| Author(s): | Whisler, Timothy R. |
|---|---|
| Reviewer(s): | Bowden, Susan |
Published by EH.NET (April 2000)
Timothy R. Whisler. The British Motor Industry, 1945-94; A Case Study in
Industrial Decline New York: Oxford University Press, 1999. ISBN:
0198290748 Cloth Price $105
Reviewed for H-Business and EH.NET by Susan Bowden, University of Sheffield,
S.Bowden@sheffield.ac.uk
Four months after the publication of Whisler’s British Motor Industry,
BMW announced its intention to dispose of Rover. The publication of Whisler’s
assessment of the decline of the British motor industry would thus appear to be
well-timed. It is also against this announcement that readers will come to
Whisler’s book for an understanding of how and why this once dynamic industry
floundered.
The British Motor Industry is a welcome addition to the now voluminous
literature on the motor industry in the UK. Whisler’s has produced a “new”
synthesis which aims to place the declining fortunes of the industry into an
overall explanatory perspective. That perspective is grounded in economic
theories of path dependency and lock-in. His thesis is that strategy formed a
managerial lock-in which meant that despite the numerous structural and indeed
personnel changes in the industry over time, the industry was locked into a
prevailing ethos which failed to read the signals of changing market
conditions. The strategy was inherited from the original founder, Morris, and
was to pervade all subsequent manifestations of organizational form and
structure. Strategy was the outcome of a pervading if mis-calculated belief in
the innate superiority of the company’s products: all the company had to do was
make cars.
The thesis was originally set out by Roy Church in the Economic History
Review. In that sense, Whisler’s perspective is not new. What is new is the
detailed elaboration of how that ethos dominated managerial thinking.
Much of the book concentrates on the earlier formations of the company,
most notably events prior to the spectacular collapse of 1975. Chapters follow
a thematic approach detailing, inter alia, with design and development, product
quality and reliability, production methods, domestic and export markets and
distribution structures: all of which contain an immense amount of detail, but
all of which tend to focus more on the specifics of one firm rather than the
industry as a whole.
The problem with the path dependency, lock-in thesis, is that it can become a
retrospective self-justification for the problems of the industry,
especially when applied not, as in the usual case, to technology but to
managerial culture. Thus reference to the new literature on professional
lock-in might have helped – as it is some readers might feel confused as to
exactly how and why cultural lock-in should occur. Equally, readers from the
industrial, economics and managerial disciplines might question why reference
to market signals– most particularly why the strategy and culture did not
respond to changed signals–is not addressed by Whisler.
Thus we have references to issues of asymmetric information and transaction
costs, but such issues are never really fully explored. The role of the
financial markets, shareholders and Government – who were as much agents in
this story as management – is equally never fully assessed. The pages dealing
with divided issues, for example, relies on one source and fails to pick up the
relations between the company and its shareholders.
The issue of Government policy is particularly pertinent in this respect.
The news of BMW’s decision has been dominated by the “employment” question.
If one is to understand path-dependency then one has to look to game theory and
to bargaining between agents. A self-perpetuating ethos may be allowed to
continue, if the agent concerned has superior bargaining leverage.
Whilst Government’s prioritized employment in marginal constituencies (as motor
plants were located), then management was under no real pressure to effect real
change. This theme runs through the entire history of the industry–from the
first assessments of the future prospects towards the end of the Second World
War, to civil servants meetings under the Thatcher Regime and indeed to the
current Government’s reaction to BMW’s decision.
Dissecting and synthesizing the troubled history of the British motor industry
is not an easy task, and Whisler is to be congratulated for taking this on and
for producing a wealth of detailed analysis which makes an important
contribution to the literature. As the above makes clear, this reader would
have welcomed more–but surely an indication of a good book is that the reader
becomes engrossed and finishes wanting not less, but more.