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² Ibid., 200.

³ Ibid., chap. 4.

⁴ For the growth and competitive capabilities of the U.S. chemical firms, see Ibid., 170–93; for Swiss chemical firms, Ibid., 573; and for ICI, Ibid., 358–65; for U.S. automobile production, Ibid., 209.

⁵ Ibid., 221.

⁶ Goldsmith, R. W., Comparative National Balance Sheets (Chicago, Ill., 1985), 136.Google Scholar

⁷ Chandler, Scale and Scope, 415–19, 499, 512–13, 532–33, 597. The Grossbanken also voted the shares of their clients' portfolios that they managed.

⁸ Ibid., 253–54, 285, 398, 775.

⁹ According to a Securities and Exchange Commission report, “by the end of 1937, the average dollar which had been invested in the index of leveraged investment company stock was worth 5 cents, while the nonleveraged dollar was worth 48 cents.” Krooss, Herman E. and Blyn, Martin R., A History of Financial Intermediaries (New York, 1971), 169.Google Scholar

¹⁰ Carosso, Vincent P., Investment Banking in America: A History (Cambridge, Mass., 1970), chaps. 17–18Google Scholar, and McCraw, Thomas K., Prophets of Regulation: Charles Francis Adams, Louis D. Brandeis, James M. Landis, Alfred E. Kahn (Cambridge, Mass., 1984), chaps. 6 and 7Google Scholar, are excellent studies of the passage and review of legislation to regulate financial markets.

¹¹ For the uniqueness of antitrust legislation, see Chandler, Scale and Scope, 71–79, 89, 296–97, 398, 423–24, 537, 549, and McCraw, Prophets of Regulation, chaps. 3 and 4.

¹² McCraw, Thomas K., “Regulatory Agencies,” in Encyclopedia of American Economic History, ed. Porter, Glenn (New York, 1980), 2: 778–807.Google Scholar

¹³ Johnson, H. Thomas and Kaplan, Robert S., Relevance Lost: The Rise and Fall of Management Accounting (Boston, Mass., 1987), 84.Google Scholar For the development of the rate-of-return formula and its employment at Du Pont and General Motors, see Chandler, Alfred D. Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977), 444–48, 460–63.Google Scholar

¹⁴ Chandler, The Visible Hand, 460–61. Johnson and Kaplan, Relevance Lost, 102–11, is especially good on reviewing GM's “flexible budgeting.”

¹⁵ Newcomer, Mabel, The Big Business Executive: The Factors That Made Him, 1900–1950 (New York, 1955).Google Scholar The small number of shares owned by top executives is also indicated in U.S. Temporary National Economic Committee, Distribution of Ownership in the 200 Largest Non-Financial Corporations (Washington, D.C., 1940), chap. 7Google Scholar; and Birch, Philip H. Jr., The Managerial Revolution Reassessed: Family Control in America's Large Corporations (Lexington, Mass., 1972), 36–37, summarized in Chandler, Scale and Scope, 144–45, 191–93, 222–24.Google Scholar

¹⁶ Fligstein, Neil, The Transformation of Corporate Control (Cambridge, Mass., 1990), chap. 6Google Scholar, provides an excellent review of the impact of antitrust policies on corporate strategy after the Second World War.

¹⁷ Neil H. Jacoby, “The Corporate Conglomeration,” The Center Magazine, Spring 1969, reprinted in Chandler, Alfred D. Jr., and Tedlow, Richard S., The Coming of Managerial Capitalism: A Casebook in the History of American Economic Institutions (Homewood, Ill., 1985), 739.Google Scholar

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¹⁹ Johnson and Kaplan, Relevance Lost, chaps. 11 and 12 and p. 221. They comment on the impact of the growth of the enterprise and other institutional changes in recent years on the use of ROI in evaluating divisional performance, 203–4.

²⁰ I analyze these changes and the systematization and bureaucratization of the strategic-planning process in “The Functions of the Corporate HQ Unit in Multidivisional Firms,” Strategic Management Journal 12 (Winter 1991): 31–50.CrossRefGoogle Scholar

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²⁴ Krooss and Blyn, History of Financial Intermediaries, 238.

²⁵ Porter, Michael, Capital Choices: Changing the Way America Invests in Industry (Washington, D.C., 1992), 42Google Scholar; New York Stock Exchange, Fact Book, 1987 (New York, 1988), 71.Google Scholar

²⁶ Hall, Bronwyn H., “The Impact of Corporate Restructuring on Research and Development,” Brookings Papers on Economic Activity: Microeconomics (Washington, D.C., 1990), 85–135Google Scholar, and Hall, , “Corporate Restructuring and Investment Horizons in the United States, 1976–1987,” Business History Review 68 (Spring 1994): 110–143.CrossRefGoogle Scholar

²⁷ Chandler, Scale and Scope, 171. Until after the Second World War, the most available data on research intensity measured scientific personnel employed rather than the ratio of R&D expenditures to sales.

²⁸ Dertouzos, Michael L., et al. , Made in America: Regaining the Productive Edge (Cambridge, Mass., 1989), 189.Google Scholar

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³⁰ Ibid., 9.

³¹ For Allied-Signal, see Madrick, Jeff, Taking Arms: How We Got from the First Hostile Takeover to Megamergers, Corporate Raiding and Scandal (New York, 1987), 230–33Google Scholar; Brooks, John, The Takeover Game (New York, 1988), 179–81Google Scholar; The Wall Street Journal, 21 May 1986, 28 Sept. 1987. The Digman story can be followed in Ibid., 21 May, 11 June, 1 Oct., 1986; 17 Feb., 27 March 1987; 3 Feb. and 29 July 1988. The quotations are from 21 May 1986.

³² Directory of Multinationals (1989), 1: 42; also The Wall Street Journal, 28 Sept. 1987.

³³ Bruck, Connie, The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of Junk Bond Raiders (New York, 1989), 275, and Fortune (19 Nov. 1990), 150–51.Google Scholar

³⁴ Hounshell, David A. and Smith, John Kenly, Science and Corporate Strategy: Du Pont R&D, 1902–1980 (New York, 1988), 517–19Google Scholar, for Pont, Du, and Dyer, Davis and Sicilia, David B., Labors of a Modern Hercules (Boston, Mass., 1990), 363–73Google Scholar, for Hercules. The quotation is from p. 364.

³⁵ Dertouzos, et al., Made in America, 195–97, and Bozdogan, “Transformation of the U.S. Chemicals Industry,” 31–37. Valuable too is Bower, Joseph L., When Markets Quake: The Management Challenge of Restructuring Industry (Boston, Mass., 1986Google Scholar), especially chaps. 3, 5, and 6. The rubber, food, and mining companies listed in Table 1 also came into the industry, usually by investing in technologically related lines.

³⁶ Bozdogan, “Transformation of the U.S. Chemicals Industry,” 33–34. The shift from commodities into specialties is elegantly documented in Lane, Sarah J., “Corporate Restructuring in the Chemicals Industry,” in The Deal Decade: What Takeovers and Leveraged Buyouts Mean for Corporate Governance, ed. Blair, Margaret M. (Washington, D.C., 1993), 239–72.Google Scholar

³⁷ Bozdogan, “Transformation of the U.S. Chemicals Industry,” 37–40. In 1987, ICI acquired Stauffer Chemical.

³⁸ Ibid., Figure 9, p. 97 for 1987; Business Week (13 Jan. 1992), 74 for 1991.

³⁹ Temin, Peter, Taking Your Medicine: Drug Regulation in the United States (Cambridge, Mass., 1980), chap. 4.CrossRefGoogle Scholar

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⁴² Dertouzos, et al., Made in America, 206–16, summarizes the performance of the aircraft industry. That of computers and semiconductors is summarized in Chandler, Alfred D. Jr., “The Enduring Logic of Industrial Success,” Harvard Business Review 68 (March-April 1990): 136–38.Google Scholar See Flamm, Kenneth, Creating the Computer: Government, Industry, and High Technology (Washington, D.C., 1988), 168, 201Google Scholar, for the U.S. computer market share in Europe and Japan. For electrical and electronic equipment, the information is more scattered.

⁴³ See Moskowitz, MiltonLevering, Robert, and Katz, Michael, eds., Everybody's Business, An Almanac: The Irreverent Guide to Corporate America (San Francisco, Calif., 1980Google Scholar) and Moskowitz, Levering and Katz, eds., Everybody's Business (1990) for many of these food, drink, and tobacco companies, supplemented by the Directory of Multinationals and Moody's Manual. For Beatrice, see Baker, George P. III, “Beatrice: A Study in the Creation and Destruction of Value,” Journal of Finance 47 (July 1992): 1081–119.CrossRefGoogle Scholar

⁴⁴ “ConAgra, Inc.—The Food Company,” Harvard Business School, Case N1-589-004 (1988).

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⁴⁷ See Yonekura, Seiichiro, The Japanese Iron and Steel Industry (London, 1994), 223, 236.Google Scholar For information on U.S. steel companies, see Directory of Multinationals and Moody's Manual and Moskowitz, Levering, and Katz, eds., Everybody's Business (1990), 505–15. The major postwar expansion of U.S. steel capacity using the older technologies had been carried out a decade earlier; see Tiffany, Paul, The Decline of American Steel (New York, 1988), 132, 173–76.Google Scholar

⁴⁸ See Financial World (27 May 1986), 44, 48, and (Fall 1987), 6–13; Fortune (28 March 1988), 91–92; Forbes (25 April 1988), 123–24; The Wall Street Journal, 28 June 1989, A1, A8, and The New York Times, 30 June 1989, D1, 28 Sept. 1989, D1.

⁴⁹ March, Barbara, A Corporate Tragedy: The Agony of International Harvester Company (New York, 1985), chaps. 10–17Google Scholar, and Broehl, Wayne G. Jr., John Deere's Company: A History of John Deere & Company and Its Tunes (New York, 1984), chaps. 14–16.Google Scholar Particularly valuable on the Deere-Harvester rivalry is “Deere Sails; Harvester Ails,” Sales Marketing and Management (4 Feb. 1985), 30–33.

⁵⁰ For Caterpillar's strategy see F. M. Scherer, “The U.S. Response to High Technology Imports,” paper presented at the Business History Seminar, Harvard Business School, 17 Dec. 1990, 42–46.

⁵¹ Directory of Multinationals, Moody's Manual, and references in Broehl, John Deere's Company, and Scherer, “U.S. Response to High Technology Imports”; also Industry Week (9 Feb. 1987), 45–46. For its earlier history, see Chandler, Scale and Scope, 202–3.

⁵² Information on these companies and those listed in the next four paragraphs comes from the Directory of Multinationals and Moody's Manuals, supplemented by Moskowitz, Levering, and Katz, eds., Everybody's Business (1980). For FMC's development, see Chandler, Scale and Scope, 202; for the growth of Cooper Industries, Keller, David N., Cooper Industries: 1833–1982 (Athens, Ohio, 1983).Google Scholar For Cooper and McGraw-Edison see The Wall Street Journal, 25, 27, 28 March, 2 April 1986. For FMC's financial restructuring and the resulting legal suit against Boesky, see ibid., 2 Feb., 9 Dec. 1986.

⁵³ Directory of Multinationals (1989), 1: 326–27.

⁵⁴ For Fruehauf, see Moskowitz, Levering, and Katz, eds., Everybody's Business (1990), 287–89, and The Wall Street Journal, 25 April, 2 May, 16, 26 June, 25 Aug. 1986, 25 April 25 Aug., 1 Sept., 5 Dec. 1988; 29 March, 9 May, 17 July 1989; for Clark Equipment, ibid., 11 March, 4, 11, 13 May 1987; for Borg-Warner, Moskowitz, Katz, and Levering, eds., Everybody's Business (1990), 267.

⁵⁵ Bhagat, Sanjai, Shleifer, Andrei, and Vishny, Robert W., “Hostile Takeovers in the 1980s: The Return to Corporate Specialization,” Brookings Papers on Economic Activity: Microeconomics (Washington, D.C., 1990), 55.Google Scholar