Abstract: A Conservative Innovator: Thomas Edison as International Entrepreneur

David Hochfelder and Blaine McCormick

Abstract

We use Edison's efforts to establish electrical power and lighting businesses in England and France in the 1880s to problematize Alfred Chandler's famous dictum that structure follows strategy. Edison's strategy for his international operations had three broad elements. First, Edison regarded technical excellence as paramount to his financial success. His marshalling of an international scientific network and his lavish displays at expositions served to validate the technological superiority of his electrical lighting system. Second, by his own admission Edison wanted to "make money to keep on inventing." As a result, he used most of his profits to finance innovation in new areas rather than to capitalize ongoing endeavors. Third, Edison preferred a governance system in which he could retain personal control of overseas operations through trusted associates, rather than a governance system based on impersonal contractual means. Because of his strategy, Edison was able to develop and commercialize his electrical lighting system, but he was unable to build lasting corporate structures. We conclude by using the example of Edison to discuss more generally the relationship among innovation, commercialization, and firm structure in the late nineteenth century.