CEOs, Clerks, Computers, and the Rise of Competition in the Late 20th Century

Q3 2004

Business Review — A new era of heightened creative destruction that began in the late 1970s also ushered in a new era of heightened competition. Such intensified competition has made leaders of large industrial enterprises vulnerable to a level of uncertainty previously reserved for managers of small and new firms.

Consequently, managerial careers now less often have benign endings. In addition, CEOs have become less reliable servants of the corporation. The story was much different during the previous 100 years. From the 1870s to the 1970s, the large industrial corporation was highly stable. Its stability was derived, in part, from investments in a corporate structure that centered on a sales and administrative staff. In this article, Leonard Nakamura argues that the electronics revolution of the 1970s sharply reduced the value of this corporate asset and made corporations more susceptible to competition.

This article appeared in the Third Quarter 2004 edition of Business Review.

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