Organizations and Markets

Organizational Charts from 1915

17 June 2008 at 12:21 pm Peter G. Klein 6 comments

| Peter Klein |

These images come from Frank Fetter’s second principles treatise, his Economic Principles (1915), which included chapters on “Enterprise” and “Management.” Note that at the top of the hierarchy sits the “enterpriser,” a term Fetter borrowed from Frederick Hawley), instead of “entrepreneur” or “adventurer,” both of which were then in common use to describe the business person. (Adventurer meant simply “one who undertakes a venture.”) Hawley preferred enterpriser because it suggested not simply management, but “responsibility,” or “the subjection [of one’s actions] to the results of production” (Hawley, 1908, p. 470). This is essentially the concept of entrepreneurship proposed in recent Foss-Klein papers (some of which you can find here), namely judgmental decision-making about the deployment of resources in the face of Knightian uncertainty.

I like how the figure below identifies stockholders as enterprisers. My view that corporate shareholders are entrepreneurs, in the functional sense described above, is usually met with polite curiosity at best, bewilderment or scorn at worst. Maybe I should have been writing in 1915.

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