Abstract: Business History and Economic Value Creation: A Discussion of the Problems and Opportunities
Business history, business, and management studies have a curious relationship. They often flirt with one another and even date on occasion, but establishing a long-term relationship (living together or marriage) has eluded them, thwarted somehow by what sometimes seems like irreconcilable differences. Although business practitioners and teachers generally pay lip service to the value of history in creating perspective and enlarging the imaginations of managers and students, business history plays only a minor role in company efforts to create a healthy corporate culture and in the curricula of most business schools—Italy being notable exception. While business historians search for relevance and have begun to employ—for good or ill—more business theory in their work, many, however, do not address the real interests and orientations of their subjects. One glaring absence in our knowledge of what drives business, for example, is reflected in our use of financial data. Businesses are generally run to make profits—or, as expressed in financial literature, to increase the wealth of shareholders—but few business histories discuss economic value creation. This paper will survey recent business history literature to determine the degree to which papers and books integrate financial data about their subjects into their narratives as well as the quality of that data. It will then examine ideally what financial criteria should be used to evaluate performance. Lastly, it will suggest some ways standard financial analysis can be adapted in light of our limits on acquiring sufficient data.