Institutions and the Evolution of Modern Business

For more than thirty years a symbiosis has developed between the ‘new institutionalists’ and business historians, which stems from synergies in the interests of both groups. The central questions posed by Coase and Williamson, of why firms exist and grow, have found echoes in the historical work of Chandler on the forces leading to the rise of big business first in the United States and then in Europe. Conversely Williamson used Chandler’s historical evidence to give foundation to his development of transaction cost economics. The papers in this volume demonstrate that it can be fruitful to apply institutional theory to business history. In addition, the volume shows that the wider study of the institutional environment is inseparable from the study of business. It is clear, however, that although ‘institutionalism’ in business history has a long pedigree, many areas of research and potential interaction with theory remain to be explored. The extent to which this will occur inevitably depends upon the degree to which the interests of theoreticians serve the needs of historians and vice versa.
The contributions to this volume, by moving beyond the analysis of the internal organisation of firms to interrelationships within and between institutions, moves the debate forward and points to the potential for new theoretical developments which would facilitate the study of networks moving them from the periphery of institutional theory to the core a development which would significantly help business historians build conceptual models to make sense of the complexities of the past.