By Naomi R. Lamoreaux, Daniel M. G. Raff
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Extra info for Coordination and Information: Historical Perspectives on the Organization of Enterprise
Speeches by factory managers and their technical support staff to the annual production meetings of the Society of Automotive Engineers show actual decision makers addressing their colleagues on the subject of compensation s p tems and articulating precisely the germ of the logic advanced here. In the 1923 meetings, for example, the supervisor of time study at the Chandler Motor Car Company of Cleveland said straight out that manufacturing conditions, as well as the manufacturing processes in the departments of a large plant, vary considerably and cause entirely different problems to arise (Bouton 1923, 380-81).
Unfortunately, the Bureau of Labor Statistics reports cited above cannot be used for this purpose: the reports’ authors guarded the identities of the plants and firms they described extremely carefully. Without knowing which was which, there is no hope of associating compensation systems with production strategies. This defect is worse in the widely cited studies of the National Industrial Conference Board, which provide even less detail about firms and their i n d u s t r i e ~ There . ~ ~ is in fact no really satisfactory broadly based source of data.
3o Such a gap in the argument might undermine its appeal. 31 Economists have traditionally identified firms with production possibilities-that is, with possible Economists take the market for granted. This would strike any businessman as bizarrely abstracted. Businessmen organize production. They takt finding “markets” to be a big part of their job. So they identify their enterprises not with outputs but with needs and with the resources and capabilities to meet them distinctively well. Businessmen thus identify the firm not with what they could purchase, turnkey, in competitive factor markets, but rather with what is either unique or developed through (collective) experience within their firms.