Book reviews

This suggestion, I am afraid, is wishful thinking. In a nation which produces 1000 lawyers for every 100 engineers, lobbies have no incentives to think that somebody else can do the job better.

Although the book is not meant to be a comparative examination of com- munication policy making, it is a pity that the author, uniquely qualified, does not bring more frequently into the discussion the experience of other countries - of his native UK, in particular - where deregulation, or ' liberalization', is on the national agenda. It is worth noting that the only countries to have followed the US example - Japan and the UK - are two of the USA's staunchest allies. What does it say of the conditions under which the USA can export its deregulation policy? How much arm- twisting was involved in pushing Japan to privatize NTT? The international implications of the US deregulatory moves deserve greater treatment.

Candide

This book is in a category of its own and, I maintain, stands out among standard telecommunications litera- ture. It is the product of the inquisitive and irreverent mind of a non- economist, non-lawyer and - not un- importantly - non-American scholar. Whereas the broadcasting and cable industry has been for some time under the magnifying glass of criticism from a variety of quarters, all discussion of the telecommunication industry is still dominated by a closely-knit club of high-priced Washington lawyers as evidenced, for instance, by the recent- ly published Toward a Law of Global Communications Networks. In tune with the ideology of the time and guided by its clientele's interests, this community is forcefully promoting the view according to which US deregula- tory moves - embodiment of 'the best governed are the least governed" credo - are seen as a deterministic, inexorable, and universal process. Like biological evolution, telecom- munication deregulation becomes a law of nature. This imperial claim, whose seductive power has already captured the mind of some unsuspect-

ing non-Americans, is not conducive to a reasoned understanding of the issues at stake.

The novelty and complexity of the forces at work called for a fresh mind to make sense of them. Tunstall is the Candide whom the students of the US communication arena have longed for. The author's invaluable contribution, from his vantage point as an outsider, is to r e v e a l in a t h o r o u g h l y documented and highly readable text

the extent to which US deregulation, far from being a universal law of nature, is artificial - the product of the peculiar nature of the US political system.

Jean-Luc Renaud School of Joumalism and

Mass Communication Minneapolis

MN, USA

Johns telephone history

Hopkins/AT&T series in

THE TELEPHONE ENTERPRISE The Evolution of the Bell System's Horizontal Structure, 1876-1909 by R.W. Garnet 1985, 210 pp, $22.50

THE ANATOMY OF A BUSINESS STRATEGY Bell, Western Electric, and the Origins of the American Telephone Industry by George David Smith 1985, 237 pp, $20.00

FROM INVENTION TO INNOVATION Long-distance Telephone Transmis- sion at the Turn of the Century by Nell H. Wasserman 1985, 160 pp, $17.50

published on behalf of A T& T by The Johns Hopkins University Press, Balti- more, MD, USA

Johns Hopkins and AT&T are to be congratulated on their approach to this series - supporting individuals in a personal quest through the Bell archives. An al ternat ive orderly approach would have been to divide by topic and time, and commission one or a number of writers to cover the history in a divided patchwork of time and topic. As it is, there is a degree of redundancy, but we have three different approaches to a similar period: two with substantially the same topic, and one focusing on a particular aspect. The sum informs and complements the parts.

My judgement is that two of these volumes make an excellent and in- structive read, and succeed in their own terms; the other I found harder

work, lacking the sense of develop- ment and adventure which informs the other two.

The volume by Garnet is that which I found heaviest going. It is essentially a chronicle, competently related, and competently referenced, but without a sense of something to demonstrate or disprove, a sense of quest or inquiry. At t imes the language appears appropriate, but lacking in under- standing of the intellectual tradition from which it derives. Indeed, title and subtitle betray unease on this score - The Telephone Enterprise: The Evolution of the Bell System's Hori- zontal Structure, 1876-1909. There is not much on this horizontal structure, and no discussion of what structure might mean. Similarly, Garnet 's "re- flections' (Chapter 10) underscore this point: 'historians of the firm will be disappointed if they expect to find uniform patterns of development or simple causal relationships in business history. Instead they can anticipate finding evidence of complex and shift- ing patterns of behaviour shaped by a wide variety of factors both internal and external to the firm' (p 155), and 'those studying the evolution and be- haviour of modern business institu- tions would do well to look beyond the prevailing technological or economic imperatives of corporate development in order to understand the sometimes subtle political factors affecting com- pany growth' (p 156). Amen to both. But one doubts that many historians had thought otherwise, though some quasi-scientific approaches to business and organization do imply some such

358 TELECOMMUNICATIONS POLICY December 1986

simple stimulus-response determin- ism.

Nevertheless, Garnet provides a chronicle of the Bell System’s de- velopment, from invention, through licensing and leasing, to ownership and control in a growing market, and accommodation with state regulation in the light of the technology’s pecu- liar economic characteristics. It pro- vides good access and departure for those who wish to draw their own lessons and ask their own questions. For instance, Vail and Madden were the agents of an administration which would exhibit ‘the makings of an orderly decision-making mechanism, organised around a new collective leadership, based upon notions of consensus, co-operation, and a sys- tematic division of administrative re- sponsibility’ (p 28) and with a system for managing routine transfers of ex- ecutive power - not bad for the 188Os, long before Weber’s exploration of the virtues of bureaucracy. And, pace Garnet’s comments on technological and economic imperatives (srcpru), ‘the operational and technical de- mands of the network were pressing certain areas of the enterprise towards a higher level of organisational in- tegration’ (p 68) - a point which might have proved newsworthy to many management textbooks of the 1960s. with their concern for authority, struc- ture and administrative rationality. And so on, with standardization and comparability of accounting figures (p 102), standardization of technical specifications and procedures, the drive for technical innovation, and quality control @as&r), separation of corporate from operating activities (p 93), internal management by consen- sus (p 116), and Vail’s far-sighted espousal of regulation as the price of a near-monopoly position (p 152). If such tendencies, formulated with the language of historical hindsight, are valid, one longs to know whether AT&T was uniquely advanced in this respect. One is led to wonder why the lessons of history need continual re- learning.

By contrast, t,he volume by Smith deals with roughly the same period and events as Garnet’s - The Anatom) of a Business Strategy: Bell, Western

Electric and the Origins of the Amer- ican Telephone Industry - but with a clear focus, and a practical under- standing of strategy and the process of strategy development, of motive. in- tention and chance. These features make Smith’s unfolding of the chroni- cle an enthralling and convincing read, enhanced by his Dickensian ability to close one chapter with the ,lead into the next. In this account ‘strategy’ emerges as incremental growth, re- sponse to challenge, threat and oppor- tunity, trial and learning from experi- ence, including the transfer of lessons from other industry. It is the sense of choice, of other scenarios against which to judge the event. which gives credence to the story, and a measure of the achievement of the managers. In Smith’s words,

it was Bell’s good fortune to have imagin- ative managers at the helm. Their ability to cope with the unexpected - to solve prob- lems as they arose and seize opportunities as they appeared - makes the early history of the Bell System particularly instructive

Every day that the company was in business, it had ample opportunity to fail. as well as to succeed.

This ability to learn. experiment and adjust also produced a mixed centralized/decentralized system - a highly integrated vertical structure which facilitated ‘the centralised plan- ning. production. and orderly imple- mentation of large-scale capital- intensive. interdependent technologic- al systems at a reasonable cost’. It was complemented by a ‘remarkably ex- tensive decentralised operating struc- ture well adapted to local demog- raphic. economic and political cir- cumstances’ - Garnet’s horizontal structure.

The third volume, by Wasserman, has a narrower focus - the invention and innovation which led to the prac- tical application of loading, making possible long-distance telephone transmission. The study demonstrates a fascination with the translation of scientific theory, mathematically formulated, into practice, and the technical, human, and organizational problems which this entailed in the specific case of loading. This volume also provides a well -argued, well developed story, of the tangled pro-

TELECOMMUNICATIONS POLICY December 1986

gress of human understanding. from the mathematical formulations of Maxwell and Heaviside to the experi- mentations by Campbell and his col- leagues at Bell, with a view to what was operationally and economically feasible.

Wasserman starts with a simple sequential model (‘ideal type’) of the logical steps from invention to imple- mentation, which he subsequently re- fines with data from his own case to produce feedback loops and temporal rearrangement of the steps. Most case studies of innovation with which I am familiar also seem to depart from such ‘ideal type’ sequential models. which suggests that such models are but organizing frameworks, and that a quest for an all-embracing theory or model of innovation - like the quest for uniform patterns of development or simple causal relationships in hu- man affairs (supru) - is likely to be vain. Wasserman goes to great lengths to explain the technical and mathematical background. which made this innovation an intellectual as well as a practical challenge; and incidentally provides convincing evi- dence of the priority of Campbell’s work over that of Pupin. who was awarded the patent for loading and was consequently widely recognized. In sum, this is a substantial contribu- tion to the literature on innovation. to the background to AT&T’s corporate approach to organizing science and technology, and one significant piece of the jigsaw of AT&T’s early history.

Virtue of history

What wider issues, beyond the par- ticulars of their history, are raised by these three books? First. they demon- strate the virtue of history at the human level of choice, rather than grand determining events and ab- stracted ‘organizational’ response to stimulus. The interest lies in the peo- ple of the organization, their percep- tions and processes: insightful recon- struction of problems, perceptions and choices in the context of their times provides a measure of the achieve- ment. This is important for debates on the primacy of technology-structure- strategy. If between each ‘factor’ one

359

Book reviews

interposes perception, value, inter- pretation and choice, then one sees there may be no determining 'cause' - though there may be prevailing pat- terns. There was a subtle gloss in the 1960s and 1970s from prevailing evi- dence into a normative message - that what is confirmed by general practice is best practice. It has taken an exter- nal shock, such as Japanese compet- ition, to stimulate a reassessment, evident in the current fashion for corporate culture and stories of corpo- rate heroes. One suspects that future historians will ask how so many indus- tries and companies could be so collec- tively off beam. In this respect, com- parative awareness of alternative con- temporary practice can be usefully complemented by historical aware- ness. Ironically, the early history of A T & T shows that there was no appropriate current best practice or prevailing wisdom to draw on, that its managers ' achievements s temmed from their capacity to be flexible, open-minded and experimental.

Blessed state

Nevertheless, with hindsight AT&T appears to have been in a blessed state for which many executives would give their eyeteeth or pension entitle- ments: an initial degree of strong patent protection, in an enormously expanding market pushing towards supply monopoly. But these volumes show that events might have fallen otherwise. The early Bell System had to police its patents for violations, m on i to r compe t ing technologies , rapidly develop its own, manage (through chronic capital shortage) re- lations with licensees; and in a short period transform its strategy (with implications for structure, finance, re- search, manufacture and operations) from licensing to integration and con- trol. Western Union'~ competitive threat might easily have turned out otherwise. Not only unsatisfied de- mand (from customers via affiliates), but the threat of competition drove AT&T towards policies of growth, innovation and ownership. The spec- trum from monopoly to competition provides no analytic apparatus cap- able of evaluating the alternatives and

achievements within a monopoly. Thus there are lessons from these histories for evaluating the perform- ance and achievements of other such enterprises, whether publicly owned, or regulated.

But just as regulators can become the captives of the regulated, so, in getting close to a subject, a historian or researcher can become both capti- vated and captured. Has this hap- pened here? It has happened only in the sense that these are histories (not hagiographies) of management from the inside, and as such are concerned with perspectives from the inside. There is sufficient presentation of evidence and argument for the reader to make his or her own assessment of bias. There are occasional references to contemporary views of AT&T as a member of the set of predatory mon- opolists, but there is little here on dissatisfied customers, on aggrieved competitors, on labour relations, on class and privilege, or on the visual pollution or danger produced by net- works of wires in city streets. Such matters lie in the province of a wider contemporary social and business his- tory (perhaps another Johns Hopkins/ AT&T volume?). These histories sug- gest that the managers of this early

period could ill afford concern along these lines. As Smith puts it, ' the underlying premise, though rarely ar- ticulated, was that competition re- mained a persistent threat to the business' (p 99). Amen to the virtues of competition and diversity.

Finally, current concern with corp- orate culture has elevated the impor- tance of stories ( 'myths') in reinforc- ing and transmitting values, in helping to make human (rather than rational) sense of where corporations have come from and are going. From this perspective one hopes that the story of Bell"s creation proves inspirational. As with Augustus" achievements, if you look for their monument, look about you. These histories do justice to the early days of AT&T. How would our contemporary telecom- munications managers wish their his- tory to be written?

Nick Woodward Templeton College The Oxford Centre

for Management Studies Kennington Oxford, UK

These three books are the first in a series on the formation and development of AT&T.

Renaissance for Europe's IT industries SUNRISE EUROPE

The D y n a m i c s of I n fo rma t i on Technology

by lan Mackintosh

Basil Blackwell, Oxford, UK, 1986, 288 pp, £ 17. 50

Dr Ian Mackintosh has produced a campaign book for the renaissance of Europe ' s partially, if not totally, eclipsed information technology (IT) industries. His hypothesis is that, without an internationally competitive IT industry, Europe is doomed to a vicious cycle of economic decline. The social, political and economic goals cherished in post-war Europe will

become no more than fragments of a broken dream.

If a way can be found of creating, by 2005, an additional EEC market for electronic goods of about $350 bn per annum and the concomitant exchequer burden of $15 bn per annum of renaissance investment for 20 years can be afforded, the Community electronics industry will become on a par with the world's best, and Europe's econo- mic prosperity in the twenty-first century will have been assured (p 167). The book is organized into three sections, each containing four chap- ters. The first part, 'Seeds and weak beginnings', chronicles the growth of the information technology revolution and the development paths of, respec- tively, the USA, Japan and Europe. The second part, 'Economics and cal- culators' , attempts to quantify the gap which exists between Europe, the

360 T E L E C O M M U N I C A T I O N S POLICY December 1986