To maintain and continue a high volume of flow demanded organizational innovation. It would be achieved only by creating an administrative hierarchy … - Alfred D. Chandler Jr.

In the 1850s and 18605 the modern commodity dealer who purchased directly from the farmer and sold directly to the processor took over the marketing and distribution of agricultural products. In the same years the full-line, full-service wholesaler began to market most standardized consumer goods. Then in the 1 870s and 188os the modern mass retailer — the department store, the mail-order house, and the chain store — started to make inroads on the wholesaler's markets.

Increase on productivity and decrease in unit costs (often identified with economies of scale) resulted far more from the increases in the volume and velocity of throughput then from a growth in the size of the factory and plant.

Multi-unit business enterprise replaced small traditional enterprise when administrative coordination permitted greater productivity, lower costs, and higher profits than coordination by market mechanisms.