the early days of capitalism, entrepreneurs followed their lead by sharing their
investments, customers, production, and profits with relatives. By the nineteenth
century, entrepreneurs were putting their relatives into most of the managerial
positions in their companies. John D. Rockefeller (1839–1937) got his start in the
oil business in partnership with two nonrelatives, but eventually he bought them
out and handed the reigns of Standard Oil over to his son and grandsons. When
they distributed stock only to family members as well, they could create huge
entrepreneurial dynasties but still keep it all in the family.Managerial Corporations.As companies grew, there were not enough qualified
family members available to fill all of the necessary positions, or children and
grandchildren didn’t want to participate in the family business, so entrepreneurs
began to hire outside managers. Eventually outsiders displaced family members in
almost all managerial positions. The owners sold shares in the company’s assets
(stocks) to strangers who sought to share also in the company’s profits, and the
company became an entity separate from the family, just as work separated from
home early in the Industrial Revolution.
Through most of the twentieth century, the corporate world has been the domain
of a new relationship, different family and friends. Co-workers come together
not because of kinship ties, nor because they like each other (they may, or they may
not), but solely in the interest of personal and corporate profit. Corporations have
developed their own culture, distinct from social worlds of family and friends, with
their own procedures and practices, stated and unstated norms, values, goals, and
vocabulary.
Managerial corporations were larger, more versatile and stronger than family run
businesses, and more stable as well—as anyone who has ever tried to work with a
family member can tell you. On the other hand, the larger and more impersonal forces
of the corporation spelled the end of the workplace as an extension of family life.Institutional Corporations.During the last half of the twentieth century,
corporations began to hold shares in othercorporations. The same
people would serve on boards of directors of several companies at once,
until many corporations were interconnected through a small network
of power players. Their decision-making practices changed because
they were concerned not only with their own company but with all of
the companies in which they had a stake. Competition changed to
cooperation in the pursuit of profits. The result was a maze of major,
minor, and subsidiary corporations, connected not through legal
documents but through boardroom small talk, golf games, and
handshakes.
The networks of corporations began acting less like businesses and
more like enterprise webs—central cores that link an array of business
interests and continuously contract with similar webs all over the world
(Chandler and Mazlish, 2005).Multinational Corporations
Some corporations remain centered in the United States, with overseas offices and pro-
duction plants clearly dependent parts of the central operation. But most, especially
the largest, operate globally; they are called transnational or multinational corpora-
tions,because they are no longer clearly located anywhere. Instead of a “home office,”
they operate through a network of offices all over the world. Even employees who are432 CHAPTER 13ECONOMY AND WORK
Among the largest of the megacorporations,
AOL Time Warner has 84,000 employees and
received revenue of $10.5 billion in the first
quarter of 2005 alone. Chances are that you
conduct some business with one of its
companies several times a day, including
HBO, New Line Cinema, DC Comics, CNN,
Castle Rock Productions, Warner Brothers
Records, the WB TV station, Sports
Illustrated, the Atlanta Braves, Cartoon
Network, and People.Didyouknow