Joseph R. Blasi and Douglas L. Kruse
Worker ownership plays a significant role in the US economy today. This worker ownership takes on different forms. A large proportion of the US population (close to a fifth) owns stock in the company where they work. Meaningful worker holdings are ubiquitous in high-technology companies such as Google in the Internet area, Microsoft in the software area, Gilead Sciences in biotechnology, and Qualcomm in mobile technology. The most intensive sectors of worker ownership in the US are about 10,000 companies with about 15 million workers with Employee Stock Ownership Plans, where about 4,000 of the firms are majority or 100 per cent worker-owned, and a compact but vibrant and growing sector of about 300 worker co-operatives with about 6,000 members. Much of this chapter is based on our book, The Citizen’s Share, with economist Richard B. Freeman (Blasi, Freeman, and Kruse, 2015: 57–122).
This article examines the contributions of business historians to the analysis of comparative financial systems. It begins with the responses of historical research to questions raised by economists. The article then goes on to highlight new questions raised by the work of business historians themselves. It gives a short presentation of the debates among economists. Furthermore, the article gives a detailed account of five topics in an historical perspective: the role of firms' self-financing, the role of external finance and the structure of its components, the systemic character of cross-national variations, the historical origins of national financial systems, and the consequences of these differences for economic performances. Finally, the article presents a short concluding section that considers the problem of convergence.
An innovative enterprise develops productive resources to differentiate itself from its rivals, and utilizes the productive resources which it has developed to generate the higher-quality, lower-cost products that are the source of its competitive advantage. Government investments in education and research form indispensable foundations for business investments in innovation. Governments may also seek to ensure that the outcome of innovative enterprise is indeed economic development. This article presents a summary of the “historical experience” that is deemed to be relevant to a theory of innovative enterprise. Given space constraints, it is confined, historically and comparatively, to the cases of Japan and the United States. In conclusion, the article indicates the importance of a theory of innovative enterprise for understanding the role of the state in economic development.
The strategy of most major business firms has to take into consideration cartels. This article discusses how firms can expect to behave inside cartels (firms as unitary actors), and how cartels altered corporate strategy and organizational development (decision making and internal processes). It offers an array of different cartel types that blur the distinction between legitimate cooperation and illegitimate collusion. It is actually difficult to decide when a cartel is a cartel and what cartel success means, let alone if it acts inefficiently or destructively. The article argues that the voluminous scale and scope of cartels before 1939, together with lingering cartelization after 1945 in Europe and Japan, means that any analysis of entrepreneurship, corporate strategy, and organization, as well as national economic development, must incorporate the impact of cartels. It also discusses the impact of cartels on economic and corporate development.
This article begins by outlining the historical evolution of corporate-governance systems in five major countries: the United States, Britain, Germany, France, and Japan. It then examines the major causal arguments advanced to account for diachronic variations within the country cases as well as synchronic variations between them. The article also highlights some empirically significant phenomena obscured by the framework of the current debate and suggests some ways in which their reintegration may provide greater purchase on the problems of transformation and recomposition thrown up by the debate itself. It discusses some insights of an older historical literature on corporate governance. Finally, the article concludes that the entire contemporary debate could benefit from more careful archival scholarship on the development of corporate governance regimes across the major countries.
This article examines the relationship between the creative industries, culture, and development. It characterizes the debate in two parts: development debates in relation to the creative industries; and the ideas underpinning them, including that of culture. The first, which is termed culture in development, is characterized as being shaped by instrumental and idealist motivations. The second, cultures of development, draws upon a concern with the diverse ways in which culture is produced and consumed. The article finds in favour of the latter view for two reasons: first, cultural production, including that of creative products, has changed in its scale and organization and policy needs to respond to this; second, that in absolute terms the creative industries play a more significant role in both the social and economic life of nation states: in short they have moved from the periphery to the mainstream. It is concluded that more investigation is needed of the embedding of social, cultural and economic of culture in places; and, local capacity building in the context of global cultural value chains and production networks.
Employer pension plans are the products of the modern industrial economy. They took shape in the nineteenth century and by the end of the 1930s were standard in large government and business organizations. Only after the Second World War, however, and only in a subset of nations, did employer plans become an important component of national retirement systems. In these nations they became major providers of old-age income, especially for middle- and upper-income workers. Whether retirement plans created and maintained by employers maintain this role in the future, however, is far from certain.
Camila Arza and Paul Johnson
This article begins with a brief review of the pattern of public pension development over the century from 1889, and follows this with a discussion of the reasons for expansion. The suceeding section examines in some detail the variation between countries and over time in the structure and purpose of public pension systems, and this is followed by some national case studies that illustrate both the incremental nature of system development, and the importance of the political context in which this development has taken place. The article concludes with a discussion of the role of historical legacy in setting the parameters within which current discussions of public pension reform take place.
Naomi R. Lamoreaux, Daniel M. G. Raff, and Peter Temin
This article emphasizes the uneasy and sometimes tension-filled relationship that has long existed between business history and mainstream economic theorists. Since business history first emerged as a distinct field of research in the early twentieth century, most practitioners have made little use of economics in their work and some have been downright hostile to the idea that economic theory could improve the writing of business history. The development of new bodies of theory in the last several decades, particularly the economics of asymmetric information, transaction-cost economics, and game theory, has changed the situation to a considerable extent. Over the last couple of decades, scholars have used economic theory to forge new links between business history and developments in the other social-science disciplines. They have revisited in illuminating ways topics ranging from early trading companies to modern financial institutions.
Juan Pablo Pardo-Guerra
The UK Coalition Government’s public-sector transformation initiatives produced a growing number of public-service mutuals. Despite this, there is little understanding of the transition experiences of such organizations, and associated processes of organizational change. This chapter describes the case of Rochdale Boroughwide Housing (RBH), an affordable housing provider, and now a dual constituency mutual, jointly owned by staff and tenants. A key characteristic of the change was the need for individuals to craft new self-identities by holding in tension the identity of being a co-owner with that of being a public-service worker or tenant. Smith and Graetz’s (2011) ‘paradox management’ was used to investigate new values arising from the proliferation of dualities. Although the stresses of change were not avoided, the co-owners of RBH created new capabilities with the potential to, not only sustain the organization, but also increase the resilience and innovative capacities of the communities it exists to serve.
Bruce G. Carruthers
This chapter examines the evolution of modern entertainment industries. It reviews ways to conceptualize and quantify the subsequent waves of creative destruction and investigates how sunk costs affected the industry’s evolution through its interaction with variety, market integration, product differentiation and price discrimination. Four tendencies shaped the entertainment industries’ evolution: first, endogenous sunk costs often led to a competitive escalation of production expenditures—‘quality races’—which increased industrial concentration. Second, marginal revenues largely equalled marginal profits, which led to extreme vertical integration through ownership or revenue-sharing contracts, an oversupply of variety, and a dual market structure with high-concept blockbuster products and low-budget niche products. Third, entertainment’s toll good characteristics led to business models optimizing exclusion possibilities in the value chain and to substantial income inequality among creative inputs. Finally, the project-based character of entertainment production implied large within- and between-industry agglomeration benefits and often led to geographical concentration. Dynamic product differentiation allowed various old formats to survive the waves of creative destruction, albeit in much smaller incarnations.