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Firm structure and financial performance: the Lancashire textile industry, c.1884 - c.1960

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  • David Higgins
  • Steven Toms

Abstract

Recent business history has been much concerned with the relationship between organization structure and competitive advantage. Using an archetypal case, the decline of the export-led British cotton industry, the contention that the vertically integrated, professionally managed firm has been an important pre-condition for the creation of international competitive advantage during the twentieth century is subjected to scrutiny. This is achieved by a long-run comparison of accounting-based financial performance indicators. Evidence suggests that vertical specialization was a superior form of business organization. Explanations for this lie in the evolution of technology, a conflict between production and marketing in integrated firms, but, above all, in market signals which repeatedly informed entrepreneurs that specialization worked. In drawing such conclusions we differ fundamentally from previous interpretations of the rise and fall of Lancashire textiles.

Suggested Citation

  • David Higgins & Steven Toms, 1997. "Firm structure and financial performance: the Lancashire textile industry, c.1884 - c.1960," Accounting History Review, Taylor & Francis Journals, vol. 7(2), pages 195-232.
    • Handle: RePEc:taf:acbsfi:v:7:y:1997:i:2:p:195-232
    DOI: 10.1080/095852097330711
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    References listed on IDEAS

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