Who managed large corporations during the first half century of their emergence? What role did engineers play in the management of large corporations?
Business historians have emphasized how a newly professionalized managerial elite took charge of corporate operations in the late nineteenth and early twentieth centuries in order to rationalize and manage ever more complex technology, production, and distribution system. The conventional narrative, however, focuses on the function of managers rather than who they were, and the capabilities they possessed . It implicitly assumes that managerial and technical expertise are embodied in separate actors.
A paper1,2 published last month shows that professional engineers constituted the critical source of managerial expertise in the managerial revolution of circa 1870–1930.
Their authors use a new data set of nearly 50,000 engineers and their employment record in the global mining and metallurgical sector to conclude that:
- Engineers had a significant and ongoing presence in managerial positions since at least the 1870s.
- Their prevalence in management grew in the last decades of the nineteenth and first decade of the twentieth century, although we observe a relative decline in their participation by the 1920s.
- This temporal path coincided with broad changes in firm size and organization, where the largest firms tended to employ more engineers, but engineer’s relative presence in managerial positions tended to decrease in the larger, more consolidated firms relative to the presence of nontechnical managers.
- Evidence suggests that the patterns and tendencies observed in mining and metallurgical sectors likely held across other engineering fields, as well as in other business sectors.
- Engineers continued to occupy both middle management and leadership positions throughout the twentieth century. In mining, engineers continued to fill the vast majority of middle management and many general management positions.
- The managerial revolution was not a uniquely or even initially an “American” phenomenon, but it was common across globally situated Anglo-American enterprises.
- The emergence of professional engineering preceded the professionalization of management, and owners found the expertise to build and manage large corporations among the ranks of the technically trained.
It is no surprise that many engineers pursued management careers from the earliest years of the modern profession.
Not surprisingly, in 1921 Thorstein Veblen concluded that the chances of anything like a Soviet in America, therefore, were the chances of a Soviet of technicians. Although…
a Soviet of Technicians is not a present menace to the Vested Interests in America.”
What’s happening today you already know it.
(1) Solares, Israel G., and Edward Beatty. ‘Engineers & Corporate Management, ca 1870–1930: The Invisible Hand Redux’. Enterprise & Society, 27 January 2023, 1–26. https://doi.org/10.1017/eso.2022.57. Creative Commons CC BY 4.0
(2) Via my former colleague Javier Garcia Algarra, Engineer (and Historian)
Featured Image: Jackson Pollock, Miners