5 7

6 9

27

Printing

and

Publishing

2 3

2 1

28 Chemical

20 18 24

27

29 Petroleum

22

26 24 22

30 Rubber

5 5 5

5

31 Leather

4 2 2

0

32

Stone,

Clay

and Glass

5 9 5

7

33 Primary Metal 29 25 24 19

34 Fabricated

Metal

8 10 7

5

35

Machinery

20 22 24 17

36

Electrical

Machinery

5

5 8

13

37

Transportation

Equipment

26

21

26

19

38 Instruments

1 2

3 4

39 Miscellaneous

1 1

1 1


0

0

0

19

200

200

200

200

otal

*

Ranked

by

assets.

TABLE

4

The

Distribution

of

the 200

Largest

Manufactur-

ing

Firms in

Germany,

by Industry*

S.I.C. 1913 1928 1953 1973

20

Food

23 28 23

24

21

Tobacco

1 0

0 6

22

Textiles

13 15 19

4

23

Apparel

0

0 0

0

24

Lumber

1

1 2 0

25 Furniture

0 0

0 0

26

Paper

1 2

3 2

27

Printing

and

Publishing

0 1 0

6

28 Chemical

26

27 32 30

29 Petroleum

5 5

3 8

30 Rubber

1 1 3 3

31

Leather

2

3 2 1

32

Stone,

Clay

and Glass

10 9 9 15

33 Primary Metal 49 47 45 19

34

Fabricated Metal

8 7 8

14

35

Machinery

21 19

19 29

36 Electrical

Machinery

18

16 13 21

37

Transportation

Equipment

19 16 14 14

38 Instruments

1

2 4 2

39

Miscellaneous

1

1 1 1


0

0 0

1

Total 200

200 200 200

*

Ranked

by

sales for 1973 and

by

assets

for the other three

years.

TABLE

3

The Distribution

of

the 200

Largest

Manufactur-

ing

Firms

in the United

Kingdom, by

Industry*

S.I.C.

1919 1930 1948 1973

20 Food 63

64 52 33

21

Tobacco

3

4 6

4

22

Textiles

26

24 17

10

23

Apparel

1 3

2

0

24 Lumber 0

0

0

2

25

Furniture

0 0

0 0

26

Paper

4 5 6

7

27

Printing

and

Publishing

5

10

6

7

28 Chemical 11 9 19 21

29

Petroleum

3 3

3 8

30

Rubber 3 3

2

6

31

Leather 0 0

1

3

32

Stone,

Clay

and Glass

2

6

7

16

33

Primary

Metal 35 18

24 14

34

Fabricated Metal

2

7

9 7

35

Machinery

8

7

10 26

36 Electrical

Machinery

11 18 12 14

37

Transportation

Equipment

20

14

20

16

38

Instruments 0

1

1 3

39

Miscellaneous 3 4 3

1


0 0 0 2

Total

200 200 200 200

*

Ranked

by

sales for

1973

and

by

market value

of

quoted

capital

for

the other

years.

TABLE5

The Distribution of the

200

Largest

Manufactur-

ing

Firms

in

Japan,

by Industry*

S.I.C.

1918

1930 1954 1973

20 Food

31 30

26 18

21

Tobacco

1 1

0 0

22

Textiles

54 62 23

11

23

Apparel

2 2 1 0

24

Lumber

3 1

0 1

25

Furniture

0 0

0 0

26

Paper

12 6

12 10

27 Printing and Publishing 1 1 0 2

28

Chemical

23 22 38

34

29

Petroleum

6 5

11 13

30 Rubber

0 1 1 5

31

Leather 4

1 0 0

32

Stone,

Clay

and

Glass

16

14

8

14

33

Primary

Metal

21 22 28 27

34 Fabricated Metal

4 3 6 5

35

Machinery

4 4

10 16

36 Electrical

Machinery

7

12

15 18

37

Transportation

Equipment

9

11

18 20

38 Instruments

1

1 3 5

39 Miscellaneous

1 1 0

1


0 0 0 0

Total 200 200 200 200

*

Ranked

by

assets.

CHANDLER 1986 the Beginnings of the Modern Industrial Corporation

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