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Information processing in the theory of the firm: the rise of General Motors

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Author Info
SETH NORTON

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Abstract

This article reviews alternative theories of the firm and their relationship to the spectacular rise of General Motors during the 1920s. The article examines the degree of synchronization of GM’s sales to dealers with dealers’ sales to final consumers, both before and after Alfred Sloan’s forecasting and information processing reforms. It also examines the link between the synchronization and GM’s performance during the period. The data document a dramatic improvement in GM’s information processing capabilities and a direct link between those capabilities and GM’s profitability.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal International Journal of the Economics of Business.

Volume (Year): 11 (2004)
Issue (Month): 2 (July)
Pages: 123-140
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Handle: RePEc:taf:ijecbs:v:11:y:2004:i:2:p:123-140

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Related research
Keywords: General Motors; Firms; Information; Forecasting; Performance; Vertical Integration; JEL Classifications:  D2; D8; L6;

References listed on IDEAS
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  1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-95, December. [Downloadable!] (restricted)
    Other versions:
  2. Robert Wilson, 1975. "Informational Economies of Scale," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 184-195, Spring. [Downloadable!] (restricted)
  3. Casadesus-Masanell, Ramon & Spulber, Daniel F, 2000. "The Fable of Fisher Body," Journal of Law & Economics, University of Chicago Press, vol. 43(1), pages 67-104, April.
  4. Masten, Scott E, 1988. "A Legal Basis for the Firm," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(1), pages 181-98, Spring.
  5. Rubin, Paul H, 1978. "The Theory of the Firm and the Structure of the Franchise Contract," Journal of Law & Economics, University of Chicago Press, vol. 21(1), pages 223-33, April.
  6. Spiller, Pablo T, 1985. "On Vertical Mergers," Journal of Law, Economics and Organization, Oxford University Press, vol. 1(2), pages 285-312, Fall.
  7. Coase, R H, 2000. "The Acquisition of Fisher Body by General Motors," Journal of Law & Economics, University of Chicago Press, vol. 43(1), pages 15-31, April.
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This page was last updated on 2009-11-25.


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