Alfred Chandler died last week. Chandler, along with Ronald Coase and Oliver Williamson opened up the black box of the firm. Of the three, Chandler took the longest view emphasizing how new technologies for handling information (telephone, telegraph, record keeping) gave rise to new organizational structures in business (the M-form). Critical to Chandler, however, was that the new organizational structures were necessary to fully exploit the new technologies and they came about neither automatically nor without great experimentation, evolution and slow transformation. We can be sure that the computer and the internet will be changing business structure for at least the next quarter century.
Chandler’s classic The Visible Hand: The Managerial Revolution in American Business is sometimes understood ala Berle and Means as a challenge to the idea of the invisible hand and "market capitalism." The real lesson, however, is how the invisible hand guides not just buying and selling but organizing and thinking.