The Extent Can Chandlers Model of Large-Scale, Integrated Managerial Enterprise Explains the Long-Term Competitiveness of Leading Economies - Coursework Example

The extent can Chandler’s model of large-scale, integrated managerial enterprise explains the long-term competitiveness of leading economies. By of Student] Management [Name of University] [Date] Table of Contents Table of Contents 2 Table figures and Graphs 2 Introduction of Chandler’s Model 3 Implication of large scale in an economy 3 Aspects of the Three Faces of Capitalism Model 4 Textile industry in the US, UK and Germany 4 Textile Industry in China and Japan 6 Managerial Enterprise and long-term competitiveness 7 Structure of the business organization 9 Discussion 10 Conclusion 13 List of references 14 Table figures and Graphs Figure 1: Corporate Profits 10 Figure 2: GDP Analysis 11 Figure 3: GDP Graphical analysis 12 Figure 4: Corporate Profits vs. GDP vs. Labor income 13 Introduction of Chandler’s Model Chandlers’ model relative to large scale and scope is a critical component of modern business milieu, particularly on the tenets that work together to see expansion of a business entity and attain the overall competitive edge in the both the national and international market. This essay seeks to answer the question “To what extent can Chandler’s model of large-scale, integrated managerial enterprise explain the long-term competitiveness of leading economies?” The extent to which Chandler’s model of large scale dictates long-term competitiveness of leading economies is relatively high due to the foundational aspects attributed to the model. For instance, the aspect of managerial enterprise forms the foremost driver of any firm, industry and economy. In essence, the structure of firms and industries is reflected in the universal structure of a nations’ economy. This follows that the Chandler model’s essentials which gives a definitive direction in terms of competitiveness of leading economies across the globe. Such essentials include culture, technology, structure if organizations and business internetworking among others. The primary weakness of Chandler’s model is the foundational alienation to the US’s experience of the idealistic business milieu; however, this does not limit its application in various economies. Implication of large scale in an economy As reflected in Chandler’s three faces of capitalism model, the aspect of large scale develops from a small firm to a corporation, which Chandler uses to explain his theory of capitalism. The foundation of a corporation as a constructive economic agent is critical in the process of production, since the large scale enterprises are created with a sole objective of reaping from the economies of scale. For instance, the textile industry in the US, UK and Germany began as small firms, however expanded during the early 19th century and the 20th century to large production industries (ALLEN & DONNITHORNE, 1994, p292). It is imperative to note that, in any economy the scale of production acts a measure of the overall output. Success of leading economies such as the US, Great Britain and Germany among others, are greatly influenced by various attributed of Chandlers’ model. These aspects such as culture and choice are deterministic in the sense that, the model cannot work alone if a nation or economy does not have particular trend to follow (BLANCHARD, 1994, p124). This brings us to the aspects of Chandler’s model Aspects of the Three Faces of Capitalism Model The foundational aspects of the three faces of capitalism model that will be discussed in this essay in a bid to highlight the trend in which the leading economies gain from the model to reach both the national and international competitive edge include the following Manufacturing Industrial Managerial enterprise Textile industry in the US, UK and Germany The aspect of manufacturing is the outstanding facilitating factor for large economies across the globe. For instance, the manufacturing enterprises, which began as small firms producing various products in small scale over 150 years ago, today they are big corporation producing millions of products. In addition, these enterprises have created both the internal and external subsidiaries. The question we ask is “how does the aspect of development of a small firm to big manufacturing enterprise helps various leading economies to reach their competitive edge (AQUILANI & ABBATE, 2014, p124). In essence, the period through which a newly founded firm takes to evolve to big manufacturing enterprises helps in understanding how the large economies such as the US have attained long competitiveness. In the US, most of the successful enterprises in the manufacturing sectors date back to the period of agrarian and industrial revolution. This implies that, the nation has been developing with the growth of these firms. With the standard growth of a nation, various aspects related to the manufacturing sector such as the volume of production are considered when measuring the rate of economic growth (DRAZIN, KAZANJIAN & BLYLER, 2008, p467). Essentially, the US, UK and Germany traces back their economic strength to the process of industrial revolution, when they took advantage of the prevailing conducive milieu. However, the aspect of personal capitalism in the UK dragged the pace in which most firms expanded to large corporations (STORZ & MOERKE, 2007, p92). This is because managers managed the firms at a personal level, hence limited benefits attributed to large scale and scope. For instance, the UK’ Lancashire company a specialist in silk fabrics has grown its market share through managerial strategy and product differentiation in terms of modern art and design, which has seen the company expand and make large scale sales and profits. On the other, the Amann & Sohne Company of Germany has successfully become the leading textile manufacturer due to it strategic and management competence. The company enjoys large-scale production and sales of various fabrics both at home and at the international market platform. On a similar note, the Levi and Strauss Co of the US which began as a small private company has grown a large corporation able to serve over 22% of the home market DRAZIN, KAZANJIAN & BLYLER, 2008, p472). These examples ascertain the ability of Chandler’s theory of large scale and scope in helping the leading economies to with stand long-term competitiveness. Textile Industry in China and Japan The industrial revolution is another force behind the long-term competitiveness of the leading economies. During the industrial revolution era, numerous economic powerhouses of the modern world took advantage of the available labor and raw materials such as cotton and clothe for the industries, and developed strong foundations, which have seen them, grow to great and leading economies characterized by large output (BLANCHARD, 1994, p124). It is imperative to note that Chandler’s focus on the attributes that form the basis of his model of three faces of capitalism is critical in offering the practical perspective of the modern economies (ZEITLIN & HERRIGEL, 2000, p251). The essence of industrial revolution is to emphasize the current state of large-scale economies and their continued practice of capitalism that puts them in the competitive edge with other nations. For instance, China and Japan underwent an elaborate extent in developing small textile and cloth industries to big and extensive industries, which produces millions of volume products. Weiqiao Textile Company in China is an example of a small firm, which has tremendously grown in the production, distribution and overall strategic management since its inception. In 2006, the company reached its peak by producing over 880,000tons of yarn, 175, million meters of denim and 0ver 1630 million meters of grey fabric. This production is a significant indication of the incomparable large scale and scope aspects attributed to the Chandler’s theory of the managerial enterprise. On the other hand, the textile industry and companies in Japan dates back to the 1800, when a series of industries rose as small firms and by 1920 they had grown to large corporations. Despite the slow growth of the industry in the country, some industries have embraced the business gradually and today the profits are at the peak due to the aspects of large scale and scope. This has seen companies such as Toray industries, Inc whose sales account for over 30% of the total national sales. This is due to its increased market share, which is attributed to product differentiation (ALVESSON, 2003, p218). The large share market niche and attributed profits match well with the Chandlers’ model. The economies of China and Japan have grown due to the aspect of managerial enterprise, which necessitated apt management skills, which led to large volume of sales and this led to greater profits. For instance, if there are over one million industries in nation such as China, which have achieved the capacity of a corporation, then it implies that the industries put the nation at the level of the industrialized nations. Such nations stand to go a long way in terms of the long-term development of the overall economy (ZEITLIN & HERRIGEL, 2000, p253). It is health for a nation to take time in building strong foundations in a bid to attain the intended long-term competitiveness. Essentially, the Chandler’s model of three faces of capitalism revolves around the basics that define the future strength of a nation. However, it should be noted that, the structure and ability to manage these firms from initialization to the present state of corporation is the most fundamental aspect of the Chandlers’ model. This brings us to the element of management (ALVESSON, 2003, p216). Managerial Enterprise and long-term competitiveness Any business organization has various small elements of structure, which help in forming a big corporation. However, it should be noted that, the aspect of management in such organization is the foremost propelling factor to the growth of the firm. This implies that strength of the managers deter mines the continuity of a firm. In the modern business era, numerous firms or organizations have managed to grow to the level of corporation because of the well-structured management systems (CHANDLER, 1977, p136). The level of productivity of an organization depends entirely on the quality and focus of the management. The sustenance of the top quality management practices in various industries of the 1880s, have seen the leading economies maintain a stiff competition over a long period of time, until today, when the modern business milieu varies with time and other global trends such as type of investments done (HOLCOMB, HOLMES & CONNELLY, 2013, p463). The numerous corporations, which compete effectively with other multinationals, form the foundation of the leading economies. The long-term competitive edge is well sustained amongst the corporations since, each one of them; desires to be the best in terms of production and the quality of management. This kind of scenario that exists amongst the millions of corporations in a nation is reflected in the overall economy. This implies that the more the corporation continues to grow and compete amongst themselves, the more the overall economy continues to grow and compete with other economies (STORZ & MOERKE, 2007, p88). This brings the concept of the Chandler’s model. The force that dictates the market demand and supply of corporations are the same as those dictates demand and supply of a nation. This contributes to a creation of a continuity competitive trend in among the leading economies. It is imperative to note that, the extent in which the Chandler’s model dictates long-term competitiveness of leading economies such as Japan, UK and US is high since, the aspects attributed to this model form the core principles of managing the national economies through the evolution and development of firms into big corporations. (CASTRO, 1996, p180). Chandler’s analysis of corporations forming the foundation of the competitiveness of the leading economies particularly the US is valid and suits other nations since; they share the origin of the modern factors of economy. It is convincing that the national management approaches are intertwined in the large corporations, which form the basis of the leading economies. This is done through the incorporation of diverse and talented individuals from various backgrounds, which reflect nationalism (CHANDLER & DAEMS, 1980, p150). Structure of the business organization The aspect of technology and business internetworking form the basis of the modern business organizations. As chandler argues, a small firm evolves through numerous stages to become a complex business organization, which contributes to the general economy. The process of evolution involves changes in the managerial structure and the overall hierarchy of the business in terms of leadership (HANNAH, 1987, p21). In addition, the modern business structure has the element of economies of scale and scope. This nature of structure is beneficial to entrepreneurs since provides great gains. Furthermore, the aspect of marketing and distributing networks adds value to the organizational structure (JAVALGI, KIM, LUNDSTROM, & WRIGHT, 2006, p848). As Chandler’s claim, the use of internet-supported channels of reaching the clients has helped the big corporations such as Lancashire UK and Amann & Sohne of Germany to maintain their client base and expansion of the market niche. In essence, the business structure attributed to Chandler’s perception and understanding is characterized by sophisticated use of internet in marketing, distribution and selling of products (COOPER, 2010, p26). The foremost advantage of this business structure is that is reflects nationalism and international culture since a large audience of clients from various backgrounds is reached. In the case of Britain, most of its firms such as the Lancashire textile company were relatively smaller compared to those of the US, and this is the reason why Chandler’s argument on the need for expansion of the firms is critical in a bid to earn large-scale returns from the business activities (ALVESSON, 2003, p172). The oligopolistic competition characterized the state of the US market during the 19th century and this trended into the modern business milieu where a series of networks defined the structure of an organization like that of Levi and Strauss Co (MORRIS, WEBB & SINGHAL, 2013, p355). Furthermore, the aspect of organizational innovation as described by Chandler is fundamental in the revolution of management. It is imperative to note that, various corporations have diverse cultural limits and attributed policies and this leaves the corporation’s management team a task to innovate the best managerial strategy which can suit the organizational structure and in return earns the corporation better benefits in large scale (RUBIO & ARAGÓN, 2009, p 173). For instance, most of the American textile and apparel corporations such as the Levi Strauss & Co between 1840 and 1920 transformed from small firms characterized by a centralized system of organizational structure to a multi-centralized system of organization governance and operations (HECKER & GANTER, 2013, p26). The graph below confirms how the corporations’ profits have transformed the US economy since 1990-2014. This is an indication that the Chandler’s model relative to large scale and scope represents the foundation of the modern economy. Figure 1: Corporate Profits Source: https://www.google.com/search?q=Federal+reserve&biw=1366&bih=657&source=lnms&tbm=isch&sa=X&ei=w7oCVdW_AeOU7Qa6-YDgCA&ved=0CAcQ_AUoAg#tbm=isch&q=Federal+reserve+and+economics+graphs+and+corporate+profit Discussion The aspect of personal capitalism and long-term competitiveness attributed to the Chandlers’ model is a foremost element of the modern business structure. Capitalism among the corporations enhances large output and takes advantage of Chandler’s attributes of scale and scope (BLANCHARD, 1994, p126). This has seen various textile firms in the US, China, Germany, UK and Japan grow to big corporations, which define the state of economy of the nation and the globe at large. For instance, China has expanded it textile industries to African market in nations such as Kenya and Nigeria among others. It is true that the Chandler’s model of large-scale, integrated managerial enterprise explain the long-term competitiveness of leading economies as indicated in their GDP. Consider the following chart and graph of the GDP of the leading economies in the world (BELKHAMZA & WAFA, 2012, p219). The graph and the detailed figures will help in understanding the contributions and extent in which Chandlers’ model helps in sustaining long-term competitiveness. Table Nation GDP United States 16, 768, 050 China 9,669, 124 Japan 4,898,530 Germany 3, 635,959 UK 2,523,216 Figure 2: GDP Analysis Graph Figure 3: GDP Graphical analysis From the graph above, the leading economies listed with respective GDPs represents Chandlers’ assertion that large scale and scope together with managerial enterprise serve well in sustaining long-term competitiveness (JAKOBS, 2013, p69). The aspect of organizational structure plays a fundamental role in ensuring that the corporations compete effectively in terms of production volume and attributed quality (DRAZIN, KAZANJIAN & BLYLER, 2008, p471). In essence, Chandlers’ model is a key indicator on how, the firms evolved over numerous years to big corporations which embrace modern ways of doing business. The model is critical in highlighting the complex organizational structure practiced by various corporations in diverse nations. In essence, the model succeeds to bring the diverse organizational management and leadership approaches to one uniform approach that bears both national and international attributes, which are intertwined with the use of technological applications to market, distribute products (AQUILANI & ABBATE, 2014, p125).This has seen client base expansion and consequent increase in sales. The aspect that results from the economy of scale and scope relative to the Chandler’s model is the extent of labor in the industry sector and the economy at large. This study gives a graphical insight on the state of the US’s large-scale scope relative to the GDP since 2007. Figure 4: Corporate Profits vs. GDP vs. Labor income Source: http://www.theatlantic.com/business/archive/2013/03/corporate-profits-are-eating-the-economy/273687/ Conclusion The Chandler’s model of large-scale, integrated managerial enterprise is fundamental in sustaining long term competitiveness among the leading economies such as the US, UK, Japan, Germany and China. This is because of the ability to integrate the modern organizational and structural hierarchies of corporations in such manner that the economy benefits from the large scale and scope. This goes a long way to long-term competitiveness sustenance. The large volume of production, which is attributed to the apt structural management, supports this trend. In addition, technology in modern business has created a platform in which businesses have networked with each other in a bid to hasten transactions. In essence, technology has revolutionized and digitalized the business activities. List of references ALLEN, G. C., & DONNITHORNE, A. (1954). Western enterprise in Far Eastern economic development, China and Japan. London, Allen & Unwin. p. 292-301 ALVESSON, M. (2003). Studying management critically. London [u.a.], SAGE. p170-177 AQUILANI, B., & ABBATE, T. (2014). Open Innovation through Customers. p123-127 BELKHAMZA, Z., & WAFA, S. A. (2012). Measuring organization information systems success: new technologies and practices. Hershey, PA, Business Science Reference. p216-220 BLANCHARD, F. S. (1944). The textile industries of China and Japan; post-war opportunities and problems for America. 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