Organizing America

Charles Perrow is Research Scholar and Professor Emeritus of Sociology at Yale University. Two of his six books are prizewinners: Normal Accidents (Princeton) and The AIDS Disaster. Complex Organizations (McGraw Hill) is in its third edition. He has written seventy articles and book chapters. Perrow has been a visiting professor at the London Graduate School of Business Studies, a fellow at the Center for Advanced Study in the Behavioral Sciences, and a visiting scholar at the Russell Sage Foundation and the Institute for Advanced Study.

American society today is shaped not nearly as much by vast open spaces as it is by vast, bureaucratic organizations. Over half the working population toils away at enterprises with 500 or more employees--up from zero percent in 1800. Is this institutional immensity the logical outcome of technological forces in an all-efficient market, as some have argued? In this book, the first organizational history of nineteenth-century America, Yale sociologist Charles Perrow says no. He shows that there was nothing inevitable about the surge in corporate size and power by century's end. Critics railed against the nationalizing of the economy, against corporations' monopoly powers, political subversion, environmental destruction, and "wage slavery." How did a nation committed to individual freedom, family firms, public goods, and decentralized power become transformed in one century?Bountiful resources, a mass market, and the industrial revolution gave entrepreneurs broad scope. In Europe, the state and the church kept private organizations small and required consideration of the public good. In America, the courts and business-steeped legislators removed regulatory constraints over the century, centralizing industry and privatizing the railroads. Despite resistance, the corporate form became the model for the next century. Bureaucratic structure spread to government and the nonprofits. Writing in the tradition of Max Weber, Perrow concludes that the driving force of our history is not technology, politics, or culture, but large, bureaucratic organizations.Perrow, the author of award-winning books on organizations, employs his witty, trenchant, and graceful style here to maximum effect. Colorful vignettes abound: today's headlines echo past battles for unchecked organizational freedom; socially responsible alternatives that were tried are explored along with the historical contingencies that sent us down one road rather than another. No other book takes the role of organizations in America's development as seriously. The resultant insights presage a new historical genre.

Acknowledgments ix CHAPTER 1: Introduction 1 Some Central Concepts 3 Density and concentration 3 Size and small-firm networks 4 Organizations or capitalism 6 Noneconomic organizations 7 Power 8 Culture and other shapers of society 9 Organizations as the independent variable 10 What Do Organizations Do? 12 What Kind of Organizations? 16 Alternative Theories 17 Conclusion 19 CHAPTER 2: Preparing the Ground 22 Communities, Markets, Hierarchies, and Networks 22 Community 23 The market direction 25 Toward hierarchy and networks 28 The Legal Revolution that Launched Organizations 31 Fear of corporations 33 What organizations need to be able to do 35 Making capitalism corporate 36 Capitalism to Corporate Capitalism 40 Lawyers: "The Shock Troops of Capitalism" 43 CHAPTER 3: Toward Hierarchy: The Mills of Manayunk 48 Getting the Factory Going: The Role of Labor Control 48 The first mill-a workhouse 50 To mechanize or not? 51 Social Consequences 53 Labor Policies and Strikes 58 Organizations and Religion 60 From Working Classes to a Working Class 61 The politics of class 62 Conclusion 63 CHAPTER 4: Toward Hierarchy and Networks 65 Lowell and the Boston Associates 65 Wage dependence and labor control 65 Lowell I: The benign phase 67 Profits and market control 69 Lowell II: The exploitive phase 70 Explaining the First Modern Business 75 Structural constraints 77 The Slater Model 79 Toward Networks with the Philadelphia Model 81 When capital counts 82 Philadelphia's large mills 84 Size and technology 86 Networks of Firms 88 Labor conflict 90 Externalities 90 The Decline of Textile Firms 92 Summary 94 CHAPTER 5: Railroads, the Second Big Business 96 Railroads in France, Britain, and the United States: The Organizational Logic 102 France 104 Britain 108 The importance of the railroads 111 Why Were the Railroads Unregulated and Privatized? 113 The efficiency argument 115 Historical institutionalism 117 Historical institutionalism assessed 122 The neoinstitutionalist account 123 The organization interest account 127 The details 129 Self-interested opposition to the railroads 139 Corruption Observed but Not Interpreted 141 Evidence from the public record, and the outcry 144 Scholars explain corruption 151 Summary and Conclusions 157 CHAPTER 6: The Organizational Imprinting 160 Making the Railroads Work 160 Divisionalization 161 Finance takes charge 162 Inevitable, or a chance path? 165 Contracting out 166 Leadership Style and Worker Welfare 173 Work in general 175 Nationalization and Centralization: The Final Spike 179 Organizational versus political interpretations 180 Where did the money come from? 183 Regionalization versus Nationalization 186 The debate over the ethos 187 A political or an organizational interpretation of the struggle? 192 Was Regionalism Viable? 194 Concentrating Capital and Power 196 The corporate form triumphs 197 Explaining the arrival of the corporate form 201 An organizational agency account 204 Summary and Conclusions 212 CHAPTER 7: Summary and Conclusions 217 Appendix Alternative Theories Where Organizations Are the Dependent Variable 229 Notes 237 Bibliography 243 Index 251