The Distinction Between Step Processes and Platforms

What technological and societal factors led to the rise of the large corporation in 20th-century America?

Richard N. Langlois is an economics professor at the University of Connecticut and the author of the book The Corporation and the Twentieth Century: The History of American Business Enterprise. His work examines the economics of organizations, business history, and theories of firm performance and innovation. 

Richard and Greg discuss the rise and fall of the managerial era in American corporations, common misconceptions about antitrust laws, and companies’ influence on the political system. 

*unSILOed Podcast is produced by University FM.*

Episode Quotes:

Why does Schumpeterian innovation work?

47:35: In the real world, you have to learn how to produce things. And that knowledge is private information most of the time. And so, you learn how to make a car a certain way… [48:09] So, if you're always spending your time looking for new ideas, you're not going to get good at the things you're doing, or you can focus on the things that you're doing and get good at them, but then you're going to be bad at looking around…But in the end, I think it's the case that if you get really good at one thing, like operating systems or big office computing systems, just the fact of getting good at that, it's going to make it hard for you to be good at other things, especially at other things that are different from what you're doing because there's a lot of barriers there. 

The threat of antitrust can influence organizational decisions

34:57: The threat of antitrust or other public policies can influence organizational division decisions inside a firm, often in ways that are inefficient or that maybe aren't the best way to do things.

Do big firms control the government?

50:22: Companies are very good at influencing the government when some narrow thing really affects them, like a tariff on something. But influencing the government in some general way—what the results show is that companies don't care. They'll give money to whoever's going to leave them alone.

On considering how exogenous factors influence organizations, not just internal factors.

05:43: We need to think more about the ways in which these exogenous factors influence internal organizations instead of only thinking about organization from an internal point of view. So, how do we organize? How do we manage? How should we structure it? We also want to think about what the external constraints on organizational forms are. It may lead us to create organizational forms that aren't the kinds that we would have chosen in a perfect world.

Show Links:

Recommended Resources:

• Alfred D. Chandler Jr.
• Joseph Schumpeter
• Ronald Coase
• Oliver Williamson
• Sherman Antitrust Act
• The Folklore of Capitalism by Thurman Arnold and Reeve Robert Brenner
• Design Rules, Volume 1: The Power of Modularity by Carliss Baldwin and Kim Clark

Guest Profile:

• Faculty Profile at University of Connecticut
• Richard N. Langlois on LinkedIn

His Work:

• The Corporation and the Twentieth Century: The History of American Business Enterprise 
• Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy 
• Firms, Markets and Economic Change: A dynamic Theory of Business Institutions
• Other Scholarly Articles

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.