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Business Entrepreneurs, Their Major Functions and Related Tenets*

Published online by Cambridge University Press:  03 February 2011

G. Heberton Evans Jr
G. Heberton Evans Jr
Affiliation:
The Johns Hopkins University
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Extract

The author of the earliest general treatise on economics, writing in the middle of the eighteenth century, regarded the entrepreneur as a key factor in production. Later economists have in general had the same feeling, though they have not defined the word entrepreneur in precisely the same manner. By some the entrepreneur has been considered to be primarily a risk or uncertainty bearer, by others an innovator, by still others a superintendent or manager. The list could easily be expanded. The tendency for economists to emphasize now one and now another aspect of entrepreneurship derives, I believe, from several factors: the variations in the volume and nature of economic opportunities, the increasing size of the business unit, and the changes in the legal forms of business organization.

Type
Articles
Information
The Journal of Economic History , Volume 19 , Issue 2 , June 1959 , pp. 250 - 270
Copyright
Copyright © The Economic History Association 1959

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References

1 Cantillon, Richard, Esstd sur la nature du commerce en general (London: Fletcher Gyles, 1755), PP. 62 ff.Google Scholar, or Higgs's, Henry edition of the Essai (London: Macmillan & Co., for the Royal Economic Society, 1931), pp. 47 ffGoogle Scholar.

2 Ibid

3 Bentham, Jeremy, Defence of Usury; Shewing the Impolicy of the Present Legal Restraints on the Terms of Pecuniary Bargains (London: printed for T. Payne, and Son, 1787), Letter XIII, particularly p. 145Google Scholar.

4 Mill, John Stuart, Principles of Political Economy with Some of Their Applications to Social Philosophy (London: John W. Parker, 1848), Vol. I, Book II, ch. xv, §1, pp. 478–79Google Scholar.

5 Most current definitions are closely tied in with the ideas of the late Schumpeter, Joseph A.. See his The Theory of Economic Development, translated from the German by Redvers Opie (Cambridge, Mass.: Harvard University Press, 1949) pp. 74 ffGoogle Scholar.

6 Nevins, Allan (in collaboration with Frank Ernest Hill), Ford: The Times, the Man, the Company (New York: Charles Scribner's Sons [1954])Google Scholar. See particularly pp. 260, 272, 275-77, 282-83, 324. 327, 328, 332-33. 335. 337. 339. 350

7 Harold, TPasser, C., The Electrical Manufacturers, 1875-1900: A Study in Competition, Entrepreneurship, Technical Change, and Economic Growth (Cambridge, Mass.: Harvard University Press, 1953), pp. 82, 176–81, 86Google Scholar.

8 Cochran, Thomas C., Railroad Leaders, 1845-1890: The Business Mind in Action (Cambridge, Mass.: Harvard University Press, 1953), p. 432 (letter of Charles Elliott Perkins to J. M. Forbes, June 29, 1879)Google Scholar.

9 Ibid., p. 433 (letter of Charles Elliott Perkins to P. Geddes, Nov. 24, 1879).

10 Ibid., p. 436 (letter of Charles Elliott Perkins to J. M. Forbes, Jan. 29, 1884).

11 Longstreet, Stephen, A Century on Wheels: The Story of Studebaker (New York: Henry Holt & Co. [1952]). See particularly pp. 40, 44, 47, 48, 54Google Scholar.

12 Ibid., particularly pp. 90, 91, 94.

13 Compare a passage in , Passer, Electrical Manufacturers, p. 249Google Scholar.

14 Ibid., pp. 218-19, 222.

15 Ibid., pp. 31, 33, 66-67.

16 Ibid., p. 67.

17 Ibid., pp. 181, 184-85.

18 Walker, Francis A., Political Economy (New York: Henry Holt & Co., 1883), pp. 244 ff.Google Scholar, defined the term entrepreneur in much the same way that I do; the major difference is that he regarded pricing as one of the chief entreprenurial activities. My definition was formulated independently on the basis of study of company histories and biographies of business leaders.

19 Williamson, Harold F. and Myers, Kenneth H., II, Designed for Digging: The First 75 Years of Bucyrus-Erie Company (Evanston, III.: Northwestern University Press, 1955), p. 185Google Scholar.

20 Nevins (with Hill), Ford, ch. xxii. See also Nevins, Allan and Hill, Frank Ernest, Ford: Expansion and Challege, 1915-1933 (New York: Charles Scribner's Sons [1957]), ch. xv–xvii, inclusiveGoogle Scholar.

21 , Passer, Electrical Manufacturers, p. 173Google Scholar.

22 Ibid., p. 175.

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25 Ibid., pp. 127-31.

26 Hidy, Ralph W. and Hidy, Muriel E., Pioneering in Big Business, 1882-1911: History of Standard Oil Company (New Jersey) (New York: Harper & Brothers [1955]), p. 182Google Scholar.

27 , Longstreet, A Century on Wheels, p. 118Google Scholar.

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29 For information on this company, see , Williamson and , Myers, Designed for Digging, pp. 173–89Google Scholar.

30 Carnegie, Andrew, Autobiography of Andrew Carnegie (Boston and New York: Houghton Mifflin Co., 1920), p. 226Google Scholar.

31 Drucker, Peter F., Concept of the Corporation (New York: The John Day Co. [1946]), pp. 220–21Google Scholar. Here it is contended that General Motors in the twenties adopted this policy for the reason indicated.

32 , Hidy and , Hidy, Pioneering in Big Business, p. 297Google Scholar.

33 The figures were computed from data in Moody's Manual of Investments, Industrials Volume for 1942, p. 2856 and ibid., Industrials Volume for 1954, pp. 2580 and a2.

34 From a mimeographed copy of Greenewalt's speech to the National Press Club, Sept. 29, 1949, p. 4.

35 For a fuller development of the ideas sketched in this section, see my paper presented to the Economic History Society, Cambridge, England, Apr. 1957, entitled “A Century of Entrepreneurship in the United States, with Emphasis upon Large Manufacturing Concerns c. 1850-1957,” Explorations in Entrepreneurial History, Vol. X, No. 2 (12 1957)Google Scholar.

36 See Ivory, 75, a pamphlet published by the Procter & Gamble Company in June 1954 to celebrate the first 75 yean of Ivory Soap's history.

37 , Hidy and , Hidy, Pioneering in Big Business, pp. 37–38Google Scholar. This action was taken in 1878; the policy was reversed in 1888 (ibid., p. 182).

38 , Longstreet, A Century on Wheels, particularly pp. 13, 29–30Google Scholar, 40, 44, 47, 48, 54.

39 Thornton, Harrison John, The History of the Quaker Oats Company (Chicago: The University of Chicago Press [1933]), particularly pp. 69, 90–92, 152Google Scholar.

40 , Carnegie, Autobiography, pp. 220 ffGoogle Scholar.

41 For General Motors, see The Annalist, XVI (08 2, 1920), p. 132Google Scholar; for the A. & P., see Dewing, Arthur Stone, The Financial Policy of Corporations (New York: The Ronald Press Company, 1926), rev. ed, pp. 696–97, note qGoogle Scholar.

42 , Dutton, Du Pont, pp. 185, 261Google Scholar.

43 See below the subsection entitled “Absorption of Going Concerns for Rapid Growth.”

44 For example, see Williamson, Harold F., Winchester: The Gun That Won the West (Washington, D.C.: Combat Forces Press [1952]), first ed., pp. 253 ffGoogle Scholar.

45 Investor's Reader, 01 22, 1958, pp. 21Google Scholar ff. The history of The General Tire & Rubber Company provides a quite similar illustration; in December 1942 that company, with interests indicated by its title, purchased The Yankee Network, a radio chain broadcasting through stations in the New England states. (See Moody's Manual of Investments, Industrials Volume for 1943, p. 1143Google Scholar.) General Tire's Annual Report for 1942 gives the impression that a major factor in the purchase of the radio chain was “the ever-growing demand for radio time.”

46 , Dutton, Du Pont, p. 279Google Scholar.

47 For a full discussion of this Winchester episode, see , Williamson, Winchester, ch. xxi–xxviii, inclusiveGoogle Scholar.

48 , Passer, Electrical Manufacturers, pp. 233–34Google Scholar.

49 , Dutton, Du Pont, p. 185Google Scholar; see also p. 261.

50 For a description of this period of expansion, see ibid., pp. 275-78.

51 Ibid., p. 175.

52 Moody's Manual of investments, Industrials Volume for 1935, p. 1687Google Scholar.

53 See, for example, , Dutton, Du Pont, pp. 186–89Google Scholar.

54 Investor's Reader, Nov. 13, 1957, p. 24, but see also pp. 21 ff.

55 See Wilson, Charles, The History of Unilever: A Study in Economic Growth and Social Change (London: Cassell & Co. [1954]), I, 258Google Scholar; Part IV of Vol. I of Wilson's study describes the crisis in Lever Brothers brought on largely by extensive diversification moves.

56 Investor's Reader, 01 8, 1958, p. 19Google Scholar.

57 Ibid., Dec. 25, 1957, pp. 22-23.

58 For several references to this problem in Standard Oil, see , Hidy and , Hidy, Pioneering in Big Business, pp. 188, 298-99, 301, 383, 384Google Scholar.

59 , Nevins (with Hill), Ford, p. 344Google Scholar.

60 Ibid., p. 345.

61 Ibid., pp. 403, 509.

62 , Passer, Electrical Manufacturers, p. 177Google Scholar.

63 Ibid., p. 219.

64 For a few references to Ford prices, see , Nevins (with Hill), Ford, pp. 260Google Scholar, 337-38, 489, 511; many parts of that book are devoted to the efforts to cut costs.

65 , Dutton, Du Pont, pp. 29–30Google Scholar.

66 From a seminar at The Johns Hopkins University.