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The modern corporation and American political thought
Focus on Books
Reviews of currentbooks discussing subjects on the horizon of business activities, particularly those on controversial issues being encountered by both practitioners and teachers, will be considered for publication. Manuscript guidelines are available upon request.
The
Modern
Corporation and American
Political
Thought By Scott R. Bowman
and
From State to Market? The Transformation of French Business and Government By Vivien A. Schmidt lhe reviewer, Alfred LNamant, is a professor of political science at Indiana University, Bloomington, Indiana.
For several reasons, the two books under review would seem to be a poorly matched pair. They deal with two countries widely differing in size, history, and people, and with greatly contrasting economic systems and political ideologies. In an even sharper contrast, Scott Bowman examines the place of the modern corporation in the history of U.S. political thought, whereas Vivien Schmidt focuses on the empirical evidence concerning the transformation French government and business have undergone, especially in the second half of the twentieth century. Nevertheless, the authors’ different approaches, methods, and findings illuminate common problems these two countries will face on their journey across that mythical bridge to the twenty-first century. Neither of the two authors directly addresses that issue, but both can be read profitably for a Focus on Books
better understanding of what might happen to these two economies on that journey. Very few readers will be able to deal comfortably with both of these books, yet the effort is worthwhile. Perhaps this review will provide the impetus to get the reader started, for both books are outstanding works by younger scholars who deserve to be heard. Vivien Schmidt addresses the changes that have taken place in the French economy and its relations to the state since the ascent of Frarqois Mitterrand to the presidency in 1981. She does this within an analytic framework of state-society relationships in their various forms: pluralist (United States), corporatist (Germany), and state-centered (France). For the rest of the study, the emphasis is on statecentered or statist policy-making in France. In Part II, Schmidt provides a detailed historical overview of the stateeconomy patterns since 1981. This is followed in Part III by an examination of the policy process in government ministries and their relation to the European Union (EU) and to industry. Part IV reviews the performance of major groups of players in government and industry, focusing on the persistent pattern of elite domination in the state, the society, and the economy. The final section, Part V, evaluates the changes that have occurred in the French economy: efforts to revitalize it, the restructuring of French capitalism, and changes in managerial practice and recruitment. Whatever expectations Schmidt might have harbored for a dramatic and far-reaching transformation of French “statist” patterns, she concludes that the force of the EU and the global economy have created a “crisis” in the French state-economy relationships. 83
So far, however, this has not led to major, far-reaching changes in established historic patterns. If France represents one particular version of the relationships between state and economy-a state-centered approach, as Schmidt calls it-the American model might seem to be the very opposite: a set of arrangements in which economic power is in the ascendancy. This would seem to be particularly true in the late twentieth century, when the global march of the American market-driven model seems to encounter little resistance. Yet. as Scott Bowman demonstrates convincingly, that global dominance will be shaped “in the image of the corporation” (p. 304). If we pay proper attention to Bowman’s arguments, laid out in careful detail and resting on a massive foundation in the appropriate sources (113 pages of notes, bihliography, and cases), we will be better prepared to cross the bridge into the twenty-first century than we would be from any other source. In successive chapters, Bowman reviews the rise of the modern corporation, explores the interaction of American liberalism with the concept of the corporation. traces the consolidation of corporate power as reflected in legai theory, and demonstrates the impact of managerial theory on corporate power. On the hasis of this evidence, he concludes that in the corporation, politics and economics cease to be separate realms, thereby revalidating the analysis of A.A. Berle half a century ago: that to study and understand the functioning of the modern corporation, economics and politics must be joined. Bowman has done just that, and most successfully. Schmidt and Bowman provide us with contrasting yet complementary perspectives on worldwide economic trends. Bowman may well be closer to the central feature of that economy: the role of the corporation in the spread of the market-driven economy d la Americaine. But Schmidt’s careful dissection of state-economy patterns provides a better guide to these relationships in Europe, Asia, and the states of the former Soviet Union. Neither author provides much of a guide to African politico-economic patterns. Still, readers will be well equipped to
84
understand the cross-cutting patterns of economy and polity in much of the industrialized world.
Scott R. Bowman, The Modern Corporation and American Political Thought. li?hxvWy Park. PA: i%e Pen n+ua nia State Un iL!eM[y Press, 1996. 4.36&D.
Viuien A. Schmidt, From State to Market? The Transformation of French Business and Government. Cam bridge: Cum hrid&e Uniuersi(y Press, 2996. 476~~.
Changing Focus By Alecia Swasy TBe reuieuseer,Robert L). Gulbro, is u professsol-of munugemeut tat the School qfBusiness, Athens St&e College, Athens. Alabama. We all grew up amid companies and products that had become so pervasive their names became synonymo~is with those of a similar nature. Many brand names went hand-in-glove with certain activities. When one thinks of gelatin, one thinks Jell-O; when one thinks of oatmeal, Quaker Oats comes to mind; think of photography and the name Kodak follows. Kodak w&s once entrenched in our lives as the company for cameras, film, and picture development. By the 1()8Os, however, Kodak was in trouble. Facing serious competition in the film business, all of its attempts to diversify into new product areas to help bring in more revenue only created more problems. It began making changes, first in businesses, then in its CEOs. To undo all the chaos, it tried to downsize, modernize, reengineer, and reinvent itself: it spun off activities it could not manage. In the past 12 years it has gone through more strategic tmnsformations than almost any other firm, but the changes have provided only limited results and few improvements. Alecia Swasy does an excellent job of chronicling these changes and
providing a scenario of what to expect in the future. Her book is rich in its detail of the problems at Kodak and their causes. It should be of interest to history students, photography buffs, or anyone concerned with organizational management. With its sad story of how not to run a corporation. it is particularly good reading for a course on the dos and don’ts of strategic Inanagement. Swasy tells a classic tale of how to ruin a good company. Kodak had always been strictly in the photography business until management “changed that focus“ and tried to find a new direction. Unfortunately, the focus bccame fuzzy and employees no longer had a clear picture of where the company was going. As the direction continued to change, good employees departed and the productivity of others declined. Poor decision making at the top spread dissension. indecision, and shoddy Itlan~l~~rnent tllr~)u~ho~it the firm. The book is separated into three parts. Part I discusses the events leading to Kodak‘s problems from an almost first-person perspective. Part II points out the gross errors made by top management in attempting to improve a deteriorating sitLI~lti(~n. Part III finds hope amid the despair of a good company in a dire situation. One chapter in the book is devoted to the Eastman Chemical Company in Tennessee and its relationship to Kodak before and after the chemical division was spun off as a separate corporation. The book is worth reading just for that chapter alone, with its vivid exampie of how the parent company should have been run-indeed, how any firm needs to be run. If only the parent company had been able to learn from this subsidiary, then many of Kodak’s problems of the 1980s ancl ’90s could have been avoided. Perhaps all is not lost for Kodak. By providing a clear direction, the new CEO may have put the corporation back on track to survival. Good management is needed for any company to succeed and survive, but particularly in these modern, fast-changing times.
Reviews of currentbooks discussing subjects on the horizon of business activities, particularly those on controversial issues being encountered by both practitioners and teachers, will be considered for publication. Manuscript guidelines are available upon request.
The
Modern
Corporation and American
Political
Thought By Scott R. Bowman
and
From State to Market? The Transformation of French Business and Government By Vivien A. Schmidt lhe reviewer, Alfred LNamant, is a professor of political science at Indiana University, Bloomington, Indiana.
For several reasons, the two books under review would seem to be a poorly matched pair. They deal with two countries widely differing in size, history, and people, and with greatly contrasting economic systems and political ideologies. In an even sharper contrast, Scott Bowman examines the place of the modern corporation in the history of U.S. political thought, whereas Vivien Schmidt focuses on the empirical evidence concerning the transformation French government and business have undergone, especially in the second half of the twentieth century. Nevertheless, the authors’ different approaches, methods, and findings illuminate common problems these two countries will face on their journey across that mythical bridge to the twenty-first century. Neither of the two authors directly addresses that issue, but both can be read profitably for a Focus on Books
better understanding of what might happen to these two economies on that journey. Very few readers will be able to deal comfortably with both of these books, yet the effort is worthwhile. Perhaps this review will provide the impetus to get the reader started, for both books are outstanding works by younger scholars who deserve to be heard. Vivien Schmidt addresses the changes that have taken place in the French economy and its relations to the state since the ascent of Frarqois Mitterrand to the presidency in 1981. She does this within an analytic framework of state-society relationships in their various forms: pluralist (United States), corporatist (Germany), and state-centered (France). For the rest of the study, the emphasis is on statecentered or statist policy-making in France. In Part II, Schmidt provides a detailed historical overview of the stateeconomy patterns since 1981. This is followed in Part III by an examination of the policy process in government ministries and their relation to the European Union (EU) and to industry. Part IV reviews the performance of major groups of players in government and industry, focusing on the persistent pattern of elite domination in the state, the society, and the economy. The final section, Part V, evaluates the changes that have occurred in the French economy: efforts to revitalize it, the restructuring of French capitalism, and changes in managerial practice and recruitment. Whatever expectations Schmidt might have harbored for a dramatic and far-reaching transformation of French “statist” patterns, she concludes that the force of the EU and the global economy have created a “crisis” in the French state-economy relationships. 83
So far, however, this has not led to major, far-reaching changes in established historic patterns. If France represents one particular version of the relationships between state and economy-a state-centered approach, as Schmidt calls it-the American model might seem to be the very opposite: a set of arrangements in which economic power is in the ascendancy. This would seem to be particularly true in the late twentieth century, when the global march of the American market-driven model seems to encounter little resistance. Yet. as Scott Bowman demonstrates convincingly, that global dominance will be shaped “in the image of the corporation” (p. 304). If we pay proper attention to Bowman’s arguments, laid out in careful detail and resting on a massive foundation in the appropriate sources (113 pages of notes, bihliography, and cases), we will be better prepared to cross the bridge into the twenty-first century than we would be from any other source. In successive chapters, Bowman reviews the rise of the modern corporation, explores the interaction of American liberalism with the concept of the corporation. traces the consolidation of corporate power as reflected in legai theory, and demonstrates the impact of managerial theory on corporate power. On the hasis of this evidence, he concludes that in the corporation, politics and economics cease to be separate realms, thereby revalidating the analysis of A.A. Berle half a century ago: that to study and understand the functioning of the modern corporation, economics and politics must be joined. Bowman has done just that, and most successfully. Schmidt and Bowman provide us with contrasting yet complementary perspectives on worldwide economic trends. Bowman may well be closer to the central feature of that economy: the role of the corporation in the spread of the market-driven economy d la Americaine. But Schmidt’s careful dissection of state-economy patterns provides a better guide to these relationships in Europe, Asia, and the states of the former Soviet Union. Neither author provides much of a guide to African politico-economic patterns. Still, readers will be well equipped to
84
understand the cross-cutting patterns of economy and polity in much of the industrialized world.
Scott R. Bowman, The Modern Corporation and American Political Thought. li?hxvWy Park. PA: i%e Pen n+ua nia State Un iL!eM[y Press, 1996. 4.36&D.
Viuien A. Schmidt, From State to Market? The Transformation of French Business and Government. Cam bridge: Cum hrid&e Uniuersi(y Press, 2996. 476~~.
Changing Focus By Alecia Swasy TBe reuieuseer,Robert L). Gulbro, is u professsol-of munugemeut tat the School qfBusiness, Athens St&e College, Athens. Alabama. We all grew up amid companies and products that had become so pervasive their names became synonymo~is with those of a similar nature. Many brand names went hand-in-glove with certain activities. When one thinks of gelatin, one thinks Jell-O; when one thinks of oatmeal, Quaker Oats comes to mind; think of photography and the name Kodak follows. Kodak w&s once entrenched in our lives as the company for cameras, film, and picture development. By the 1()8Os, however, Kodak was in trouble. Facing serious competition in the film business, all of its attempts to diversify into new product areas to help bring in more revenue only created more problems. It began making changes, first in businesses, then in its CEOs. To undo all the chaos, it tried to downsize, modernize, reengineer, and reinvent itself: it spun off activities it could not manage. In the past 12 years it has gone through more strategic tmnsformations than almost any other firm, but the changes have provided only limited results and few improvements. Alecia Swasy does an excellent job of chronicling these changes and
providing a scenario of what to expect in the future. Her book is rich in its detail of the problems at Kodak and their causes. It should be of interest to history students, photography buffs, or anyone concerned with organizational management. With its sad story of how not to run a corporation. it is particularly good reading for a course on the dos and don’ts of strategic Inanagement. Swasy tells a classic tale of how to ruin a good company. Kodak had always been strictly in the photography business until management “changed that focus“ and tried to find a new direction. Unfortunately, the focus bccame fuzzy and employees no longer had a clear picture of where the company was going. As the direction continued to change, good employees departed and the productivity of others declined. Poor decision making at the top spread dissension. indecision, and shoddy Itlan~l~~rnent tllr~)u~ho~it the firm. The book is separated into three parts. Part I discusses the events leading to Kodak‘s problems from an almost first-person perspective. Part II points out the gross errors made by top management in attempting to improve a deteriorating sitLI~lti(~n. Part III finds hope amid the despair of a good company in a dire situation. One chapter in the book is devoted to the Eastman Chemical Company in Tennessee and its relationship to Kodak before and after the chemical division was spun off as a separate corporation. The book is worth reading just for that chapter alone, with its vivid exampie of how the parent company should have been run-indeed, how any firm needs to be run. If only the parent company had been able to learn from this subsidiary, then many of Kodak’s problems of the 1980s ancl ’90s could have been avoided. Perhaps all is not lost for Kodak. By providing a clear direction, the new CEO may have put the corporation back on track to survival. Good management is needed for any company to succeed and survive, but particularly in these modern, fast-changing times.