Dear employer, the title of this article reproduced from the book of Alfred Chandler (1918-2007) in 1977, the Spanish version of which has just published the editorial in the collection Belloch Esade Fund. The author, holder of the Chair of Business History at Harvard Business School since 1971, explains how the U.S., the company replaced the modern market mechanisms in coordinating the economic activities and resource allocation and, as in many industrial sectors, the visible hand of management replaced what business that Adam Smith had called the invisible hand of market forces.

The modern enterprise, the embryo of the large corporation today, appears in the period from 1840 to before the First World War, when they take the form of railway companies, emerging companies steamers, urban communication systems The postal, telegraph and telephone, coinciding with the beginning of the conquest of the west, that is, when "the new technology and expanding markets led to the circulation, without historical precedent, a high volume of freight at high speed. " This company, in Chandler, also called management company, as no longer maintained by the owners and became so expert that will lead to wage a new professional class: the executives and middle managers.

During the twentieth century, the highest executive of that new professional class have become a genuine ruling class with its own interests: money (wages), power and social prestige. Usually they live in conflict with shareholders, but in most cases, the interests and conflicts are managed civilitzadament. But there is a minority of those executives who either want the whole pie - even the shareholders - or are willing to do business as necessary because the pie is bigger, because, even sharing it , win them over. This is the minority who in 2001 led the corporate crisis represented by Enron, which today has brought the shocking financial crisis and usually has more cases involving immorality of the system.

You can try to regulate different aspects of system via codes, rules or laws, but in the end everything depends on how control is exercised from the board of the modern enterprise management and so well described in Chandler. The visible hand asks emphasize efforts to improve corporate governance.

Joseph Albet

Economic Focus, 8-11-2008

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