The Post-World War II Transformations of the Large Corporation Facing Financialization

Since the 1980s, we have been confronted with a new Capitalism, which incorporates a radical transformations of Corporate (and industrial) structures and the end of the “Chandlerian” managerial firm. The domination of a shareholder value conception of the Corporate Governance has been at hearth of these transformations of the large corporation, leading to major change in the structures and modes of management of industrial enterprises.

Our purpose here is to show how the own evolution of the large Managerial Corporation, starting in the 1960s, has been a key elements which, together with the transformations of finance, prepared the ground for the major changes starting in the 1980s, which led to the emergence of this new dominant conception of the Firm. We will proceed as follows.

I. After a review of the major aspects of the transformation of the Corporation, we will focus on the evolution of the large multidivisional company that has, in our sense played a major role. We will emphasize three key aspects:

- Decentralization and widespread organization in "strategic business units".

- The development of new management systems and what has been called "management by numbers"

- And what is perhaps the most important transformation: the segmentation of the managerial structure. That is the changing relationship between the top management and middle management, accompanied by a profound transformation of the characters of top managers, and the formation of a new corporate elite.

II. In a second part we will try to analyze how these transformations, combined with the increasing pressure of financial activism, have led to a profound transformation of the characters and “nature” of the large corporation, in two steps. Following a sociological approach in terms of “(organizational) field” inspired by Fliegstein and Bourdieu, we will consider the evolution from a managerial conception of the corporation (dominated by consideration of production, growth and market shares) to first a “Financial conception” and then to a second financial conception, or “shareholder value conception”. This evolution will be connected to the transformation of the ‘corporate field’ with the emergence and the increasing influence of new actors and new practices, and the formation of new corporate ‘elites’, with new habits and new interests.

As conclusion we will see the implications of these views, as regards the necessary conditions to overcome the domination of the shareholder ideology, and what can be analyzed as a shareholder system. It include the necessity to consider the strong institutional complementarities in which the present corporate forms are imbedded.