Activist management : the institutional economics of Henry S. Dennison

Henry S. Dennison was a progressive Boston business man and economic analyst who, in both his private and public activities in the first half of the twentieth century, demonstrated an activist concern with the place and character of the modem business organisation, the control and management of these bodies and their human and non-human constituents, and the impact of the capitalist business cycle on wider society. The central contention of the thesis is that Dennison was both deeply influenced by, and made an important contribution to the institutionalist 'school' of economic thought. It is contended that in his reorganisation of the family company to remove absentee owners and in his concern with inherited traits and habits of thought and their impact on human motivation, the impact of Thorstein Veblen is salient. It is demonstrated that in his theoretical inquiry into the rationale and inner logic of business firms that he was one of the first organisational or management economists. That his labour economics and industrial democracy initiatives were applauded by John R. Commons who visited Dennison, and in later writings placed him at the end of an intellectual lineage from Marx to Veblen, from Veblen to F.W. Taylor, and from Taylor to Dennison, in terms of the latter's intuitive understanding of the labour process and its place in 'managerial transactions'. It is also demonstrated that Dennison also worked closely with other recognised leaders of the institutionalist approach, namely Wesley Mitchell and Edwin Gay, particularly on business cycles, which resulted in Mitchell embracing a micro-based conception of smoothing business cycles at the level of the firm. And it is demonstrated that in his intellectual relationship with John Kenneth Galbraith, he was a major influence on the latter's economic thought especially Galbraith's concern with management and the corporation. Dennison's place in the institutionalist rubric is further vindicated by his lifelong advocacy of economic planning, both micro and macroeconomic, by his dissatisfaction with mainstream economics particularly its ignorance of the inner workings of the firm and its simplistic view of human motivation, by his activist involvement in public life and his concomitant belief in the need for institutional intervention to correct market failure, by his interest in the corporation and the power of management and owners, and finally, by his personification of the nexus between economics and management. His lifelong interest in management issues foreshadowed the rise of management - as opposed to managerial - economics and the recent 'conversation' between the evolutionary variant of institutional economics and strategic management.