ABSTRACT
The heartland of the model of the managerial enterprise, and its associated theory of industrial society, is the USA. It was there that Berle and Means undertook their classic study, and it is there that the debate has continued to rage in both the academic and the political world. If the arguments of this theory have any application, they should certainly apply to corporate development in America. The size of the American economy and the rapid growth of massive enterprises operating on a national scale created a need to mobilize capital from outside the immediate circle of the entrepreneurs who founded the enterprises. Joint stock organization was the basis for the expansion of American capital within the American economy itself and then in the international arena. Indeed, it was reflections such as this that led Berle and Means to carry out their study of the modern corporation. In Britain the formation of ‘big business’ was somewhat slower, and the smaller size of the British economy meant that founding entrepreneurs and their heirs came under less pressure to dilute their controlling shareholdings. Britain’s pre-eminence as the ‘workshop of the world’ was achieved on the basis of small entrepreneurial firms which had not taken the step of joint stock organization. The growth of American competition was a major factor in forging these enterprises into larger units, and British capital was increasingly subject to the same pressure to mobilize capital from a mass of individual shareholders. Britain and the USA must, therefore, constitute the testing grounds for the theory of industrial society and any alternatives which might be proposed. The relationship between share-ownership and strategic control in these societies is central to an evaluation of the theories outlined in the previous chapters.
