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H-NET BOOK REVIEW
Published By H-Business@msu.edu (August, 1995)
Robert Fitzgerald. ROWNTREE AND THE MARKETING REVOLUTION, 1862-1969.
London: Cambridge University Press, 1995. Pp. xix + 737 (Illus.) ISBN 0 521
43512 9.
Hardcover. $150.
Reviewed by John F. Wilson, University of Manchester, for H-Business
<MFSSTJW@fs1.art.man.ac.uk>.
A book replete with mentions of childhood favourites as `Kit Kat',
`Aero' and `Smarties' is bound to raise some interest within even the
most cynical of business historians who regard commissioned case-
studies with great suspicion, but to be fair to Dr. Fitzgerald this
is much more than a broad survey of a famous company history laced
with fancy illustrations of old publicity material. Indeed, the
analysis is well-founded on a series of key themes which are amply
addressed through the use of extensive primary records, detailed
references to other secondary sources, and even economic theory (in
particular transaction cost theory).
The main theme, evident from the book's title, is how the famous York
confectionary firm of Rowntree developed its marketing techniques,
and it is interesting to note that only after the family manager-
owners had been replaced in 1931 that professional executives were
able to introduce new ideas about the Rowntrees had been skeptical.
Marketing weaknesses had actually been one of the main reasons why
since its foundation in 1862 Joseph Rowntree's firm had remained a
relatively small-scale producer compared with its major rival,
Cadbury, but under George Harris from 1931 major progress was made as
the firm woke up to the possibilities in the techniques so
successfully employed by other chocolate makers. This supports the
criticisms of family management made by A.D. Chandler, although in
tackling the issue Dr. Fitzgerald is more concerned with emphasizing
how up to 1931 Rowntree was actually a well-managed firm with an
adequate organization.
In addressing the general debate about British business organization,
Dr. Fitzgerald pays particular attention to another theme of the
book, he existence of a `chocolate' corporate culture which extended
to the other two large firms, Cadbury and Fry. This culture had two
principal characteristics, efficient production and management, and
service to the community, and building on his previous publications
Dr. Fitzgerald provides illuminating evidence of how from the
1890s Seebohm Rowntree (as the country's first labour director) was
able to create and nurture an internal labour market using welfarist
strategies. Of course, Rowntree and Cadbury were well known as
paternalistic employers, but as Dr. Fitzgerald explains such labels
are misleading, and greater concern ought to be paid to how firms
matched the needs of efficient production and management with labour
market vagaries and trade union influence. The sections on how
Rowntree introduced scientific management deserve careful reading bu
anybody interested in such issues, because they provide incisive
material for a frank assessment of labour management trends in the
pre-1939 era.
A third prominent theme of this history is the development of
multinational strategies, particularly under the chairmanship of
Lloyd Owen after 1957, but in fact originating in the interwar years.
The termination of price-fixing agreements by government action and
intensifying competition spurred Rowntree into the creation of many
`little Yorks' in the 1950s and 1960s, and separate chapters are
provided to study the ventures in the USA, Europe and South Africa.
This reveals how Rowntree evolved from a family firm into a major
global player, and for this reason by 1969 a merger with another
British rival, Mackintosh, had been arranged in order to strengthen
its base.
There is consequently much to be gained from reading this
commissioned history, and clearly Dr. Fitzgerald has not suffered
unduly from company or family interference in his research. At the
same time, it is only fair to mention several weaknesses which might
detract from the book, in particular the failure to provide an
extensive analysis of the abundant financial material to which he has
evidently had access. For example, vital indicators like the return
on capital employed have not been calculated, and the reader is left
to work out the full implications of the long statistical appendices.
This would have been particularly helpful when analyzing the success
of multinational strategies, when after 1948 consolidated balance
sheets had to be produced. The 1969 merger is also inadequately
assessed, and one might have expected a more detailed analysis of the
general business scene as another reason why the two firms merged.
Likewise, the company's final decades, as well as its demise, when
acquired in a `dawn raid' by Nestle in April 1988, could have been
more thoroughly examined, but then after over 600 pages Dr.
Fitzgerald might have been exhausted. Finally, while reference to
such techniques as transaction cost analysis has been made, no
quantitative work is conducted to explain whether Rowntree achieved
its aims in reducing any of its costs as a result of
multinationalisation.
Having noted these relatively minor quibbles, it is important to
reiterate the general view, that this is a most impressive business
history which deserves a wide audience. Dr. Fitzgerald must be
credited with a significant achievement in harmonizing the case-study
treatment with a range of other issues, and reading lists would be
the poorer if they did not include references to the book under any
of its major themes.
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