The Foundations of Managerial Control in the United States

Abstract

AbstractIn historical perspective, market control over the allocation of US corporate resources stands out as a recent phenomenon, since for most of the twentieth century, salaried managers have exercised control over resource allocation by US corporate enterprises. In this chapter, the lengthy and complex historical process through which the institutional foundations of managerial control emerged in the US corporate economy is discussed. The focusing, in particular, is on the role of the integration of managers as members of business organizations, the diffusion of share ownership, the changing interaction between the stock market and the public corporation, and the transformation of corporate law in facilitating the separation of beneficial ownership of corporate stock from strategic control over the allocation of corporate resources. The main sections of the chapter are: 3.2, The historical foundations of managerial control; 3.3, Managerial control and the Great Depression; 3.4, and New deals, old deals––which discusses changes in corporate governance, workers’ rights and unionism, and defence of the corporate manager's right to manage.