Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

1
...
Explain Britain’s relative economic decline in the context of failure to adopt new
technology/ organisational methods/ hierarchical structures across different areas of
the service sector?
Introduction
Between 1870 and 1914, Britain’s early productivity lead in services was eroded, after rapid catch up from US and
Germany
...

Chandler (1990) believed Britain’s network system to be under threat from a system of high-volume low-margin
business organised on a hierarchical basis
...
However, others point to the fact that British performance
tended to be better in sectors where conditions continued to favour networks rather than hierarchies
...
05% for
UK between 1890-1910 compared to 2
...
Dodgson (2011) is even more pessimistic, showing UK growth is
barely half the above estimate, using different weightings
...
The British rail network was relatively
complete by 1870, increasing much less than US (50% v 374
...
The physical capital lock-in thus prevented the
adoption of best-practice at a time when technological change favoured hierarchical forms of organisation
...
Kinghorn and Nye (1996) note that although Britain’s rail system was extensive, the fragmented
structure of British railways prevented the development of an effective managerial hierarchy needed to achieve
Chandler’s fabled productivity gains
...

Much of the literature argues that Chandlerian forms of management are not the solution here, it much more
fundamentally comes down to a lack of competition
...

McCloskey and Sandberg (1971) argue that poor management persists due to a lack of competitive pressures
...
9% per annum
between 1870 and 1914
...
Economic historian try and interpret this technological
conservatism as ‘entrepreneurial failure’, yet Britain’s merchant marine was very successful in this era
...
In 1872, advantages lay with sail on long voyages
...

Hannah (1982) sees no evidence of entrepreneurial failure here: on short, Mediterranean routes of high value with lots of
coaling stations, the advantage of sailing ships was less and British entrepreneurs adjusted accordingly
...

Boyce (1995) found despite the emergence of large scale shipping lines organised on a hierarchical basis, Britain
continued to dominate in the tramping sector based on a system of networks
...

Pre-WW1 Brit was hub of connections and shipping needs these connections - not a service that can be delivered as
well without them
...
More a case of the changing environment becoming
more orientated to play to US competitive advantages
...
The absence of significant AngloAmerican productivity gaps in international banking signified the continuing suitability of finance to flexible networks,
information intensive industries and highly customisable service products
...

Whilst Chandler’s model of large scale production and hierarchical management reaped significant productivity gains for
the US at this time, international banks had no requirement for rationalised, scientific management; they need flexible,
adaptable and well-though through investment decisions
...
Cassis (1994) paints it as a
‘Marshallian’ district where networks of trust meant information aggregated in London transformed it into a nexus of
knowledge
...
In fact, Jones (1993) emphasises the advantages of this network form
of organisation for overseas banks, going as far to argue that their success was predicated on avoiding the large and
complicated managerial hierarchies as recommended by Chandler
...

Broadberry and Ghosal (2002) concur that these key facets hindered the application of an anonymous, industrialscale approach to finance
...
Hence, failing to adopt Chandlerian structures in international finance before WWI was not
attributable to Britain’s relative economic decline
...

Critics of Chandler’s model, like Wilson (2012) argue that its implication of a universally applicable model of business
organisation is controversial, as its universalising predictions are "not always supported by empirical evidence” as we
have seen
...
as in these other countries
...

To come full-circle - the modern office technology in the British service sector (Broadberry and Ghosal) was unsuited to
large-scale production methods which were not conducive to Britain’s social capabilities, factor costs and market
conditions – and that hierarchical management structures would have been much more welcome in the transport sector
...
Other parts of the service sector, such as railway and largescale liner shipping were more suited to the standardized, high-volume, low-margin business that underpinned the U
...

productivity drive in services and there was potential for productivity gains here, given the Chandlerian model was
implemented correctly

---