Hugo van Driel

Path dependence, initial conditions, and routines in organizations: The Toyota production system re-examined

The notion of path dependence was first explicitly used to explain prevailing technical standards (David 1985; Arthur 1989). It has also been discussed in recent decades as a useful way of analysing the development of a range of other subjects, including national innovation systems (Iammarino 2005), industrial districts (Kenney and von Burg 1999) and politics (Pierson 2004). For a long time, at the micro-level of individual organizations a much less elaborate use of the concept has been made (with the notable exception of David 1994) and it is only recently that interest in this field of application has expanded further (for example, Sydow et al. 2005). I argue that using path dependence for the historical analysis of organizational change can be very fruitful. To do so, however, the key elements of path dependence — sensitivity to initial conditions and lock-in mechanisms — need to be conceptualized more precisely and linked to one another.

Towards a new business history

This article calls for a discussion about business history research. We advocate that the current typical approach in business history – dominantly case study analysis – maintains its prominent position, but the purpose and relevance of this type of research in the scientific method for business history is made more explicit. Moreover, the article proposes the application of additional approaches in business history, which specifically aim to develop theory and test hypotheses. These approaches are well established in the social sciences, but require adaptation to the particular needs of business history. The purpose of this article is to argue that opportunities for scientific explanations in business history are enhanced by engagement with the circle of knowledge creation where theory is confronted with empirical evidence and empirical observations feed back into theory formation.

Collusion in transport: group effects in a historical perspective

This paper considers non-economic factors involved in the occurrence and sustainability of collusion. Group development among executives of incumbent firms created during the evolution of an industry can stimulate collusion, even in the uncertain introduction stage of a new industry. Certain social conditions and social characteristics of executives related to the industry characteristics of entry barriers and geographical structure help to explain differences in group development relevant to collusion. A historical analysis of four transportation industries illustrates the manner in which the non-economic factors operate.

A co-evolutionary analysis of longevity: Pakhoed and its predecessors

In this study of the warehousing company Pakhoed and its predecessors over a period of 200 years, we analyse the configuration of environmental forces, exploitation and exploration, and three firm-level longevity factors: a tolerant management style and decentralised structure; a strong sense of identity; and a conservative financial policy. The idiosyncratic set-up of Pakhoeds forerunners enabled their long-term survival through co-evolution with an environment that both compelled them to be responsive and provided them with scarce resources. In the most recent period, failed explorations helped Pakhoed to strengthen its sense of identity and to focus on a well-chosen field of exploitation.

Imprinting, Path Dependence and Metaroutines: The Genesis and Development of the Toyota Production System

The notion of path dependence was first explicitly applied in the field of economics, in particular to explain the persistence of certain technologies and standards (David, 1985; Arthur, 1989). It has been discussed in recent decades in other disciplines as well, and has been found to be a useful way of analyzing a range of subjects. The concept has become particularly popular in sociology and political science, often aiming to explain institutional development (Pierson, 2004; Mahoney, 2000). At the micro level of individual organizations much less use of the concept has been made so far, with the notable exception of David (1994). Only recently has the interest in this field of application expanded (e.g., Sydow et al., 2009). Applying the idea of path dependence to the analysis of organizational change raises major theoretical issues, however. We illustrate this with a re-analysis of the origin and development of the Toyota Production System.

The Role of Middlemen in the International Coffee Trade since 1870: The Dutch Case

The degree of involvement of middlemen in the trade channel is usually, implicitly or explicitly, explained by a functional argument. In other words, the role of middlemen is determined by their economic value for sellers and buyers. In the pre-industrial era the circumstances for involvement of middlemen in (international) trade were very favourable: industry was widely dispersed, the means of communication and transport were poor, and both production and transport were of a seasonal nature. Consequently, the middlemen prospered. However, the actual or perceived cutting out of middlemen has become a common theme in the literature since the industrial revolution. In particular in international trade, the position of middlemen has become vulnerable: the modernisation of transport, communication, trade practices, and production is supposed to have stimulated the displacement of intermediate traders. Several economic historians and (contemporary) economists have suggested that there has been a general trend of closing the gaps between conditions of supply and demand in international trade from the nineteenth century on. Fundamental improvements in classification and gradations of products, in transport and communication and the scaling up of trade flows are mentioned as the underlying causes. Consequently, independent middlemen lost their positions as intermediators between sellers and buyers. To explain the involvement of middlemen by means of their function is a complicated matter because they fulfil different needs at the same time. Several recent studies stress the adaptability and creativity of trading firms in escaping the fate of displacement by changing their forms and functions, including diversification. This article sheds light on the relative importance of the functions performed by middlemen by a study of one particular group of middlemen: the importing countries’ traders operating in the international trade in raw coffee (also called green coffee), from 1870 until the present. In order to keep this (detailed) study manageable, it focuses on the case of the Dutch traders. Such an approach permits us to identify changes in the conditions that determine the position of middlemen in the trade channel in a systematic way. From a functional perspective, a study of the trade in a raw agricultural material like coffee is of special interest because of the large difference in the economic need for middlemen occurring in subsequent periods of time. Particularly in this kind of trade, the gaps between the conditions of supply and demand were large originally: the middlemen had a lot to lose.

Co-operation in the Dutch Container Transport Industry

During the last 25 years, co-operation within the Dutch container transport industry has served in various ways as Q means of reducing rkk. Co-operation has been aimed chiefly at reducing financial risks, pooling financial resources, and regulating com- petition. In most cases, a direct solution of the problem of match- ing supply and demand has not been an important motive for CO- operation. In the early days of containerisation, industry culture was facilitating co-operation in liner shipping more than in the stevedoring and road haulage industries.

Europeanisation and Americanisation: Converging Backgrounds of German and Dutch Top Managers, 1990–2005

The extensive academic debate on the rise of the European Firm reveals a recurring paradox. Most scholars agree that the image of diversity is the most distinctive characteristic of the European Firm. However the concept of diversity is, by definition, hard to define and tends to elude attempts to distinguish common characteristics of European companies.1 To provide empirical evidence for the existence or the rise of the European Firm thus poses the paradoxical question for researchers of whether common or diverging characteristics across European companies should be investigated. We adopt a comparative approach and investigate if and how executive boards of leading German and Dutch companies converged with respect to the nationality and educational backgrounds of their members in the period 1990–2005. In this period, globalisation and internationalisation, in particular by virtue of the liberalisation of the European market, are expected to have influenced firms fundamentally. We believe a study of possible “convergence within European boundaries” from the perspective of the executive boards provides new insights and contributes to the debate on the rise of the European Firm.

Memory and learning: Selecting users in the port of Rotterdam, 1883–1900

During the closing decades of the nineteenth century, the port of Rotterdam experienced very strong growth. Changing views and concrete experiences induced the port to widen the initially limited circle of regular users of berths. We study this case in order to increase our understanding of the dynamic interrelationship between organisational memory and learning. While organisational memory guides the application of routines, this practical experience may also question underlying beliefs. Our study of deliberations by the Rotterdam government – to a significant degree representing the preferences of the local business elite – demonstrates how so-called lower order learning on the level of routines induces a so-called higher order learning on the level of beliefs. Finally, our case-study suggests that the traumatic nature of initial experiences that are part of organisational memory may hinder the deliberation of beliefs and thus retard higher order learning.

Testing the Chandler Thesis: Comparing middle management and administrative intensity in Dutch and US industries, 1900–1950

This article tests Alfred Chandlers thesis that the managerial revolution, that is, the building of managerial hierarchies, clustered in a selected set of industries where the need for co-ordination was particularly high. These fast-growing, capital-intensive, and high-volume producing industries are denoted as Chandlerian industries. We compare the latter with the other industries in the Netherlands and the USA using census data covering the first half of the twentieth century. The comparison reveals that administrative intensity, measured by the proportion of administrative employees to production workers (A/P-ratio), was clearly higher than average in the US Chandlerian industries in the sample used only from c. 1920, considerably later than Chandlers account suggests. In the Netherlands, the A/P-ratios of Chandlerian industries were considerably higher in all three reference years, but the more specific middle managers to workers ratio (MM/W-ratio) only in the middle one (1930). We conclude that differences in the need for co-ordination between industries in the Chandlerian sense are relevant for explaining the pattern in administrative intensity, but suggest that – given the high variety in scores on the A/P- and MM/W-ratios within the category of Chandlerian industries – one should take into consideration additional criteria in further exploring the ‘logic’ of the managerial revolution. Finally, in particular outside the USA, more consistent differences in administrative intensity between Chandlerian and non-Chandlerian industries are perhaps to be found only in the period after World War Two.