------------ EH.NET BOOK REVIEW --------------
Published by EH.NET (January 2007)

Alfred D. Chandler, _Shaping the Industrial Century: The Remarkable 
Story of the Evolution of the Modern Chemical and Pharmaceutical 
Industries_. Cambridge, MA: Harvard University Press, 2005. viii + 
366 pp. $30 (cloth), ISBN: 0-674-01720-X.

Reviewed for EH.NET by Kyle Bruce, Economics and Strategy Group, 
Aston Business School.


As with much if not of all his earlier work (including the companion 
volume _Inventing the Electronic Century_ concerning consumer 
electronics and the PC industry) in this volume, business history 
doyen Chandler utilizes his stock concepts of "strategy and 
structure" and "scale and scope" to "record" (a phrase about which I 
will say more below) the inception and evolution of high-tech 
chemical and pharmaceutical industries and the enduring legacy of key 
players therein, from the end of the nineteenth century to the end of 
the twentieth century. In essence, the relative success or failure of 
American and European companies in these respective industries is 
explained with reference to three central and interrelated themes: 
"barriers to entry," "strategic boundaries," and "limits to growth." 
Successful firms followed definite "paths of learning" whereby first 
movers and close followers created entry barriers to would-be rivals 
by building "integrated learning bases" (or what he has earlier 
referred to as organizational capabilities) which enabled them to 
develop, produce, distribute, and sell in local and then global 
markets. A related key to this ongoing success is that of the 
"virtuous strategy" of reinvestment of retained earnings and growth 
via related diversification, particularly to utilize "dynamic" scale 
and scope economies relating to new learning in launching "next 
generation" products. This is how those firms with staying power more 
or less simultaneously defined their "strategic boundaries" and 
overcome "limits to growth."

The volume is divided into eleven chapters, with chapters 3-6 
reviewing the evolution of the chemical industries (with extensive 
discussion of DuPont, Dow Chemicals, Monsanto, American Cyanamid, 
Union Carbide, and Allied as well as European chemical producers, 
such as Bayer, Farben, and ICI), and chapter 7-10 those in 
pharmaceuticals (with the focus on Merck, Pfizer, Eli Lilly, 
SmithKline, Upjohn, and Glaxo). The first chapter provides a useful 
overview of the distinctly Chandlerian analytical frameworks 
mentioned above, and lays out his familiar methodology, while chapter 
2 provides a summary history of the key players in both the chemical 
and pharmaceutical industries. The final chapter is an excellent 
summary of the key arguments, as well as a comparison of the 
industrial, informational and biotech "revolutions" driving change 
not only in chemicals and pharmaceuticals, but also in consumer 
electronics and computers, thereby linking up the companion volumes.

Notwithstanding some typographical and spelling errors, if one 
subscribes to Chandler's view that the job of the historian is "to 
record when, where, and by who", then there are no significant 
problems with this volume. If, however, one's view of history is more 
diverse and critical, then the major shortcoming of the volume is one 
that similarly afflicted his prior work: the lack of 
socio-institutional context at various levels. For instance, 
insufficient detail is given to wider socio-economic forces shaping 
the respective industries, and also to the significance of the 
context in which companies engage in the types of strategies 
chronicled, not only as regards politico-legal issues of government 
regulation and/or financial support (particularly relevant to 
pharmaceuticals), but also pertaining to organizational-sociological 
issues. In this context, and as per earlier critiques of Chandler, 
the possibility that firms' strategies (and ultimate success) are 
more about mimetic isomorphism and gaining legitimacy than they are 
about long-term growth, is never really explored, but given 
Chandler's analytical lenses are decidedly economics-rather than 
sociology-centric, then this is not at all surprising.

It is also tempting to dismiss Chandler's analysis as "old wine in 
new bottles," as both the frame of reference, and terms and tools, 
seem all too familiar to readers of his earlier work, yet this would 
be myopic and overlook the fact that much of the analysis is 
complementary and builds on his existing ideas. There is much of 
interest to both old and new Chandler readers; the book would be of 
foremost interest to business historians (in general and those 
particularly interested in chemicals, pharma, and biotech in 
particular), strategy scholars and teachers (particularly as regards 
what makes "good" corporate parents and the primacy of strategy over 
structure) and economists (as regards the enduring utility of their 
box of analytical tools). The other attractive feature of the book is 
its organization in that it can just as easily be read in stand-alone 
sections or chapters depending on one's interest without loss of 
meaning; chapter 10 on biotech and chapter 11 comparing and 
contrasting the industrial, informational and biotech "revolutions," 
are cases in point. Above all else, despite its shortcomings, it is 
typically ambitious, broad-brush history, but with a strong and 
sustained thesis that one comes to associate with someone who has 
justifiably been anointed the dean of business history.


Kyle Bruce is a Lecturer in Strategy at Aston Business School whose 
broad research interests traverse institutional theory in the social 
sciences, U.S. business history, and the history of American 
management and economic thought. His most recent paper, concerning 
the contribution to labor economics of workaday, managerial 
practices, is forthcoming in _History of Political Economy_.

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