American Business 1920-2000
I just finished reading "American Business 1920-2000"
Being the first history book that I have read in a long time, I was kind of expecting it to be a dull compendium of facts. Thankfully, it is not like that at all. The author has divided the time period into 5 sections, and for each section he picks a core theme and talks mainly about a few companies around that theme. Each theme is the industry that came of age in that period and had a large impact on american society. Interesting interleaved between the major theme chapters are minor digressions into other interesting topic : women / blacks in business; the financial industry, the chemicals industry etc.
My core takeaways from the book :
1920s - Motor Vehicles and Modern management
- The evolution of the car industry struck me as having a lot of similarity with the computer industry of the 80s-90s. Lots of innovation at the start. Constantly dropping prices. Evolution to a more stable industry. I had not realised the generality of this structure.
- I was impressed with Alfred Sloan's management insight into decentralization. Employee empowerment to the right extent was the key to GM's success. And it would benefit us all to pay more attention to the influence of corporate structure on success.
1930's - P&G
- Brands are important and should be treated as such.
- Consumer research is a powerful tool.
The New Deal and WWII
- Interestingly, the regulation of the financial markets provided by the new deal turned out to be beneficial for the financial markets themselves by making them more accessible. Market forces would not have moved in this direction, because market forces end up taking a short term view.
- Ferdinand Eberstadt's key insight was that it is only the limiting resource in the whole system that needs to be regulated centrally. All the other resources would line up. Similar to Marv Burkett's point that for resource allocation, expenses should be measured in terms of the most constrained resource for the company, which may or may not be money (e.g. it could be number of employees).
RCA
- More of a description of what went wrong than what was done right.
McDonalds
- Franchising is essentially the sale of intellectual property and goodwill (in the form of a brand). I had not realised this so clearly.
Overall
I can't find where I read it in this book, but I found the statistic that, the gap between the rich and the poor has been growing for the last 30 years, after declining for the 50 (70?) before, to be kind of disturbing. I feel that an excessive gap between the rich and the poor is bad in 2 ways. One is that it promotes social unrest if it rises too high (French revolution). Or at least social dissatisfaction because not everyone has every opportunity available to them. Another more subtle effect is that it reduces competition in anything requiring a large investment, which means that society doesn't get the most capable people in those important positions. We can already see that most politicians in the US are people who are already wealthy.
Being the first history book that I have read in a long time, I was kind of expecting it to be a dull compendium of facts. Thankfully, it is not like that at all. The author has divided the time period into 5 sections, and for each section he picks a core theme and talks mainly about a few companies around that theme. Each theme is the industry that came of age in that period and had a large impact on american society. Interesting interleaved between the major theme chapters are minor digressions into other interesting topic : women / blacks in business; the financial industry, the chemicals industry etc.
My core takeaways from the book :
1920s - Motor Vehicles and Modern management
- The evolution of the car industry struck me as having a lot of similarity with the computer industry of the 80s-90s. Lots of innovation at the start. Constantly dropping prices. Evolution to a more stable industry. I had not realised the generality of this structure.
- I was impressed with Alfred Sloan's management insight into decentralization. Employee empowerment to the right extent was the key to GM's success. And it would benefit us all to pay more attention to the influence of corporate structure on success.
1930's - P&G
- Brands are important and should be treated as such.
- Consumer research is a powerful tool.
The New Deal and WWII
- Interestingly, the regulation of the financial markets provided by the new deal turned out to be beneficial for the financial markets themselves by making them more accessible. Market forces would not have moved in this direction, because market forces end up taking a short term view.
- Ferdinand Eberstadt's key insight was that it is only the limiting resource in the whole system that needs to be regulated centrally. All the other resources would line up. Similar to Marv Burkett's point that for resource allocation, expenses should be measured in terms of the most constrained resource for the company, which may or may not be money (e.g. it could be number of employees).
RCA
- More of a description of what went wrong than what was done right.
McDonalds
- Franchising is essentially the sale of intellectual property and goodwill (in the form of a brand). I had not realised this so clearly.
Overall
I can't find where I read it in this book, but I found the statistic that, the gap between the rich and the poor has been growing for the last 30 years, after declining for the 50 (70?) before, to be kind of disturbing. I feel that an excessive gap between the rich and the poor is bad in 2 ways. One is that it promotes social unrest if it rises too high (French revolution). Or at least social dissatisfaction because not everyone has every opportunity available to them. Another more subtle effect is that it reduces competition in anything requiring a large investment, which means that society doesn't get the most capable people in those important positions. We can already see that most politicians in the US are people who are already wealthy.
posted by Sameer Gauria at 10:51 PM
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