Abstract

"Problems and Remedies at Three Mergers from the Progressive Era"

Sally Clarke, University of Texas at Austin (shamilto@alum.mit.edu)

U.S. mergers dating to the Progressive Era impressed by their size, yet internal difficulties may have slowed efficiency. A core question remains how combinations adapted after merging to become efficient. Alfred Chandler’s answer centered on a “managerial revolution” (the subtitle to The Visible Hand). To broaden this framing, I employ themes from four areas of research: I explore the social work of managers but also owners and financial elites; apply Albert Hirschman’s concepts of exit and voice; recognize local contexts; and examine mentoring. I assess Allis-Chalmers (1901); Corn Products (1902); and National Biscuit (1898), relying on secondary and some primary sources such as antitrust records and data on board directors. Findings are preliminary. I continue to search for archival records but suggest these revisions.
Repairing inefficiency included social changes, such as to those in control. Whereas convention tends to varying degrees to assume congenial relations among top officials, the three mergers suggest otherwise. Disquiet prompted management turnover, saw internal opposition, and caused some owners to metamorphose as competitors. With assistance from financial elites—bondholders in a voting trust, powerful Standard Oil directors, a financier—solutions reworked investments but in addition rearranged governance, attracted better skilled presidents, mentored managers, and mediated among officials. Many actors committed themselves through their local context, such as having ties to a particular city or to Wall Street. Years passed before each consolidation thrived. Note that three case studies are only suggestive. They invite a view that varied actors joined social and economic remedies to make amalgamations big and efficient, but also propose rethinking the concept of efficiency.
Key Words:
Corporate governance; mergers; efficiency; Progressive Era; mentoring; local contexts; organizations