Wednesday, April 21, 2010

“I, not Alfred P. Sloan, invented the M-form organization” - Napoléon –

In his celebrated work on the era of the large-scale firm – The Visible Hand (1977) - that I call the “first twentieth century”, the late Alfred D. Chandler attributes a central role to the long time manager of General Motors, Alfred P. Sloan, in the invention of that type of business organization.

But read the following historical description:

“Having taken over from Carnot as the “organizer of victory,” Napoleon used the full power of the police to break such opposition to conscription as still existed. Not only was the imbalance between men and arms soon corrected, but the result was to provide the French state with forces larger than any since Herodotus had Xerxes lead a million and a half men into Greece in 480 BC; however, there was nothing mythical about the Grande armée. Instead of marching in a single block, as had been standard practice from the day of the Greek phalanx to that of Frederick the Great, willy-nilly the French troops had to be spread out over a much wider front in order to live and move. The construction of such fronts both demanded and was made possible by the organization of the forces into corps d’armée. First proposed by the National Convention in 1796, each corps or “body” possessed a permanent commander in the person of a maréchal de France, a title which Napoleon did not invent but to which he gave a new, more precise significance. Each had its own staff and its own proper combination of the three arms (infantry, cavalry, and artillery), as well as its own intelligence, engineering, and logistic services. Each one constituted a miniature army in its own right, one which, as common wisdom went, was capable of performing its mission independently of the rest and of holding out for two or three days even in the face of a superior force attacking it.” (Martin Van Creveld, The Rise and Decline of the State, Cambridge University Press, 1999, p. 246).

This structure is precisely that of the multidivisional firm, the M-form, that has characterized, as Chandler claimed, the rise of the modern giant business, and for the same reasons: the growing number of employees and volume of production of giant firms that accompanied the second industrial revolution.

If, arguably, the East India Company was the forerunner of modern firms, the Grande armée then was the first example of the M-form company.

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