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Business history as historyFranco Amatoria

a Istituto di Storia Economica, Bocconi University, Milan, Italy

To cite this Article Amatori, Franco(2009) 'Business history as history', Business History, 51: 2, 143 — 156

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Business history as history

Keynote Lecture at the 2008 European Business History Association Conference

(Bergen, Norway, August 2008)

Franco Amatori*

Istituto di Storia Economica, Bocconi University, Via Roentgen 1, I-20136, Milan, Italy

I would like to thank Harm Schroeter and his colleagues on the organising committeefor the honour of being able to stand before you today and deliver this keynote

address. As many of you know, I have a strong intellectual – and emotional –

attachment to the European Business History Association which, over the past 12

years, has been for me a great source of personal and professional encounters.

I will be quite frank: I consider us to be a very fortunate group of scholars

because we are really working in an exciting field – business history. Think, for

instance, of what might be considered the four most important developments of the

past half century. I would suggest that they are:

(1) the spread of democracy around the world;(2) the rapid technological changes of the information age;

(3) the globalisation of finance, production and trade;

(4) and, finally, the spread of market-oriented capitalism.

As business history speaks directly to at least three of the four, I would like to focus

on what my experience suggests are the central aspects of writing the history of

business. That our field is so dynamic can be seen, of course, from many angles; mine

is just one of them.

Tolerance

I start off this speech with a plea for tolerance; in my case it means a deep acceptance

of all types of approaches and research directions. Equally respectable are the

approaches from economists or from those who aim more to the cultural

dimensions, from those who are interested in the relationship between enterprise

and society, as well as from academics who are interested in expanding on issues such

as gender and minorities. I am even willing to accept the approach of scholars who

hate the capitalist system. Every attitude in business history is fine for me – as long as

*Email: [email protected]

Business History

Vol. 51, No. 2, March 2009, 143–156

ISSN 0007-6791 print/ISSN 1743-7938 online

Ó 2009 Taylor & Francis

DOI: 10.1080/00076790902726491

http://www.informaworld.com



it has a minimum of sense! This is a message that I address especially to young

people. I believe that they need to study what they consider to be challenging and

exciting – not what they may think is just useful for a career in academia. If they do

not follow these instincts, they risk killing all sense of innovation.

To be blunt, I must say I do not like the list of issues drafted by senior scholars

on what will be the future of business history. Many times – in the course of

seminars – I have confronted the question: where is business history headed? My

answer is always the same: it will go wherever it likes, without a committee or a court

tracing and determining its direction.

It is also important to keep in mind that my words do not imply that I forego my

right to be critical of what a young scholar will write. For sure, I will be benevolent

but I still will not ratify at any cost his or her methodology and findings.

Basics

At the same time, even if we operate in a climate of extreme openness, it must beclear that in business history we need a minimum level of fundamentals (or,

information) upon which we can base all sorts of arguments.

This concept was clearly stated in a 1936 article by the economist Riccardo Bachi,

the mentor of the future Nobel economics laureate, Franco Modigliani, which

appeared in an Italian journal Il Barometro Economico (The Economic Barometer).

Using the language of his times, Bachi proclaimed that to write any kind of business

history you needed to include data concerning the organisation of the enterprise, its

managers, the way in which capital was acquired, the technical evolution of its

production, relations with workers, the formation of fixed capital, cash flows,

production costs, prices of products and the way they are brought to market,coalitions and agreements, relationships between the enterprise and the political

economy, the economic results of the firm, and then the collocation of its results inside

the general trend of the economy. As you can see, Bachi was very demanding in his

requisites and most likely it is not always possible to satisfy them, but I think that all

business historians should make an effort to answer as many as possible of these

questions. As I said, this is the basis for any further step and this is the reason why I

am rather perplexed when I read books that attempt to present even what might be

considered fascinating arguments, but then lack completely this kind of basic data. As

the phrase itself says, ‘Business history’ is in fact composed of two terms, a

substantive – ‘history’ – about which we will talk at length later – and an adjective

‘business’, which is practically the equivalent of ‘firm’. This adjective compels us to be

very familiar with the economic theory of the firm with which we must confront our

arguments in proceeding with our work. With some of these theories, especially the

dynamic ones, we can have very useful cooperation. We must also know the

management side, the ways a firm works, its functions, the way to understand its

performances, with the ratios and the indices that are used by firms themselves. It is

important that we have the ability to analyse a balance sheet, as this is clearly an

indispensable tool for better understanding what is going on within the firm.

The relationship with business schools and practitionersWe cannot hide the fact that we deal with highly practical problems. A robust demand

for business history comes from Business Schools. In this way, it is natural that business

144 F. Amatori



history gets close to managerial disciplines. Especially evident is its proximity with issues

of strategy. On the other hand, everybody knows the role of Alfred Chandler in this field.

We cannot deny that in this way business history may assume an ancillary position: a

price to pay to have a decent job. Business history takes a similar position when it is used

for the necessities of practitioners. For them, business history can be a tool to strengthen

the corporate culture; or it can become a case of Historia magistra vitae. History permits

us to avoid mistakes since we understand all the peculiarities of what was successful in a

given framework of time and probably cannot work in another era. I must say that the

temptation of an alliance with management people is very strong, probably reinforced by

the fact that, for those of us active in schools of economics and business, there is usually a

difficult relationship with our economist colleagues who often consider us little more than

journalists. So we get back to the classic question of Lenin: what is to be done?

History as competitive advantage

Certainly with scholars of strategy we have lots to share. They can supply us withtheir concepts and their keys of interpretation. In turn, we can offer factual rigor and

also abandon any kind of inferiority, taking back the Chandlerian attitude of

theorising as Richard Whittington advocated in one of his recent essays.

On a personal level, this dialogue was fairly easy because I began my career at

IFAP, a business school for managers and executives of the state-owned Italian

conglomerate, IRI. Moving fast-forward by almost 35 years, today I am the head of

what can be described as a Business History Unit at my university, but I have never

compelled my colleagues to take one direction or another. In fact, some opted to

strengthen their ties with the Management Department, while I decided to pursue

with ever more intensity my role as an historian. What does it mean for me to be anhistorian within the field of business history? Maybe the best explanation can be

found in the chapters I wrote for Impresa e Industria in Italia, a book co-authored

with Andrea Colli. Here I defined history as the ability to place the Italian firm –

which is firmly at the centre of the stage – in the context of the unified nation which

Italy became only in 1861. The unification of Italy was not a painless process, as it

effectively excluded the major part of the population from either a political or

civilian affiliation, creating a social conflict whose consequences we are still paying

for even today. It also signified the bad lessons that the political hierarchy

transmitted to Italian entrepreneurs who grew used to monopolies, state favouritism,

and a general lack of respect for rules. Being a historian also means having to explain

the determining role which political and legal institutions played in the 60s and 70s in

positioning Italy in such a way that it did not enter the group of the world’s most

advanced economies, but it also means explaining that Italy is made up of lots of

little states, of many cities, and how the domestication of the countryside started in

the Medieval era and in the Renaissance years, eventually assuring that Italy would

always maintain a high economic standard. Finally, it also means explaining to

others how Italy is not an isolated case and that it does not have a unique model

because the country, like all the others, had to face the impact of the various

industrial revolutions and supply some clear responses. I like to imagine this

phenomenon as two sprockets turning in opposite directions but which need to align:

on the one side, there is the nation with all its idiosyncrasies, while on the other sidewe see the economic and technological steps which this stubborn Chandlerian

considers to be universal.

Business History 145



I made some similar considerations during an EBHA conference in Oslo back in

2001. That year I took part in a panel discussion which examined the role of business

history in business schools and I spoke about how most of my teaching up to then had

been dedicated to students at the undergraduate level, though a nationwide

transformation of the Italian university system was about to bring me into more

teaching of graduate courses. Seven years later I am convinced that my competitive

advantage as a historian – or as someone who is capable of giving a context to

phenomena – is stronger than ever. For years now I have offered a course to graduate

students who are specialising in organisational management and IT. The first time I met

with the initial group of students, a couple of them asked me in a rather provocative way:

‘what do we need this course for?’ ‘For nothing!’, I replied, pointing out that my course

would not give students more professional skills than they already have. Rather, there

was a chance that it would help them navigate the waters of globalisation and allow for a

better understanding of how they fit in and what role they might play in the process,

maybe making them better world citizens. The course was a big success and feedback

from students at the end of the semester was enthusiastic; it has been that way ever since.I stole an idea from Raymond Vernon to create the course’s name (‘The firm in

the era of shrinking space’, examining the second half of the twentieth century);

students received a global perspective because we studied the US, Europe, Japan,

what we once defined as the Third World, as well as the new giants, China and India.

Business history was woven together with macro-economic, technological, political

and socio-cultural histories. When necessary, we did not shy away from going back

even further in time in order to explain a contemporary phenomenon. For example,

looking at the relationship between business and government in Japan post-1950, we

set out to understand the significance of the fact that in the country of the ‘Rising

Sun’ a unified state appeared as early as the seventh century. On a similar note, weexamine whether the perennial distinction in Japan between a political head and a

leader, the Emperor – who represented the country’s unity – has any significance.

Which were the historical and social determinants that made possible an efficient

developmental state in Asia but not in South America?

What role did the Civil War have on the evolution of the American business

system? Was the fact that John Locke was English, while Friedrich Wilhelm Hegel

was born in Germany, of some influence when we talk of different forms of corporate

governance? This was the methodology of our course which certainly did not supply

a new set of skills to my students, but I would like to think did enrich them as

individuals and future business leaders. I can still remember one of my students in

particular. He was in the middle of an internship at an important investment bank,

but went out of his way to come to every lesson, often showing up in class still

dressed in his elegant ‘City’ attire.

History, therefore, is like a discipline which opens paths in our universities and

allows us to explain with pride to others exactly who we are, without renouncing on

any and all alliances but also staying true to ourselves. And, in concrete terms, what

does it mean to do history? Reflecting on my own experiences, I would like to offer

six key words or propositions.

1) IndependenceThis is our Hippocratic Oath to which we cannot fail to be faithful. To do so would

probably make it impossible for most of us to look at ourselves in the mirror every

146 F. Amatori



morning while brushing our teeth! In this sense, being independent is not an easy

task because often corporations are funding our work and supplying us with the raw

materials necessary for our research. I am the first to admit that I have occasionally

found myself in a difficult situation as regards my intellectual independence. For

example, I once criticised an entrepreneur in the steel sector whose family was

financing our research. I had discovered that sometimes this business leader had

made the wrong decisions; rather than change my opinion, I opted to exclude my

essay from the final volume. Years later I was pleased to receive partial recognition

when Ulrich Wengenroth came to the same conclusion after seeing German

documents on the same company.

I encountered a similar episode when writing the history of Italy’s most

important department store chain. In this case, I was asked by the former company

CEO (whose family had run the department store chain for almost 50 years) to write

a history of La Rinascente. This gentleman had been unexpectedly fired by the new

owner (who just happened to be Gianni Agnelli, the well-known head of Fiat) and he

wanted me to write his version of the facts. Still, on the basis of all thedocumentation I was able to review, I knew that Agnelli was not the only one to

blame for what had happened at La Rinascente after the change in ownership in

1969. Each side had made both wise moves as well as major mistakes. Alas, the

outcome was a book which was ‘boycotted’ by both the old as well as the new owners

and was practically published in a clandestine manner.

While I was at peace with my conscience, I know that sometimes we have to be

on the watch for other, more subtle, attacks on our independence. For example, we

sometimes risk the ‘Stockholm syndrome’ if we work closely with a sponsor who also

happens to be fascinating. That gentleman of La Rinascente to whom I said no when

he asked me to make certain affirmations about the new owners, still had a profoundimpact on the basic themes of my book; so much so that I still think of that volume

as a sort of autobiography of the principal protagonist. As you can see, the confines

are very loosely defined and sometimes we can find ourselves at critical points that

challenge the independence of even the most serious of us here present this

afternoon.

By independence I also mean the ability to keep some distance from what I call

fashions or the urgencies of the present. For example, in the mid-1990s I wrote an

essay for a volume on state-owned enterprises published by CUP. Events at the time

had an impact on my ideas and I ended up giving a negative assessment to something

which I would evaluate differently today. Years earlier I had a similar experience.

I had been studying a steel plant in the 1930s and the company gave me free access to

the dossiers of all the workers who had been hired at that plant from the beginning of

the 1900s up until the 1970s. Reviewing the dossiers during the period of Fascism

in the late 1920s and 1930s, I saw conditions of great poverty, also moral degradation,

because these workers (who had no type of union protection) were constantly forced

to ask the plant directors for favours of one type or another. As I wrote this essay in

the 1970s, I was convinced that the reality was now entirely different and that the

plant’s workers were both proud as well as strong. I put together a sort of social-

demographic theory to explain the differences which was entirely convincing. Then

one day I started poking around the archives – it was enormous and I had free reign as

no one else was around – when I came upon the records of the very same recentlyretired employees whom I thought I knew so well. You can imagine how surprised I

was to discover that these ‘proud and strong’ workers of the 1970s had often made




requests to plant directors that were virtually the same as what their predecessors had

asked for during the times of Fascism! This is why we need to be careful that the subtle

influences of the present do not impact on our impressions of the past.

2) Relevance

After ‘Independence’ I cannot help but think that the next key word is ‘Relevance’.

What do I mean by relevance? That history rises above technicalities and specificities

to address a wider readership who can really tell us if an idea is relevant or not. It’s a

sort of Darwinian process. A book or essay will become a reference for years to

come. Some will think that whether or not something is relevant should be decided

only by fellow business historians. Still, I’m afraid that if we do this, we risk that our

closed circle of peers deems something relevant that actually over time will reveal

itself to be ephemeral. A knowledgeable researcher has the ability to deal with an

issue and to render it so as to have a universal interest. My first important research

was on ‘Production cycles, technologies, and labor organization’, with the subtitle of ‘Manufacturing in Italian integrated steel mills from the 30s through the 60s’.

Sounds pretty dry and hardly stimulating? In the spring of 1978 I was doing research

on this in the archives of IRI when I ran into one of the deans of Italian

historiography, Gabriele DeRosa. He was a delightful person and when I told him

the topic of my research his facial expression changed; he looked like someone who

had just taken a bitter cough syrup or swallowed a frog! How, he asked me, could a

young scholar at the very outset of his career decide to study something which was so

unimportant and arid? Well, this young historian replied (and I hope that the

message came through in the essay I ended up writing) that the research theme was

part of a larger phenomenon, the Americanisation process in Italy. The Communistleader, Antonio Gramsci, envisioned this trend in the notebooks he kept while in

prison between 1926 and 1937, commenting on how the process would constrain

workers and force on them a new discipline and work ethic. As all of us know, years

later the topic took on an even greater importance and now it is much more at the

centre of scholars’ attention. This is what I mean by relevance.

We do not need to tell the stories of great men or great events; rather, we need to

offer a context for what happened and place that incident in a greater framework

that will allow others to understand its real significance. Today, for example, thanks

to the work of Whittington and Mayer, a revival of research on the relationship

between corporate structures and strategies is taking place in Europe. A few years

ago I oversaw an excellent doctoral thesis on this topic, where the young scholar

opted to compare experiences in Italy with those in Spain. I encouraged her to go

beyond a simple technical approach. Of course it is important to know if

diversification is more or less correlated, if the firm is a conglomerate, a holding

or a multidivisional. But, in my opinion, it is even more important to understand

how all of this happens within the context of a specific nation. What does

organisational change mean for large corporations in countries trying to catch up?

How is power reallocated within a firm and, from there, within a society? What

role does institutional or legislative evolution play in all this? What kind of

managerial class will emerge? What type of political class? If we don’t pose these

questions to ourselves, our research risks becoming a sterile academic exercise, ormaybe we should just offer ourselves as consultants to companies; but this is

another job!

148 F. Amatori



There is no need to write the history of ‘big’ or ‘great’ events. I am thinking, for

example, of how useful it would be to reconstruct the history of female

entrepreneurship in Mediterranean countries in the last 50 years. The phenomenon

brought about some very important changes in our society. It is ‘relevant’ and

certainly worthy of the attention of a serious business historian. Naturally, relevance

necessitates confrontation, because only within a comparison is it possible to

understand the real weight of a protagonist, a phenomenon, or an episode. As

Alexander Gerschenkron said, to really know a country you need to know at least

TWO of them. You discover relevance in your project when you throw yourself

directly into the research. At my age, I know that many of us rely too much on

younger research assistants to do most of this work. I am the first to admit that I am

not one of those people who becomes ecstatic when the word ‘archives’ is

pronounced. Of course, most archives are difficult to navigate, full of dust, often hot

in the summer and bitter cold in the winter; not exactly conditions which inspire

great academic work! I do not like archives and would much prefer to sit in my

library and read books. But I also have resigned myself to the fact that – if I reallywant to be an historian – I must have a first-hand knowledge of the documentation;

alternatively, I risk doing something insignificant based almost exclusively on the

interpretations of others.

3) Wide and critical use of sources

In my ‘younger days’ – from the mid-1970s until the end of the 1990s – I spent a lot

of time in archives. I even discovered new archives or original sources, like the

personnel records of factory workers that I was the first in Italy to mention in an

essay I wrote in 1981. I often immersed myself in primary sources, but always with acritical eye because all sources need to be examined this way, to be compared or

integrated with other sources (both primary as well as secondary), and studied both

for what they say and what they do not say.

A great scholar (who, alas, never published in anything but Italian), Franco

Bonelli, gave me at least three precious pieces of advice: first, do not just tell , but also

explain what happened; second, never publish the sources exactly as you find them;

and, third, remember that problems come before the sources. Bonelli, for example,

was the first scholar in Italy to access industrial archives, in this case those of Terni

Steelworks, the country’s first modern firm. Gianlupo Osti was the CEO of Terni

when Bonelli started going through the company’s archives and someone asked him

if he was concerned about damage to the company’s reputation should it be

discovered that one of his predecessors – in a company which had historically

enjoyed a privileged relationship with the government – had done something

embarrassing or illegal. Osti’s reply was that no great family would be unhappy to

discover a portrait of Francis Drake hanging in the gallery of its ancestors. Still, even

with this kind of openness, with more than 500 crates of documents turned over to

him, Bonelli still found himself facing some extremely big gaps in Terni’s history,

especially with regard to how Terni became a multi-sectorial group based on

negotiations with the political authorities of the 1920s. He was brilliantly able to

overcome these gaps by utilising alternative sources.

I remembered Bonelli’s experience and solution years later when Fiat asked me towrite the story of Lancia, the Italian auto manufacturer renowned for having

produced some of the most beautiful cars in Europe, such as the Lambda, the Aprilia




and the Aurelia. Fiat gave me complete access to what appeared to be Lancia’s

enormous archives. Imagine my surprise when it turned out that the archives for a

company created in 1906 only covered the period from 1930 (the year in which it

became a corporation). On the other hand, the archives were overwhelming for the

last two decades before Lancia was purchased by Fiat in 1969. This situation put me

in a predicament: when Lancia was created in 1906, there were sixty automobile

manufacturers in Italy; by 1930, only two remained (Fiat and Lancia). I knew that

my first obligation as an historian was to explain how this had occurred. In fact, the

250-page book which I wrote about Lancia is equally divided between the period up

to the 1930s, and then the second era of its history. To write Lancia’s history, I

searched for documents mentioning the company in other archives in both Italy and

abroad. I ploughed through magazines and journals around the world. My objective

was to establish some precise hypotheses in my book for why Lancia survived, and

much of my opinion was formed by the documents I was able to consult outside of

Lancia’s archives. As business historians, we usually have access to an infinite variety

of sources: corporate archives, personal and family papers, national and localarchives, documents in an industrial association or Chamber of Commerce,

governmental or parliamentary reports, innumerable publications, magazines, oral

histories, let alone what the web can offer. An historian cannot be afraid to wade

through all these sources, even though he or she must always follow a precise focus, a

focus on the other end that becomes sharper and sharper in the confrontation with

sources in a continuous coming and going between sources and problems. And this

brings us to my fourth key word:

4) Recomposition

Reassembling is one of the primary components of the historical narrative which

needs to bring together parts coming from different and distinct realities. Here I

would like us to remember the great lesson of comparing firms which can be found in

Scale and scope, my favourite work of Alfred Chandler, especially the first chapters.

In Scale and scope we see how important elements which come into play are

intertwined: entrepreneurial decisions and their difficult realisation; the evolution of

technologies with their constraints and opportunities; the dynamics of different

national markets; the shifting relations between government and business; and the

cultures, seen especially as the ability to accept the depersonalised entity which big

business represented. In this sense, Chandler – bringing together so many different

variables – offered us a real key for a global, all-encompassing, understanding of

business in an historic perspective and I am only sorry that he did not go further in

this way, skipping some of those corporate details in favour of giving us more

information on the interaction between these elements. This is the reason why the

essays of Tom McCraw on the US and Jeff Fear on Germany in McCraw’s volume

Creating modern capitalism can be very much appreciated. They provide the reader

with an idea of how vast the sea of business history really is: economics, politics,

social attitudes, professional preferences, cultural and scientific traditions, and the

international context. This is one of the ways I like to do business history. But here,

too, I do not believe that reassembling should only be done for ‘big’ themes. Thereare also some that are small, unpleasant, narrow minded or petty, but which still

require that the historian dirty his hands. Reality is often confused, I repeat,

150 F. Amatori



unpleasant, and it is difficult to see it only as the sum of some kind of Benthamite

utilitarianism, unless you plan to extend it infinitely.

When I was studying Lancia, I remember coming across a corporate decision that

I found impossible to explain. Carlo Pesenti, the owner of a huge conglomerate

which also owned Lancia, had decided to subject the company to a complete

turnaround and entrusted a professional manager with the project which, strangely,

was then stopped at a certain point in 1960 due, supposedly, to a conflict between

corporate management and the office of the technical director. There were no

documents in the corporate archives to explain this interruption, but I needed to

understand what had happened because this manager’s downfall led to the

company’s demise. Around the same time that I was trying to understand what

had taken place, I was lucky enough to meet a ‘little man’ (I use this expression

because the gentleman in question was short and without any distinctive physical

characteristics). This person had been hired as a janitor at Lancia shortly after the

end of World War II only because he entered into one of those privileged categories:

‘war orphans’. It was mutual friends who introduced me to this ‘little man’, who,even though he had no formal instruction, had actually served as Lancia’s legal

counsel for 15 years and, therefore, was privy to many secrets, including this

mysterious episode in Lancia’s history.

The name of the professional manager brought in to turn around Lancia was

Eraldo Fidanza. When Fidanza started this project, he decided that Lancia should

produce a fourth series of the Appia model. That series had gotten off to a bad start,

but over time the model was improved and finally it was becoming a bestseller for

Lancia. But then Lancia hired a new technical director, Antonio Fessia, who was

highly considered in the world of automobile manufacturing. Fessia just was not able

to accept the idea of overseeing the manufacture of a car that had been designed byothers, so he bypassed Fidanza and went directly to the owner – who did not have a

day-by-day role in the company – to present his case. The owner accepted Fessia’s

version of the facts and fired Fidanza, quickly leading, as I already said, to the

company’s demise. Of course, I checked the accuracy of this episode – as it was

explained to me by Franco Valentini (this was the name of the ‘little man’) – with a

few more people who were in Lancia at the time. All of them confirmed Valentini’s

recollection and, a few years later – when the volume on Lancia came out – I had the

satisfaction of further confirmation directly from the famous automobile designer

Sergio Pininfarina, a first-hand witness of the entire story. He and I were on the

panel presenting the book before an important audience in Turin. After finishing my

brief talk, he turned to me and said ‘My compliments to the Professor. He wrote the

whole truth!’ For an historian like myself who was never able to shake off von

Ranke’s famous commandment to ‘show how things actually were’ (wie es eigentlich

gewesen), these words were a real reward!

These reflections bring me to another episode in my research when I had to deal

with an unpleasant incident in the history of La Rinascente. In researching the

company, I encountered an inexplicable situation: why had the department store

chain never completed plans for a merger with the other Italian retailer, Standa? The

archives I consulted offered nothing to explain why two companies which were

highly complementary had never gone ahead with a merger to become a retail giant

in Europe. In that period I was working with documents in the personal archivesfound in the home of the gentleman who had entrusted me with writing La

Rinascente’s story. One day I was on my own, going through the papers in his study




and my curiosity got the better of me: I started poking through a file of letters

archived in a different cabinet. It was clear that some of these documents were rather

personal in nature, but the passion of an historian can usually overcome any form of

prohibition! Almost immediately I came across a letter from one of Standa’s major

shareholders and top managers to his cousin who enjoyed a similar position at La

Rinascente. After giving him three children, the wife of the gentleman from Standa

had run off with his cousin, the one associated with La Rinascente. I was already

aware of this episode, but I did not know about the letter written by Mr Standa to

his cousin, Mr La Rinascente. In this letter, discovered that afternoon, the unlucky

cousin wrote to his rival with a rather vivid choice of words and ended with the

affirmation that the agreement would have done little more than rub more salt into

the wound! You are probably thinking that I am a gossip – and it is true – but I

would also like to think that I am a good historian because I search out all possible

sources, read them and then try to reassemble them into a cohesive story.

5) Continuity and change

We business historians must admit that we are almost entirely oriented to studying

contemporary history; or even better, we could say that we are overdoing it,

studying issues too close to current day. We have been pushed to this status by the

pressures of the external environment, by the universities where we teach, by our

students, and probably by the fact that we live in an era of epochal transformations.

This is a tendency that must be corrected for two reasons: first, because business

history does not start with the industrial revolution. Up until the eighteenth

century, about 90% of the existing firms were peasant farms where there was a close

relationship between firm and family, in which there was no division of labour, andwhere it was almost always difficult to distinguish the various sources of income. All

this helps us to remember that the world has not always been as it is now and that

history is – above all – a disinterested form of knowledge, disinterested and not

teleological. The second reason to study the pre-industrial peasant ‘firm’ – and in

this case I am not afraid of being accused of teleologism – is that many of the

abilities and resources that we find today in areas of contemporary economies

which are very dynamic (just as in, for instance, the Italian industrial districts of the

last 30 years) have their origins in that pre-industrial world with its climate of long-

run continuity. Think, for instance, of elements like trust among the various

members of a community, the ethics of hard work and sacrifices, and even so many

manual skills that seem in-bred in the inhabitants of certain regions. As I said, all

this can only be explained with a long-term perspective. I could see that very clearly

when I studied the stories of nineteenth and twentieth century entrepreneurs in my

native region in Italy, which is the Marche, one of the typical areas of industrial

districts.

It seems only fitting, therefore, that the business historian immerses him or

herself into this reality so as to understand the long-standing continuity which

characterises firms, even from centuries ago. But we should not limit ourselves to

peasant farms. We can also consider the management skills found in modern firms.

Like Alfred Chandler, we usually link their birth with the arrival of the railways.

Recently a group of scholars analysed the organisational and accountingtechniques of the Arsenal of Venice. It was found that these techniques were highly

refined, leading the scholars to come to the conclusion that – at least as regards

152 F. Amatori



Europe – the techniques had been transferred to large industrial firms. Certainly,

however, the historian needs to consider the other side of the coin; in other words, we

need to accept the idea of change, of drastic change, of nature leaping ahead. What

can we say, for example, about a country such as the United States where until the

1870s there were just a couple of companies with assets of slightly more than a

million dollars? One of the outcomes of the Second Industrial Revolution was that in

1900 Standard Oil could boast of its 122 million dollars of assets. A few years later,

Duke’s American Tobacco proudly spoke of its 500 million dollars of capitalisation,

and then, at the beginning of the twentieth century, the merger of Andrew Carnegie’s

empire and some other important steel manufacturers gave birth to US Steel with its

assets of 1.4 billion dollars that represented, at that time, almost 7% of GNP in the

US. How can anyone say that this kind of data does not signal an epochal

change? How can anyone underestimate the seismic shift brought on by the assembly

line of Henry Ford, which made it possible by the spring of 1914 to produce an auto

in 90 minutes, when six months earlier it had taken almost thirteen hours to do the

same?And let me also use two examples from my own country: when the steel mill was

created in Terni in 1884, the process utilised was that known as the Martin-Siemens.

The process had no relation with the local steel traditions; the experts who created

the new plant were looked upon as ‘Martians’ by the local workers. My colleague

Valerio Castronovo, biographer of Giovanni Agnelli, uses similar terms for his hero,

too. According to Castronovo, at the beginning of the twentieth century Agnelli

created a constellation of interests – a process of vertical integration for auto

manufacturing – like Turin had never seen.

This means that the historian is obliged to accept both sides of the coin: the

scholar who emphasises one and downplays or negates the other, runs the risk of notactually understanding the real process.

We have almost arrived at the end of my talk. So what purpose does history

serve? Certainly it can be useful for our future activities, but I do not see it beyond a

certain point because human reactions are unpredictable, and human reactions are

both individual as well as collective. For example, whoever would have imagined

that Europe – so barbaric when contrasted with China, India or the Muslim world –

would have risen so much after 1000? Following the devastating War of the Roses,

would it have been possible to imagine that England would become a world power in

the course of the next century? And who could foresee a humbled, post-World War

II Japan transforming itself over the course of 40 years into the world’s second

economic force and almost overtaking the US at one point? In the same way, would

it have been possible to imagine how the US would respond to that challenge and

others at the end of the twentieth century? Years earlier Karl Marx remarked that

the first time history occurs as a tragedy, but the second time as a farce. I try not to

rely too much on history as a teacher, but prefer to think that John Tosh, a British

historian who wrote a book about methodology which I often refer to, got things

right when he wrote (I am paraphrasing an Italian edition of the book):

contemporary society often is described as ruled by the experience of change . . . we livein a world which is radically different from that of the past, in which a sense of history is

no longer necessary nor are the lessons imparted by history. But this kind of anassessment is pretty superficial. In all the spheres of our existence, from interpersonalrelations to political choices, consciously or not, we are constantly trying to place oursingular experiences in a time framework. To argue that history is indispensable is just




another way of saying that what is valid for us as individuals is also important for us asmembers of a society. History is a collective memory, a warehouse of experiencesthrough which men develop a sense of social identity so as to cope with the challengesthat will appear in the future. (Tosh, 1984, pp. 3–4)

6) Identity

Now we have arrived at the last of what in my path have been the key words for

our profession. Since we have come together here for a conference of the

European Business History Association, allow me to use the European firm as my

base. Does the European firm exist? Does it have an identity different than that of

the US firm of the ‘American century’ which usually serves as the reference for

comparison?

I am inclined to answer yes to that question, using history as a basis for my

considerations. The identity of the European firm is based on four elements:

cartels, family firms, the Gerschenkronian substitutive factors, and the role which

workers play. I am well aware that the evaluation of cartels is very complicatedand that it is difficult to distinguish between American administrative efficiency

and European contractual cooperation, as Chandler did in an essay published in

1982 in the European Economic Review. History is not so ‘black and white’. I

believe, however, that when you use a long-term outlook, it is impossible to deny

that the cooperative approach is much more pronounced in Europe than in the

US. And this cooperative approach, in turn, is one of the causes for the smaller

dimensions of European firms, and so for the continuation of family control and

management, which has important implications for social relations in those

contexts. In The competitive advantage of nations, Michael Porter made the

observation for most Italian entrepreneurs, the firm is the family. It is impossibleto shut down the family!

An impact no less important when compared to the former actors (cartels and

family business) was covered by the so-called Gerschenkronian substitutive

factors: the universal bank that also aims at coordinating key companies and

sectors, and, above all, the State, the State as entrepreneur which in Southern

Europe played a decisive role in creating the basis for industrial growth and is

present in all corners of Europe where Colbert has never been forgotten. And,

finally, let us remember the role played by workers. Fat, happy and ‘without a

worry’, as the American model of Ford would have them? Or the workers of

German co-determination or of the models based on conflict that are so diffuse in

Italy and France? In the end, cartels, family firms, Gerschenkronian factors and

worker participation, all are part of a sort of genetic code of the European firm

which does not really position us well for competition brought on by

globalisation, but that certainly we cannot ignore; maybe, when they are inserted

and adjusted in a real process of unification we will find them to be one of our

strengths. But this topic starts to move me away from the terrain I know. This is

a field belonging to policymakers – though I do consider it one of our duties as

historians to remind them of these elements.

Let me conclude my remarks this afternoon with a forward-looking comment: I

will be very pleased if young scholars exploring the field of business history today

and in the future find the key words I have proposed to be useful. They are theproduct of my own experience in a discipline that has grown tremendously since the

1970s when I decided that business history would be my calling.

154 F. Amatori



Notes on contributor

Franco Amatori is Head of the Institute of Economic History at Bocconi University in Milan.He specialised in business history at Harvard Business School as a student of Alfred Chandler.He has written extensively on Italian business history. Together with Chandler and TakashiHikino he edited Big business and the wealth of nations (Cambridge University Press, 1997).

With Geoffrey Jones he was co-editor of Business history around the world (CambridgeUniversity Press, 2003). In the period 2000–2001 he served as President of EBHA, theEuropean Business History Association.

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