Tuesday, January 1, 2008

Alfred Chandler and the ghostwriters' unappreciated contribution

A while ago, I posted some material regarding how well-placed academics rely on low-paid researchers to do their work for them, leading them to produce shoddy and sometimes plagiarized work.

An interesting counter example is the ghostwriter, John McDonald, who wrote Alfred P. Sloan's My Years with General Motors. In this case, the ghostwriter was superior to the purported author.

The book was not published for years, until McDonald sued the company to allow the manuscript to be published. McDonald's wrote a very interesting book about his role and the reason for General Motors's fears about its publication:

McDonald, John. 2002. A Ghost's Memoir: The Making of Alfred P. Sloan's "My Years with General Motors." (Cambridge and London: The MIT Press).

1: On March 4, 1959 Sloan called McDonald to say that General Motors did not want the book published because its lawyers feared it would "destroy the company."

75-6: "Hugh Cox, who was chief trial counsel for the Du Ponts during the many years of the government suit against Du Pont/General Motors .... was pleased with the book as American history, and could not see what Cravath had against it, except possibly one line in the Product Policy of 1921: "A monopoly is not planned."

48: Their specific objection was the detailing of the 1921 Product Policy drafted by Sloan. Even though the policy specified, "a monopoly is not planned," the lawyers feared the government would still interpret the document as monopolistic since Sloan wanted GM to "cover the market for all grades of automobiles."

Later, I found that the story became more interesting. McDonald, a writer for Fortune, had already published a very popular book on game theory. I had seen the book around for years, but never opened it and never associated it with Sloan's book.

It turns out that it was McDonald who infused Sloan's book with its highly praised explanation of corporate strategy. In addition, McDonald hired a young research assistant, Alfred Chandler. According to the article cited below, McDonald was instrumental in setting Chandler on a course of appreciating the importance of strategy. Although Chandler won extensive accolades for this work, until recently, McDonald's role had gone unnoticed.

Here are some extracts from the article. I hope you enjoyed this much as I did.

Mckenna, Christopher D. 2006. "Writing the Ghost-Writer Back In: Alfred Sloan, Alfred Chandler, John McDonald and the Intellectual Origins Of Corporate Strategy." Management & Organizational History, 2: 1, pp. 107-26.

109-10: "For historians of management thought, there are few books that can surpass the influence of Chandler's classic Strategy and Structure or Sloan's epic My Years with General Motors. Both books, published in the early 1960s, achieved iconic stature within a short period of their publication, and both books still remain in print more than 40 years later. In 2002, however, John McDonald's book A Ghost's Memoir shattered most academics' unexamined presumption that Alfred Sloan himself had written (with perhaps a bit of editorial help) the management classic My Years with General Motors. Indeed, as journalist Dan Seligman explained in his foreword to John McDonald's memoir, even the publishers of Sloan's book had forgotten McDonald's involvement, despite McDonald's equal share of the royalties, when Currency/Doubleday decided to release a new edition of My Years with General Motors in 1990. Upset by the largely contrived history that Peter Drucker wrote for a new introduction to the book, John McDonald decided to set the record straight by writing his own, firsthand account of the `making' of Sloan's famous book. McDonald's account would blow the lid off the hidden history, exposing in the process just why the various accounts of General Motors' historical evolution, written by multiple people in the 1950s and 1960s, appeared to fit together so precisely."

113: "it seems likely that Chandler was also strongly influenced by McDonald's views on strategy given that he had, according to Sloan's preface to My Years with General Motors, `given his [Chandler's] good mind to reviewing successive drafts of the manuscript'." (Sloan, My Years with General Motors, xiv).

114: "... it was John McDonald's particular interest in `strategy', reconfigured by Alfred Chandler's historical perspective, which would come to dominate the terminology of the emerging discipline of corporate strategy."

114: "we should also consider what Alfred Chandler wrote in the second sentence of his acknowledgements in Strategy and Structure: `First of all, I want to thank John McDonald and Catharine Stevens, with whom I started to learn about the workings of big business and to think about the historical development of corporate structure and strategy.'" Chandler, Strategy and Structure, i.

114: "Thus it is only with our subsequent knowledge of John McDonald's ongoing struggle with General Motors' lawyers to release My Years with General Motors that the following disclaimer in Chandler's preface to Strategy and Structure from 1962 becomes intelligible: `[T]he General Motors story ultimately came to be based on information and materials which had been in the public domain before the summer of 1956. Yet I am confident that should information not yet in the public domain become available, it would not substantially alter the history presented here." In other words, having done substantial research in the archives of General Motors, which had subsequently been suppressed by the corporate lawyers from Cravath, Swaine, and Moore, who were working for the automotive giant." Chandler, Strategy and Structure, ii

115: "Alfred Chandler had no doubt learned a painful lesson while working for Sloan and McDonald -- it was best to stay away from the issue of antitrust in the shaping of corporate strategy during the 1950s or risk losing years of academic research to lawsuits and shuttered corporate archives."

116: "Yet it could be argued that Chandler's own historical analysis of both General Motors and DuPont was also circular because both of the corporate case studies were eventually supported by scholarly biographies of Alfred Sloan and Pierre du Pont that were researched and written by Chandler himself. This is not the only instance where Chandler's `predictions' and subsequent `outcomes' have become intertwined, for Chandler's expectation that the multidivisional form would continue to spread would be predicated on the support that Chandler's account offered to the management consultants from McKinsey & Company who used Strategy and Structure to sell the novel organizational form to their international clients. In retrospect, it was almost impossible for scholars to separate Chandler's theoretical analysis from his historical evidence because he was so active in the collection, production and distribution of both the archival input and the theoretical output."


Peter Dorman said...

Thanks, Michael -- this is really interesting. I have long thought that the M-form innovation was a critical step in the evolution of capitalism, defining a level of nonmarket resource allocation separate from the management of production. It seemed to me that this was a necessary move. I wonder if this view would have to be altered by the actual history of the idea.

Michael Perelman said...

The author suggests it might in that Chandler was involved in creating the data and the theory.

ANRP said...

Sorry guys. I was working with Alfred Chandler just before his death last year, and while he did perhaps identify the M-form and its origins for the edification of the rest of us, he held Pierre du Pont and Alfred Sloan as the men who developed it and put it into practice.

Sloan was a genius in his own right, and the best evidence of that is the people he surrounded himself with.