ABSTRACT
This chapter explores the extent to which ‘insider’ recruitment extended beyond family firms and represented a mechanism for building trust and ensuring continuity and stability in firms through internal networks. In the early stages of industrialization, a hazardous business environment and limited, sometimes imperfect business arrangements, have meant that family and community based networks have been an ideal interface between the market and firms. The understanding of usually informal networks is, therefore, vital to the appreciation of interfirm relationships and to the functioning of product and factor markets. The transition from predominantly personal to managerial capitalism was relatively rapid in Britain. Certainly there were examples of multidivisional enterprises in the interwar period. However, the combined pressures of changing income distribution, patterns of government demand, intensified international competition, growing foreign direct investment in Britain, the emulation of the United States and technology contributed to a sharp rise in the level of business concentration after the Second World War.
