The Americanisation of European Business

Matthias Kipping, Ove Bjarnar, Matthias Kipping, Ove Bjarnar

• Publisher: Routledge
• Year: 2002
• Print ISBN:
  9780415171915
• eBook ISBN:
  9781134693733
• Topic: Business
• Subtopic: Business General
• Index: Business

This book examines the mechanisms and channels through which American managerial know-how and US management models were transferred to Europe after 1945, as well as the actual influence on European industries, companies and regions in the 1950s and 1960s. It explores the role of the European Productivity Agency, business leaders, US multinationals, regional networks and institutions, as well as the actual transfer process and potential political, cultural and institutional barriers. The final section contains the cases of three European companies which adopted American Management methods to a considerable extent during the 1950s and 1960s.

1

THE MARSHALL PLAN AND THE TRANSFER OF US MANAGEMENT MODELS TO EUROPE

An introductory framework

Ove Bjarnar and Matthias Kipping

Over the last decade, the transfer of management models across national borders has attracted considerable attention both in academic research and from policy makers. This interest was initially triggered by attempts to transfer apparently successful Japanese management practices to the United States and Western Europe.¹ The current transition in Central and Eastern Europe from a centrally planned to a market driven economy provides another example of such a transfer, highlighting both its problems and its crucial importance. In the long run, once foreign advice and funding have ceased, the development of local managerial skills, the establishment of sound industrial relations and, sometimes, the support of local as well as national authorities will determine to a large extent the outcome of the transformation process. But, as recent OECD studies show, public authorities in many Western European countries also place great emphasis on the transfer of technological and managerial know-how. Over the last few years, many governments have established specific programmes to facilitate such a transfer.²

None of these efforts, however, not even those currently under way in the former Eastern bloc, can rival the European Recovery Programme, or ERP, more widely known as the Marshall Plan. On 5 June 1947, US Secretary of State George C.Marshall announced the intention of the United States to help European countries overcome the consequences of the Second World War. In addition to providing immediate relief and funding for reconstruction, the ERP aimed at improving the productivity of European industry through the transfer of American technology and managerial know-how. Because of their unmatched scale and scope as well as the wealth of available information, the Marshall Plan and the productivity drive provide a unique opportunity to study the transfer of management models across national borders in depth.

Our volume will undertake such a study, focusing on the one hand on the role of the different institutions, channels and actors involved in the transfer, and on the other on the resulting changes in different industries, companies and regions. It will highlight the diversity of US management models and, at the same time, the wide range of responses across Western Europe. It will also help to understand the mechanisms of both the transfer process and the translation of these new models into practice. Against this background, the purpose of this introductory chapter is threefold. First, it gives an overview of the current state of research on the Marshall Plan and the productivity drive. Second, it introduces some key concepts which will allow us to identify and compare patterns of Americanisation across a number of cases. Third, it briefly summarises each of the following chapters and their contribution to the overall research question.

A new research perspective

The declared intention of the Marshall Plan was to remedy acute shortages in the participating countries and to provide means for reconstruction which would make Europe eventually independent of US assistance. From the outset, however, these motives were questioned in the context of the beginning of the Cold War, especially when the Soviet Union decided not to participate in the aid programme and forced its satellites to do the same. In April 1948, the remaining Western European countries established the Organisation for European Economic Co-operation, or OEEC, designed to distribute ERP funds and to co-ordinate national plans for reconstruction.

As a consequence, much of the earlier academic discussion concentrated on the political motives and political implications of the Marshall Plan.³ It concerned not only the voluntary, or possibly wanted, exclusion of the Soviet Union, but also the pivotal role of West German reconstruction, which was resented in some of the allied countries. The economic consequences of the ERP, on the other hand, have received attention rather belatedly. In this respect, the debate has focused largely on macroeconomic aspects, especially the importance of US financial assistance for the rapid recovery of Western Europe in general and the German ‘economic miracle’ in particular. Regarding the latter, a long debate opposed and continues to oppose those who see the Marshall Plan as a key factor for the postwar growth in West Germany with others who argue that most conditions for this expansion had been in place earlier.⁴ Alan Milward has in turn even questioned the significance of the ERP as a whole, highlighting instead the crucial importance of West Germany as a trading partner for the other European countries.⁵

Research on the impact of the Marshall Plan at the microeconomic level started much later. This research is largely based on the so-called Technical Assistance Programme, and has been facilitated recently by the opening of the relevant archival material in the United States.⁶ Between 1948 and 1958, several thousand missions with participants from industry, labour and government from all the OEEC countries visited the United States to explore the reasons for the superior performance of its economy. At the same time, a large number of American experts and consultants toured European factories in order to identify the causes and possible remedies for the apparent productivity gap between the United States and Europe. In 1953, a European Productivity Agency, or EPA, was established to co-ordinate these efforts.⁷

So far, most of the research has remained on the level of ‘ideology’ rather than the practical implementation of the US model. Especially concerning the alleged superiority of US management, several authors have noted the enthusiasm of the returning visitors and the subsequent diffusion of American managerial terminology and fashions.⁸ More recent work has, however, questioned the alleged ease with which these were disseminated in Europe. Richard Kuisel, for example, who has studied the reports of the French productivity missions to the United States in detail, points out that a majority of missionaries considered the application of the American experience in France to be unfeasible or even ‘undesirable’.⁹ Jonathan Zeitlin has highlighted the rather hostile reaction of many British engineers and managers towards American-style mass production, both before and after the Second World War. In the few available case studies, it appears indeed that US technology and, more importantly, the American methods of shop floor organisation encountered significant resistance in European firms.¹⁰

These authors have so far concentrated almost exclusively on mass production and Fordism, which they perceive as the core of Americanisation.¹¹ Only recently have they started to examine the transfer and implementation of what they see as the American mass production model and its related elements to Japan and Europe in more detail.¹² However, at the moment, there is only one element of the American model, management education, where the transfer process as well as its outcome have been studied in depth. Robert Locke was the first to show how the existing educational traditions shaped the speed and the extent to which US-type business schools and general management as a subject were introduced in Britain, Germany and France after the Second World War.¹³ His work has been followed by a number of more detailed studies on the evolution of management education in Europe which also included other countries and highlighted the role of nongovernmental institutions, such as the Ford Foundation, in the attempted transfer of the US model.¹⁴

However, without questioning the crucial role of management education, we should not forget that it is only one among many other possible transfer mechanisms and that even the introduction of US-type business schools tells us in the end very little about the actual adoption of American management models in different industrial or service sectors, companies or regions. It seems therefore appropriate and necessary to focus our attention on a much wider range of institutions, channels and actors involved in the possible Americanisation of European business, and to study the response to the US management models in a number of cases in depth.

The transfer of management models

The transfer of organisational innovations and learning from best practices is a complicated process, especially when it occurs between different countries. The following section will suggest a few basic concepts for the analysis of the transfer of management and organisational models as part of the attempted Americanisation of European business after the Second World War.

Our aim is not to provide a comprehensive theoretical framework, but to put forward some key concepts which can be helpful in identifying the lessons from the different case studies in this volume. Taken together, these individual cases thus contribute to an enhanced understanding of the entire process of knowledge transfer, from the sources of managerial know-how to the receiving end, be it whole sectors, companies or regions. In order to facilitate a tighter integration of the case studies, three concepts seem to be of special value: the channels or conduits used in the transfer; the actual transfer process’, namely the role of the sender and receiver; and, last but not least, the translation or transformation of the information received into practice.

Transfer channels

This rather complex concept is widely used in the literature on the diffusion of innovations. Diffusion can be defined as ‘the process by which an innovation is communicated through certain channels over time among members of a social system. It is a special kind of communication, in that the messages are concerned with new ideas.’¹⁵ Channels are connecting actors and institutions in such a way that messages are communicated between them. Mass media channels for example, are useful in creating knowledge of innovations, ‘whereas interpersonal channels are more effective in forming and changing attitudes towards the new idea, and thus influencing the decision to adopt or reject a new idea.’¹⁶

Comprehensive studies have established a typology of the different intermediaries, or linkers’, and their interplay in the diffusion process.¹⁷ Among these linking roles, three prove especially useful in the context of this book. There are first the so-called conveyors. They intervene in the transfer of knowledge from its producers, such as researchers and experts, to its users. Such a role can be carried out, for example, by agents, trainers, demonstrators, system engineers, scientific experts and teachers. Consultants on the other hand, are seen to assist users in the identification of problems, in establishing a link with the appropriate resources for their solution and in the implementation of this solution. Thus, they act primarily as ‘change agents’, which includes the roles of facilitators, objective observers and process analysts. An especially prominent position in the diffusion process can be attributed to the leaders who are executives either of companies, whether in the private or public sector, or of trade associations. Unlike conveyors or consultants, they are ‘insiders’ in the receiving system, and as such not only have a powerful influence on their own organisation, but can also provide an important example for others.

These ‘linkers’ have to be seen as part of social networks which influence and determine their relationships to both producers/senders and users/receivers of knowledge. It is therefore crucial in the analyses of the transfer process to go beyond anonymous institutions and structures and include the study of informal personal relationships and contacts, the role of reference groups as well as the social strategies pursued by different actors at different stages in the dissemination and adoption process. For example, the extent of the social network of a manager, rather than his or her formal position, might be a key factor for the introduction of new management models in a company. Similarly, a small but socially and politically influential group can pave the way for a widespread diffusion of technological or organisational know-how in a given country or region.¹⁸

On the other hand, it is important to note that not only actors but also companies and institutions play an important role in the transfer process. Multinationals or trading companies, for example, play significant roles in disseminating management know-how across national borders, notably by acting as successful examples in their host countries.¹⁹ The same is true for global providers of professional services such as accountants or management consultants who try to implement similar models and techniques worldwide.²⁰ In this context, it should be noted that companies in certain countries sometimes play the role of intermediaries, ‘translating’ American methods into ‘European terms’ and thus facilitating their wide-spread dissemination across the Continent.²¹

When it comes to the role of institutions, these can act as channels themselves or, more importantly, facilitate the establishment of direct contacts between the different actors involved in the transfer process. In this respect, American initiatives for the creation of both national and transnational institutions in the immediate postwar period played a unique and innovative role. During the 1950s, institutions such as the National Productivity Centres or the European Productivity Agency brought together European opinion leaders, managers, trade union leaders, professionals, teachers and so on. In this way, they certainly facilitated the transfer of management models, not only from the United States to Europe, but also between different European countries.

The transfer process

Recent research has highlighted the role of national institutional settings in determining the outcome of the diffusion of American-inspired ideas. Any successful Americanisation depended on the strength of the US efforts and on the institutional circumstances in recipient countries open to American ideas.²² The nation state is seen as a so-called ‘structured setting’ for a variety of solutions, driven by political, economic, technological and institutional factors. These factors determined whether the US models were transmitted at all, and also influenced the extent of their adoption. Moreover, the national institutions allowed countries to take part actively in the transfer process by searching for new knowledge themselves, by selecting what should be transferred and by adapting it to the national systemic context.²³

Detailed studies within the field of management education have highlighted the role of institutional constraints and opportunities at a national level, in order to understand ...

Table of contents

• Cover Page
• Half Title page
• Series Page
• Title Page
• Copyright Page
• Contents
• List of Illustrations
• Notes on Contributors
• Preface
• List of Abbreviations
• 1 The Marshall Plan and the Transfer of us Management Models to Europe An introductory framework
• 2 From Business Reform Programme to Production Drive The transformation of US technical assistance to Western Europe
• Part I Transfer Mechanisms and Channels
• Part II The Transfer Process
• Part III The Translation and Transformation
• Index