Leading Manufacturing Sectors in the USA and Japan During 1899-1937 and Organizational Innovations: Embeddedness for Corporate Strategy

Organizational innovations (OIs) such as scientific management, integration of mass production and mass distribution, and particular types of corporate governance played a preponderant role in the economic development of the USA during the period 1880s to 1920s. To provide some further evidence of this role, historical data analyzed by Kuznets (1971) are scrutinized in this paper by calculating total factor productivity (TFP) for manufacturing sectors in the USA, and the impact of OIs on leading sectors is briefly explored in the light of these TFPs. Thus this paper provides quantitative evidence that leading sectors are linked with OIs during the examined period. In the light of this evidence the following proposition is made: leading sectors and OIs can be considered as a process of ‘embeddedness’ (Granovetter, 1985) for corporate strategy, governance, and leadership.