Technological and Institutional Crossroads: The Life and Times of Adolf A. Berle Jr.

In this paper, I examine the life and times of Adolf A. Berle Jr., perhaps the most influential scholar in the field of corporate governance. Specifically, I examine his contribution in light of the technological and institutional changes that occurred in the late nineteenth century—changes that were germane to his thinking and understanding of corporate governance. I argue that, despite his perspicacity, he failed to appreciate the changing role of corporate officers—that is, from that of fiduciary agent to that of visionary, founder, and essential element in corporate success. Put differently, in the early twentieth century, the key asset in the large, modern corporation was its officers’ ability to manage and control several large-scale, vertically integrated lines of business. This paper will show that this was reflected in the composition of the Board in the post-WWII period where officers dominated and in corporate control in general

Managers, Learning And The Multinational Firm: Theory And Evidence

This thesis examines the question of managerial/organizational advantages as a cause of foreign direct investment (FDI) and thus as the basis of multinational enterprises (MNE\u27s). Three approaches to this question are taken: historical, analytical, and empirical. Historically, managerial/organizational advantages as a cause of MNE\u27s is traced back to the early work of Southard and Phelps in the 1930\u27s. Analytically, three models of embodied-in-managers, intangible assets are advanced, of which two are non-strategic. In the strategic model, foreign direct investment is shown to be a dominant strategy when entry by former managers (defectors) is threatened. These models make use of Penrose\u27s notion of managerial constraint. Also, two models of the R & D/advertising MNE are provided.;These models yield a number of predictions which are tested against data on four hundred and fifty U.S. firms, obtained from Standard and Poors\u27, Moody\u27s, and U.S. Department of Commerce. Various measures of managerial/organizational efficiency, R & D, advertising, plant costs and tariffs are constructed, and regressed against measures of firm multinationality. The tests are performed using a general sample and a Canadian and European subsample. The results are encouraging. Measures of managerial/organizational ability are found to have the predicted effect on U.S. foreign direct investment

On the Origins of The Modern Corporation and Private Property

The Modern Corporation and Private Property (MCPP) by Adolf A. Berle Jr. and Gardiner Means, published in 1932, is undisputedly the most influential work ever written in the field of corporate governance. In a nutshell, Berle and Means argued that corporate control had been usurped by a new class of managers, the result of which included (1) shareholder loss of control (a basic property right), (2) questionable corporate objectives and behavior, and (3) the potential breakdown of the market mechanism. In this paper, I examine the origins of MCPP, paying particular attention to the authors’ underlying motives. I argue that shareholder primacy was not the principal motive. Rather, the principal underlying motive was the well-documented growing gap between potential gross domestic product (GDP) and actual GDP in the 1920s, a problem they, like myriad other period writers, attributed to managerial behavior—in short, a breakdown of governance. In this regard, MCPP should be seen as analogous in scope to the period writings of Thorstein Veblen, Paul Douglas, Henry Ford, Edward Filene, Rexford Tugwell, and many others in the 1920s

On the Origins of The Modern Corporation and Private Property

The Modern Corporation and Private Property (MCPP) by Adolf A. Berle Jr. and Gardiner Means, published in 1932, is undisputedly the most influential work ever written in the field of corporate governance. In a nutshell, Berle and Means argued that corporate control had been usurped by a new class of managers, the result of which included (1) shareholder loss of control (a basic property right), (2) questionable corporate objectives and behavior, and (3) the potential breakdown of the market mechanism. In this paper, I examine the origins of MCPP, paying particular attention to the authors’ underlying motives. I argue that shareholder primacy was not the principal motive. Rather, the principal underlying motive was the well-documented growing gap between potential gross domestic product (GDP) and actual GDP in the 1920s, a problem they, like myriad other period writers, attributed to managerial behavior—in short, a breakdown of governance. In this regard, MCPP should be seen as analogous in scope to the period writings of Thorstein Veblen, Paul Douglas, Henry Ford, Edward Filene, Rexford Tugwell, and many others in the 1920s

Technological and Institutional Crossroads: The Life and Times of Adolf A. Berle Jr.

In this paper, I examine the life and times of Adolf A. Berle Jr., perhaps the most influential scholar in the field of corporate governance. Specifically, I examine his contribution in light of the technological and institutional changes that occurred in the late nineteenth century—changes that were germane to his thinking and understanding of corporate governance. I argue that, despite his perspicacity, he failed to appreciate the changing role of corporate officers—that is, from that of fiduciary agent to that of visionary, founder, and essential element in corporate success. Put differently, in the early twentieth century, the key asset in the large, modern corporation was its officers’ ability to manage and control several large-scale, vertically integrated lines of business. This paper will show that this was reflected in the composition of the Board in the post-WWII period where officers dominated and in corporate control in general