CHAPTER TWO

CORPORATE STRATEGY AND STRUCTURE HISTORICAL PERSPECTIVE

THE PROTOTYPICAL ORGANIZATION, at the dawn of the Industrial Revolution, was Adam Smith’s pin factory, a small, focused enterprise producing a narrow range of products for its local customers. The organization structure of Smith’s pin factory was simple: an owner-entrepreneur with perhaps a supervisor and several hired workers. The owner-manager ordered materials, hired and paid the employees, supervised production, and performed marketing, sales, billing, and cash collections.

The Second Industrial Revolution, starting in the middle of the nineteenth century, saw the growth of much more complex capital-intensive industries, such as primary and fabricated metals, chemicals, ...

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