Abstract: Does the Man Make the Railroad or Does the Railroad Make the Man? The Pennsylvania Railroad's Connections to Professional Management and the Failure of the Penn Central, 1920-1970

Albert Churella

Abstract

During the 1910s and 1920s, Pennsylvania Railroad (PRR) executives experienced a managerial crisis, finding it increasingly difficult to hire, train, and promote their replacements. Throughout the nineteenth century, the expanding PRR System offered individuals trained in engineering the opportunity for rapid advancement. After 1900, however, jobs in emerging industries such as automobiles and chemicals offered higher pay and greater chance for promotion. Interstate Commerce Commission rates did not permit sufficiently remunerative salaries. Internal factors were more important, however, as PRR senior executives debated the relative importance for new management hires of a college degree or on-the-job experience. A 1920 decentralization of PRR's management exacerbated this executive crisis, as did PRR managers' growing perception that public demands for greater efficiency constrained salary flexibility. The managers who came of age during this period were poorly prepared to cope with the PRR's decline during the late 1950s and early 1960s when they became senior executives.

BEH On-Line Paper