Abstract: The Schmalenbach Society and the Dinkelbach School of German Management: Networks of Theory and Practice

Jeffrey Fear

Abstract

Historians of technology have long stressed the importance of networks of knowledge for sustaining national or business innovation. For Germany, this "academic-industrial knowledge network" (Johann Peter Murmann) created positive feedback loops that kept its "national innovation system" and individual business firms on the cutting-edge of technological leadership. Historians have done less well examining networks of knowledge that contributed to the organizational capabilities of firms that allowed them to administer and commercialize these streams of technological innovations. Utilizing private correspondence, business archival material, contemporary management literature, and secondary literature, this paper examines the long-term relationship between the commercial management of the Vereinigte Stahlwerke (VSt) and the University of Cologne, between Heinrich Dinkelbach and Eugen Schmalenbach. Eugen Schmalenbach was Germany's leading theoretician of business economics and accounting. In the 1920s, Büro Dinkelbach introduced cutting-edge management practices partially inspired by Schmalenbach into the operating procedures of the VSt. This virtuous, circular network of people and ideas, the interaction between theory and practice--between the Schmalenbach Society and the Dinkelbach School--created one of the most influential impulses for German business management of the early postwar period. A "school" had evolved around Dinkelbach, which developed into a "genuine training center for future managing directors" for the West German economy.