Neil Fligstein Quotes

The leaders of the large firms dominated by the manufacturing conception saw the key problem as low prices. This meant that they were intent on controlling prices by cutting production. But once prices were stabilized, they were cautious about increasing production for fear that prices would again collapse. Since their competitors had roughly equal production capacities and costs, all would lose by too rapid an increase in production.

The key insight of the approach is to consider that social action takes place in arenas, what may be called fields, domains, sectors, or organized social spaces... Fields contain collective actors who try to produce a system of domination in that space. To do so requires the production of a local culture that defines local social relations between actors.

The forms of social organization produced the market, not the reverse... Instead of markets calling forth efficient forms of social organization, political and social interactions produced the structuring of sociologically effective markets.

Initial formation of policy domains and the rules they create affecting property rights, governance structures, and rules of exchange shape the development of new markets because they produce cultural templates that determine how to organize in a given society.

The major reasons for diversification were by this time well established : to employ excess plant capacity, to eliminate seasonal humps, to guard against dependency on one industry, to enter new expanding industries, to supplement existing product lines, to use old products to create new product, and to secure a larger share of business in general.

The marketing director in each department reported directly to the department head and controlled market research and sales. More important, the marketing manager was also responsible for new product development, requesting production schedules, and controlling finished goods inventory.

The firm-as-portfolio model implies both a practice (growth through diversification) and a form (the conglomerate). Unrelated diversification entails buying businesses in industries that are neither potential buyers, suppliers, competitors, or complements to the firm’s current business.

Once in place as control perspectives, they are widely shared ways of reducing complexity of the world. They come into the existence in a piecemeal fashion and are articulated by representatives of the largest, most successful firms. They are propagated by the business press and informal links between organizations and then are supported by those organizations and organizational fields.

[Institutional entrepreneurs must] size up the condition of the organizational field and figure out what kinds of action make sense.

The basic insight of the finance conception was that such a firm could be more tightly controlled by strict accounting. This progression does not imply, however, that one conception of control caused the emergence of its successor. New conceptions of control evolved out of key interactions among firms and between firms and the state.

The experiences of the war changed both Baruch’s and Wilson’s attitude toward the large firm. Following the war their anti-firm rhetoric was replaced with praise for the large firm’s patriotism and contribution to progress.

The power struggle within the firm determines which conception of control will dominate and how that conception will be translated into concrete strategies. The winners of this struggle will push the organization into a certain direction and maintain that direction as long as their strategies bring positive results.

The key argument is that managers and owners in firms search for stable patterns of interaction with their largest competitors. Once stable patterns prove to be both legal and profitable, firms set up organizational fields that tend to produce and reproduce those patterns.

Younger and smaller firms would be more likely to adopt the MDF (Multidivisional Form) than older and larger ones.

I claim that the central goal of managers in the past hundred years has been to make sure their firms survived. To promote survival they proposed various forms of control, both inside and outside the firm. Internally, control was oriented to ensuring that organizational resources were deployed so that top management could be confident that their directives were being executed. Externally, this control was oriented toward establishing stable relations between competitors to promote the survival of their organizations.