Proprietors and managers: structure and technique in large British enterprise 1890 to 1939

The model of the managerial modern business enterprise set out by A D Chandler defines a specific organisational structure and specific techniques of corporate control which are presented as the most effective form of governance for large enterprise. It is generally accepted, however, that this form of governance remained largely unadopted by large UK enterprise before World War Two. This thesis offers an explanation based on the particular role and function of directors in UK firms.

Part One of the thesis examines the structure and control technique of large UK enterprise before World War One and the theory of the firm that underpinned them. It is shown that the favoured form of joint stock company structure, here called 'proprietorial', was the consequence of the perceived role of company directors as shareholders' representatives rather than managers of the business. Much flowed from this. The legitimation of directors powers through property rights impelled them to retain centralised control despite their customary part-time status. This restricted the growth of top management, fragmented management and business professions into narrow departmental structures and restricted the development of control techniques. Under these circumstances the development of firms of the Chandler type was unlikely.

Part Two of the thesis examines four case studies of large UK enterprise in the inter-war years: ICI, Unilever, the London Midland and Scottish Railway and Austin Motors. They have been selected because by sector, leadership or progressive repute they can be taken as representative of UK enterprises most likely to have evolved towards the Chandler model. It is shown, however, that the legacy of UK proprietorial governance was powerful enough to prevent all four case studies - and by implication all UK enterprise - establishing the Chandler structure before World War Two.