What Do Bosses Really Do?

Abstract

If employers make so much money, why don't workers hire machines and expertise and make the money instead? This question has generated a large body of writing, including Stephen Marglin's much-cited article “What Do Bosses Do?” Marglin draws on history to argue that the employer, who added nothing to technical efficiency, used specialization of tasks to divide labor and impose himself as boss, thereby creating an artificial, unproductive role. These arrangements were embodied in domestic industry and were reinforced when employers turned to the factory system as a more effective disciplinary mode. This article argues that such a thesis misreads history and is essentially ideological.

Strategy as economics versus economics as strategy

“…Think about historian Landes (1986) explaining the factory system, or any number of examples in management.…”

The Firm as a Dedicated Hierarchy: A Theory of the Origin and Growth of Firms

“…University of Chicago, NBER, and CEPR Notes 1 There is a large literature that discusses this problem (see, for example, Williamson [1975], Cheung [1982], Landes [1986], Liebeskind [1996], Rumelt [1987], Teece [1986], Mailath and Postelwaite [1990], and Rebitzer and Taylor [1997]). Teece [1986] proposes that a firm mitigates expropriation by owning a set of complementary assets that are critical to production while Rebitzer and Taylor [1997] argue that law firms reward those with the highest threat of expropriation with higher rents.…”

The Coevolution of Technology and Organization in the Transition to the Factory System

“…Efficiency Williamson (1980) Landes (1986 Exploitation Marglin (1974) Marx (1867) Figure 1 Along the horizontal dimension lies the issue of origins: did the factory system emerge because of its organizational form, or did it spring from new technology, notably centralized motive power? Along the vertical dimension is the issue of raison d'être: did the factory system emerge because it was more efficient than what went before, or did it emerge because capitalists found themselves able to use factory organization as a mechanism for worker exploitation?…”

“…But they see that system as emerging because of greater efficiency, which they understand largely in terms of the minimization of transaction costs, especially the costs of material lost to embezzlement, the costs of coordinating a finely subdivided process, and the costs of monitoring product quality. Economic historians like Jones (1982Jones ( , 1987Jones ( , 1993 and Landes (1986) have criticized both Marglin and the transaction-cost theorists for a comparative lack of attention to history. And, despite all the arguments of a priori theory, history demonstrates, they assert, that it was the superior technology associated with centralized power sources that triggered the factory system.…”