Introducing the History of Marketing Theory

and Practice
Introduction
The global popularity of marketing as a subject for study might suggest that those
studying and teaching the subject know what it is that they are studying and how this
study should be undertaken. But as we shall see in this chapter and others in this book,
this has often not been the case. Marketing as a subject has proved almost
impossible to pin down, and there is little consensus about what it means to
study marketing. Most organizations now employ marketers. Marketing roles
were traditionally found in commercial firms, but increasingly all kinds of
organizations feel the need to employ marketers or to commission services
from marketing consultants.
Marketing, clearly, is probably as old as human civilization itself (see
Jones and Shaw, 2002; Minowa and Witkowski, 2009; Moore and Reid, 2008;
Shaw and Jones, 2005). For our purposes, we will restrict our attention to the
emergence of marketing as an academic discipline and business practice
early in the twentieth century.
Not all countries adopted key marketing practices at the same time as
they were discussed by US marketing scholars. Some countries like the UK,
for example, turned to formal marketing education relatively late, even if the
UK did have a number of companies and entrepreneurs who were naturally
marketing oriented fairly early, such as the confectionery manufacturer

Cadburys (Corley, 1987; Fitzgerald, 1989). Other countries, such as Spain,

underwent their own marketing revolution (Keith, 1960) even later.

The Early Development of Marketing Thought

In his important history of marketing, Bartels (1988) proposes that the
term marketing was first used as a noun, that is, as a label for a particular
practice,

sometime

between

1906

and

1911

(Bartels,

1988:

3).

Nonetheless, Bartels historical account has been challenged by scholars who

assert that there were people writing about the subject before 1906
(Brussire, 2000). In appraising the Publications of the American Economic
Association, Brussire found that the term marketing was actually used in
1897. Tamilia (2009), on the other hand, suggests that it was used even
earlier than this in the Quarterly Journal of Economics.
These examples are clearly taken from the academic literature. But it
was not just academics writing about the subject. For example, Shaw (1995)
notes that in Miss Parloas New Cookbook and Marketing Guide which was
published around 1880, marketing related to buying and selling activities.
This was not the only book using the term at this time or previously. Shaw
says that if we look at dictionaries prior to the Bartels statement the
intellectual history of the term marketing can be extended much further, all
the way back to 1561 (Shaw, 1995: 16).

On a related point, Dixon argues that The Oxford English Dictionary

traces the use of this term [marketing] to the sixteenth century; it certainly
did not originate in the United States between 1906 and 1911 (Dixon, 2002:
738). Nor should we think that marketing education originated in the United
States. In actual fact, the first courses were found in Germany at the turn of
the twentieth century (Jones and Monieson, 1990). Having said this, the
American Marketing Association and American marketing educational system
has obviously been very important in terms of the development of marketing
thought. As an anchor for the rest of the chapter therefore, consider the
changing definitions of marketing in the Box below. These definitions
illustrate how marketing as we know it has taken the shape it has.

The American Marketing Association and the Changing

Definitions of Marketing
Willkie and Moore (2006) tell us that there is one important issue that
we should acknowledge in the changing definitions of marketing inasmuch as
the definitions become more managerial over time. That is, less attention is
paid to the influence of marketing in and on society and more attention is
devoted to articulating the management function that marketing performs
inside an organization.
So, from the first definition of marketing provided in 1935, through to the
1985 and 2004 modifications, the definitions change from marketing being:
the performance of business activities that direct the flow of goods and

services from producers to consumers (1935). [To marketing as] the process
of

planning

and

executing

the

conception,

pricing,

promotion,

and

distribution of ideas, goods and services to create exchanges that satisfy

individual and organizational objectives (1985); [to marketing as] an
organizational function and set of processes for creating, communicating and
delivering value to customers and for managing customer relationships in
ways that benefit the organization and stakeholders (Wilkie and Moore,
2006: 227).
The problem with the last definition is that attention is focused on
marketing as an organizational activity there is no mention of marketings
role extending beyond those activities most closely associated with the firm.
Thus, by removing the societal emphasis that earlier scholars demonstrated
in their desire to improve marketplace efficiency, distributive justice,
standards of living and the distribution of products at lower prices, later
definitions in effect encourage people not to think about such improvements
in the marketing and distributive system as a whole, but simply focus on
those aspects relevant to an individual firm. It also assumes that individual
firm activities will in the aggregate be unproblematic.
As far as one of the most recent definitions is concerned, marketing
activities do not actually impact on wider society. It was the excessive
managerial emphasis of this definition that led to a series of heated
exchanges both online and in the Journal of Public Policy and Marketing.
Ultimately, the American Marketing Association went quickly back to their

drawing board, bringing out a new, updated definition that responded to the
criticism by scholars, so that the latest definition reads: Marketing is the
activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large (Lib, 2007).

Marketing, Efficiency and Utility Creation

Wilkie and Moore summarise the utilities added by marketing activities
in the following way (try thinking about these in terms of the 4 Ps of product,
place, price and promotion):
Marketing adds] form utility by (1) physically supplying essential inputs
to the production process and (2) providing insights from the marketplace
(e.g., market research) that help decide specific attributes for goods and
services. Place utility is clearly marketings province, representing the value
added by providing goods where buyers need them. Marketing adds time
utility through preplanning, inventory, and promotion activities to ensure
customers can obtain goods when needed. Finally, possession utility is
offered through marketing transactions and enables customers to use goods
for desired purposes. (Wilkie and Moore, 1999: 209)

Frederick in 1919:
Fredericks sales manager was concerned with product quality and new
product development as determined by the needs of the market. It was the
sales managers job, he wrote, to synchronize the standardization needs of

production with the markets demand for a varied product line. Sales
management had begun to evolve from the narrow supervisory role of the
pre-1920 era to a broader one embracing the marketing concept, though not,
as yet, so labelled.
Marketing, we can say then, is concerned with what has varyingly been
called demand creation (A.W. Shaw in Usui, 2008; Doubman, 1924),
demand activation (Copeland, 1958) or demand generation (Shaw and
Jones, 2005), with one scholar going so far as to associate marketing with
propaganda and the conditioning of buyers or sellers to a favorable attitude
(Shaw and Jones, 2005: 247). Marketing students, Converse (1951: 3)
attested, are interested in increasing or stimulating human wants, in general
and for the good of individual sellers. This leads them to the study of
advertising, salesmanship, and merchandising, marketing research and
packaging.

Conclusion
This chapter has introduced the development of marketing as an
academic discipline and business practice. Originally marketing was studied
for a variety of reasons. One of the most important is that business people
were increasingly aware that as their business enterprises expanded and
their production facilities became capable of producing ever larger quantities
of goods that they needed to find some way of selling these goods more
efficiently. They did this by expanding the markets they served, creating

demand where previously there was none. This is why marketing is often
associated with demand stimulation. In equal measure marketing scholars
and practitioners legitimized their activities on the basis of satisfying
customer needs (i.e. the marketing concept). Part of the legitimation strategy
used by marketers was their attempt to demonstrate how their marketing
activities added value; they did this by demonstrating that distribution costs
were reasonable and that middlemen, including distributors, agents and
retailers among others, deserved to be compensated for their activities
(Shaw and Jones, 2005).
Early in the history of marketing, there were a variety of different
strands of scholarship and multiple schools of marketing thought (see Shaw
and Jones, 2005). A few writers and practitioners were heavily influenced by
the work of Frederick Winslow Taylor and his writings on scientific
management. These were used to make sales-force management more
efficient. Others aligned themselves with issues of social and distributive
justice as a function of their scholarly training in Germany and interest in the
work of the German Historical School. From this resulted a debate between
neoclassical economics-influenced marketing scholars and the German
Historical School which forms the intellectual foundation for the first
paradigm debate (see Jones and Monieson, 1990). This was followed by the
vigorous debate on the idea of whether marketing was an art or science.
Developing out of these discussions were similar arguments between the

positivist marketing scholars and those influenced by more interpretive,

qualitative studies.

Major Historical Events Leading Towards

Marketing
Marketing starts from very first human being by using specific name
and understanding needs. But the evaluation of knowledge and print become
later. Major events of last three centuries which leads towards marketing
concepts are followings

The Invention of the Steam Engine

It's common knowledge that modern civilization was forged in the
factories of the industrial revolution. And these factories themselves were
powered by the steam engine. Therefore, it is no exaggeration to say that
steam engines ushered in the modern age. But where did the steam engine
come from? Who was the inventor of this "mover of mountains?" The steam
engine was not so much invented as developed. To give credit to any one
person would be to steal credit away from its many rightful owners. The
steam engine was developed over a period of about a hundred years by
three British inventors. The first crude steam powered machine was built by
Thomas Savery, of England, in 1698. Savery built his machine to help pump
water out of coal mines. This machine was so simple that it had no moving
parts. It also used up lots and lots of coal just to pump a small quantity of

water. To say it was a steam engine would be to stretch the world "engine"
far beyond its current meaning. However, it would be fair to say tha Savery
was the first person to find a practical way of using steam to perform useful
work. The next stage in the history of the steam engine was a result of the
work of Thomas Newcomen, also of England. Newcomen knew that there
must be a way of improving on Savery's inefficient steam powered pump.
Newcomen built a machine where the steam actually pushed a movable
piston in one direction. This true "steam engine" was also used to pump
water out of coal mines. Neither Savery nor Newcomen had any grander
purpose in mind for their machines. This all changed in 1763, when James
Watt, a Scottish engineer, set out to improve upon Newcomen's design. Watt
figured out a way to push a piston back and forth in its cylinder. And more
importantly, he found out a way to make this back-and-forth motion turn a
wheel. By using a "crankshaft," the steam engine could produce circular
motion. Watt may not have realized it at the time, but he had just invented
the first railroad locomotive.
Unfortunately, Watt didn't have the money to develop his improved
steam engine. However, he was able to convince and English manufacturer
that building steam engines could become a profitable business. Together
with his business partner, James Watt started a company to build steam
engines. Of course he must have hoped this improved steam engine would
find many uses in factories. But little did he realize at the time that his

machine would forever alter the course of history.

(By Phil Shapiro)

The Wealth of Nations Summary

(Buy

Study Guide)

Smith's seminal work, The Wealth of Nations, aims to create a new

understanding of economics. Smith writes largely against the mercantile
system that existed at the time of writing, but, along the way, gives a
complicated but brilliant account of an economic system based in human
nature and deeply rooted social dynamics. The text is characterized by factheavy digressions, tables, and appendices that blend hard research with
broad generalities, demonstrating his commitment to give evidence for what
seem like timeless observations about the nature of economics.
Books I and II focus on developing the idea of the division of labor, and
describing how this division adds to the opulence of a given society by
creating enormous surpluses, which can be exchanged among members. The
division of labor also fuels technological innovation, by giving intense focus
to certain tasks, and allowing workers to brainstorm ways to make these
tasks more efficient. This, again, adds to efficiency and grows surpluses.
Surpluses, Smith writes, may be either traded or re-invested. In the latter
case, technologies are likely to improve, leading to even greater efficiencies.
Book III considers Great Britain in the context of the social evolution of
society in general, which begins, according to Smith, with hunting and
gathering societies and progresses through agricultural stages to arrive at a

state of international commerce. According to Smith, the fall of Rome and the
rise of feudalism retarded this progression by creating a system of decreased
efficiency.
Book IV goes on to criticize the mercantile commerce that
characterized much of Smith's Europe. Smith's first major criticism of
mercantilism is that it conflates value and wealth with precious metals.
According to Smith, the real measure of the wealth of a nation is the stream
of goods and services that the nation creates. In making this point, Smith
invents the idea of gross domestic product, which has become central to
modern economics. The wealth of a nation is increased not by hoarding
metals, but by increasing the productive capacity by expanding the market
by increasing trade.
An important theme that persists throughout the work is the idea that
the economic system is automatic, and, when left with substantial freedom,
able to regulate itself. This is often referred to as the invisible hand. The
ability to self-regulate and to ensure maximum efficiency, however, is
threatened by monopolies, tax preferences, lobbying groups, and other
privileges extended to certain members of the economy at the expense of
others.
Finally, in the last book of The Wealth of Nations, Smith describes what
he considers to be the appropriate roles of government, namely defense,
justice, the creation and maintenance of public works that contribute to

commerce, education, the maintenance of the dignity of the sovereign,

activities that are to be financed by fair and clear taxation.
1.2-The Industrial Revolution Begins
The Industrial Revolution began with textile machines. These machines
turned cotton into yarn. In 1793, Eli Whitney invented the cotton gin, a
machine that cleaned cotton quickly. Cotton became Americas biggest
export. Then the government hired Whitney to make thousands of guns. At
that time guns were made by hand. Whitney thought of a way to make them
quickly and cheaply. He used interchangeable parts and mass production.
Soon factories began using his ideas. The nations productivity increased.

Machines Bring Change

Entrepreneurs used machines to change how people worked. Francis
Lowell built a mill that turned cotton into cloth. Soon other factories opened.
New inventions, like reapers and steel plows, made farm work easier and
faster. Before the Industrial Revolution, people worked on farms or in
workshops. Now many people worked in factories.

Changes in Transportation
In the 1800s, dirt roads could not be used in bad weather. The
government built a paved road from Maryland to Ohio. People built towns
and opened businesses to sell goods. Robert Fulton invented a steamboat
that could travel without wind or currents. Soon there were many

steamboats. In 1825, the Erie Canal opened. This canal made it easier to ship
goods between Lake Erie and the Hudson River. Many canals were built.
Rivers and canals became the fastest and cheapest way to ship goods.
Steam locomotive trains were even faster than steamboats. Trips that took
32 hours by steamboat took only 10 hours by train. Soon the United States
had thousands of miles of railroad track. Factories and farmers sent their
goods faster to places all over the country
(Copyright Houghton Mifflin Company. United States History, pp. 378383)

WORLD WAR I (19141919)

The Start of the War
World War I began on July 2 8 , 19 1 4 , when Austria-Hungary declared
war on Serbia. This seemingly small conflict between two countries spread
rapidly: soon, Germany, Russia, Great Britain, and France were all drawn into
the war, largely because they were involved in treaties that obligated them
to defend certain other nations. Western and eastern fronts quickly opened
along the borders of Germany and Austria-Hungary.
The Western and Eastern Fronts
The first month of combat consisted of bold attacks and rapid troop
movements on both fronts. In the west, Germany attacked first Belgium and
then France. In the east, Russia attacked both Germany and Austria-Hungary.
In the south, Austria-Hungary attacked Serbia. Following the Battle of the
Marne (September 59, 1914), the western front became entrenched in

central France and remained that way for the rest of the war. The fronts in
the east also gradually locked into place.
The Ottoman Empire
Late in 1 9 14 , the Ottoman Empire was brought into the fray as well,
after Germany tricked Russia into thinking that Turkey had attacked it. As a
result, much of 19 1 5 was dominated by Allied actions against the Ottomans
in the Mediterranean. First, Britain and France launched a failed attack on the
Dardanelles. This campaign was followed by the British invasion of the
Gallipoli Peninsula. Britain also launched a separate campaign against the
Turks in Mesopotamia. Although the British had some successes in
Mesopotamia, the Gallipoli campaign and the attacks on the Dardanelles
resulted in British defeats.
Trench Warfare
The middle part of the war, 1 9 16 and 1 9 17 , was dominated by
continued trench warfare in both the east and the west. Soldiers fought from
dug-in positions, striking at each other with machine guns, heavy artillery,
and chemical weapons. Though soldiers died by the millions in brutal
conditions, neither side had any substantive success or gained any
advantage.
The United States Entrance and Russias Exit
Despite the stalemate on both fronts in Europe, two important
developments in the war occurred in 19 1 7 . In early April, the United States,
angered by attacks upon its ships in the Atlantic, declared war on Germany.

Then, in November, the Bolshevik Revolution prompted Russia to pull out of

the war.

The End of the War and Armistice

Although both sides launched renewed offensives in 19 1 8 in an all-ornothing effort to win the war, both efforts failed. The fighting between
exhausted, demoralized troops continued to plod along until the Germans
lost a number of individual battles and very gradually began to fall back. A
deadly outbreak of influenza, meanwhile, took heavy tolls on soldiers of both
sides. Eventually, the governments of both Germany and Austria-Hungary
began to lose control as both countries experienced multiple mutinies from
within their military structures.
The war ended in the late fall of 19 1 8 , after the member countries of
the Central Powers signed armistice agreements one by one. Germany was
the last, signing its armistice on November 11, 19 1 8 . As a result of these
agreements, Austria-Hungary was broken up into several smaller countries.
Germany, under the Treaty of Versailles, was severely punished with hefty
economic reparations, territorial losses, and strict limits on its rights to
develop militarily.
Germany after the War
Many historians, in hindsight, believe that the Allies were excessive in
their punishment of Germany and that the harsh Treaty of Versailles actually
planted the seeds of World War II, rather than foster peace. The treatys

declaration that Germany was entirely to blame for the war was a blatant
untruth that humiliated the German people. Furthermore, the treaty imposed
steep war reparations payments on Germany, meant to force the country to
bear the financial burden of the war. Although Germany ended up paying
only a small percentage of the reparations it was supposed to make, it was
already stretched financially thin by the war, and the additional economic
burden caused enormous resentment. Ultimately, extremist groups, such as
the Nazi Party, were able to exploit this humiliation and resentment and take
political control of the country in the decades following. ( 2015 Spark Notes
LLC,)

WORLD WAR II (19391945)

The European Theater
German Aggression
The war in Europe began in September 1939, when Germany, under
Chancellor Adolf Hitler, invaded Poland. Britain and France responded by
declaring war on Germany but took little action over the following months. In
1940, Germany launched its next initiative by attacking Denmark and
Norway, followed shortly thereafter by attacks on Belgium, the Netherlands,
and France. All of these nations were conquered rapidly.
The Battle of Britain

Later in the summer of 1940, Germany launched a further attack on

Britain, this time exclusively from the air. The Battle of Britain was Germanys
first military failure, as the German air force, the Luftwaffe, was never able to
overcome Britains Royal Air Force.
Greece and North Africa
As Hitler plotted his next steps, Italy, an ally of Germany, expanded the
war even further by invading Greece and North Africa. The Greek campaign
was a failure, and Germany was forced to come to Italys assistance in early
1941.

The USSR
Later in 1941, Germany began its most ambitious action yet, by
invading the Soviet Union. Although the Germans initially made swift
progress and advanced deep into the Russian heartland, the invasion of the
USSR would prove to be the downfall of Germanys war effort. The country
was just too big, and although Russias initial resistance was weak, the
nations strength and determination, combined with its brutal winters, would
eventually be more than the German army could overcome. In 1943, after
the battles of Stalingrad and Kursk, Germany was forced into a full-scale
retreat. During the course of 1944, the Germans were slowly but steadily

forced completely out of Soviet territory, after which the Russians pursued
them across Eastern Europe and into Germany itself in 1945.
The Normandy Invasion
In June 1944, British and American forces launched the D-Day invasion,
landing in German-occupied France via the coast of Normandy. Soon the
German army was forced into retreat from that side as well. Thus, by early
1945, Allied forces were closing in on Germany from both east and west. The
Soviets were the first to reach the German capital of Berlin, and Germany
surrendered in May 1945, shortly after the suicide of Adolf Hitler.

The Pacific Theater

Pearl Harbor
The war in the Pacific began on December 7, 1941, when warplanes
from Japan launched a surprise attack on the U.S. Navy base at Pearl Harbor,
Hawaii. By this time, Japan had already been at war with China for several
years and had seized the Chinese territory of Manchuria. After the Pearl
Harbor attack, Japan began a massive campaign of expansion throughout the
Southeast AsiaPacific region.

The U.S. Entrance and Battle of Midway

Although the Pearl Harbor attack provoked a declaration of war by the
United States on Japan the very next day, it would be several months before
U.S. forces would get seriously involved militarily. In late spring of 1942, the

United States and Japan engaged in a series of naval battles, climaxing in the
Battle of Midway on June 36, 1942, in which Japan suffered a catastrophic
defeat.

The Solomon Islands and Guadalcanal

For the next year, the United States engaged Japan in a protracted
struggle for the Solomon Islands, which lay near vital Allied shipping routes.
Between August 1942 and February 19 4 3 , Allied forces carried out an
invasion on the island of Guadalcanalthe beginning of a long series of
Allied offensives that would eventually force the Japanese out of the
Solomons and then pursue them from various other Pacific island chains that
the Japanese had earlier seized. In the meantime, British and Indian forces
were combating Japanese troops in Burma.

The Approach to Japan

Fighting continued throughout the Pacific in 1944 and early 1945,
including major battles at Leyte, Iwo Jima, and Okinawa. By the late spring of
1945, most of Japans conquests had been liberated, and Allied forces were
closing in on the Japanese home islands. As they neared Japan proper, the
Allies began heavy bombing campaigns against major Japanese cities,

including Tokyo. This process continued through the summer of 1945 until
finally, in early August, the United States dropped two atomic bombs on the
cities of Hiroshima and Nagasaki. Stunned by the unexpected devastation,
Japan surrendered a few days later.
( 2015 Spark Notes
LLC,)

ENERGY CRISIS (1970S)

By the early 1970s, American oil consumptionin the form of gasoline
and other productswas rising even as domestic oil production was declining,
leading to an increasing dependence on oil imported from abroad. Despite
this, Americans worried little about a dwindling supply or a spike in prices,
and were encouraged in this attitude by policymakers in Washington, who
believed that Arab oil exporters couldnt afford to lose the revenue from the
U.S. market. These assumptions were demolished in 1973, when an oil
embargo imposed by members of the Organization of Arab Petroleum
Exporting Countries (OAPEC) led to fuel shortages and sky-high prices
throughout much of the decade.
Background to the Energy Crisis
In 1948, the Allied powers had carved land out of the British-controlled
territory of Palestine in order to create the state of Israel, which would serve
as a homeland for disenfranchised Jews from around the world. Much of the
Arab population in the region refused to acknowledge the Israeli state,
however, and over the next decades sporadic attacks periodically erupted

into full-scale conflict. One of these Arab-Israeli wars, the Yom Kippur War,
began in early October 1973, when Egypt and Syria attacked Israel on the
Jewish holy day of Yom Kippur. After the Soviet Union began sending arms to
Egypt and Syria, U.S. President Richard Nixon began an effort to resupply
Israel.
Did You Know?
In the early 21st century, Americans continue to rely heavily on foreign
oil. The United States consumes about 20 million of the roughly 80 million
barrels of oil consumed daily in the world, and three-fifths of that is imported.
In response, members of the Organization of Arab Petroleum Exporting
Countries (OAPEC) reduced their petroleum production and proclaimed an
embargo on oil shipments to the United States and the Netherlands, the
main supporters of Israel. Though the Yom Kippur War ended in late October,
the embargo and limitations on oil production continued, sparking an
international energy crisis. As it turned out, Washingtons earlier assumption
that an oil boycott for political reasons would hurt the Persian Gulf financially
turned out to be wrong, as the increased price per barrel of oil more than
made up for the reduced production.
Energy Crisis: Effects in the United States and Abroad
In the three frenzied months after the embargo was announced, the
price of oil shot from $3 per barrel to $12. After decades of abundant supply
and growing consumption, Americans now faced price hikes and fuel
shortages, causing lines to form at gasoline stations around the country.

Local, state and national leaders called for measures to conserve energy,
asking gas stations to close on Sundays and homeowners to refrain from
putting up holiday lights on their houses. In addition to causing major
problems in the lives of consumers, the energy crisis was a huge blow to the
American automotive industry, which had for decades turned out bigger and
bigger cars and would now be outpaced by Japanese manufacturers
producing smaller and more fuel-efficient models.
Though the embargo was not enforced uniformly in Europe, the price
hikes led to an energy crisis of even greater proportions than in the United
States. Countries such as Great Britain, Germany, Switzerland, Norway and
Denmark placed limitations on driving, boating and flying, while the British
prime minister urged his countrymen only to heat one room in their homes
during the winter.
Energy Crisis: Lasting Impact
The oil embargo was lifted in March 1974, but oil prices remained high,
and the effects of the energy crisis lingered throughout the decade. In
addition to price controls and gasoline rationing, a national speed limit was
imposed and daylight saving time was adopted year-round for the period of
1974-75. Environmentalism reached new heights during the crisis, and
became a motivating force behind policymaking in Washington. Various acts of
legislation during the 1970s sought to redefine Americas relationship to
fossil fuels and other sources of energy, from the Emergency Petroleum
Allocation Act (passed by Congress in November 1973, at the height of the

oil panic) to the Energy Policy and Conservation Act of 1975 and the creation
of the Department of Energy in 1977.
As part of the movement toward energy reform, efforts were made to
stimulate domestic oil production as well as to reduce American dependence
on fossil fuels and find alternative sources of power, including renewable
energy sources such as solar or wind power, as well as nuclear power.
However, after oil prices collapsed in the mid-1980s and prices dropped to
more moderate levels, domestic oil production fell once more, while progress
toward energy efficiency slowed and foreign imports increased.
(

2015,

A&E

Television

Networks)

Tom peters - in search of excellence

Tom Peters and Robert H Waterman Jr - In Search Of Excellence summary
The seminal management book In Search of Excellence, by Tom Peters
and Robert Waterman, was published in 1982, and remains one of the one of
the biggest selling and widely read business books ever. Peters and
Waterman found eight common themes which they argued were responsible
for the success of the chosen corporations, which have become pointers for
managers ever since. In Search of Excellence didn't start out as a book, as
Tom Peters explained when interviewed in 2001 to mark the 20th anniversary
of In Search of Excellence: Peters and Waterman were both consultants on
the margins of McKinsey, based in the San Francisco office. In 1977 McKinsey
director Ron Daniel launched two projects; the first and major one, the

Business Strategy project, was allocated to top consultants at McKinsey's

New York corporate HQ and was given star billing. Nothing came of it. The
second 'weak-sister' project (as Peters called it) concerned Organization structure and people. The Organization project was seen as less important,
and was allocated to Peters and Waterman at San Francisco. Peters travelled
the world on an infinite budget, with license to talk to as many interesting
business people he could find about teams and organizations in business. He
had no particular aim or theory in mind. In 1979 McKinsey's Munich office
requested Peters to present his findings to Siemens, which provided the spur
for Peters to create a 700-slide two-day presentation. Word of the meeting
reached the US and Peters was invited to present also to PepsiCo, but unlike
the hyper-organized Siemens, the PepsiCo management required a tighter
format than 700 slides, so Peters produced the eight themes.
The platform for Peters and Waterman, onto which the In Search Of
Excellence research and theorizing was built, was the McKinsey 7-S model:
McKinsey 7-S model elements

Structure
Strategy
Systems
Style Of Management
Skills - Corporate Strengths
Staff
Shared Values

Peters and Waterman examined 43 of Fortune 500's top performing

companies. They started with a list of 62 of the best performing McKinsey
clients and then applied performance measures to weed out what they

thought to be the weaker companies. General Electric was one of the

casualties which failed to make the cut. Peters says that one of his personal
drivers in carrying out his research was to prove that certain established
methods - particularly heavily systemized philosophies and practices - were
wrong, notably those used by Xerox, and advocated by Peter Drucker and
Robert McNamara. Peters says that he wanted - with a passion - to prove
how crucial people are to business success, and to release business from the
'tyranny of the bean counters'.
As Peters explained in 2001: 'Start with Taylorism, add a layer of
Druckerism and a dose of McNamaraism, and by the late 1970's you had the
great American corporation that was being run by bean counters...'
Contrast this with what Peters says became the essential message of In
Search of Excellence, simply:

People
Customers
Action

Peters says that In Search of Excellence turned these 'soft' factors into
hard ones, when previously the only 'hard factors were considered to be the
'numbers'.
Peters also said in 2001 that other than certain wrong companies
highlighted - Atari and Wang for instance - In Search of Excellence 'absolutely
nailed the eight points of the compass for business at that time' (1982), but
that its central flaw was in suggesting that these points would apply for ever,
when they most certainly have not.

Peters said finally in his 2001 interview that were he to write In Search
of Excellence today, he would not tamper with any of the eight themes, but
he would add to them: capabilities concerning ideas, liberation, and speed.
Here is a summary of the 'In Search of Excellence' eight themes, which
also form the eight chapters of the book.
IN SEARCH OF EXCELLENCE - THE EIGHT THEMES

A bias for action, active decision making - 'getting on with it'.

Close to the customer - learning from the people served by the

business.
Autonomy and entrepreneurship - fostering innovation and

nurturing 'champions'.
Productivity through people - treating rank and file employees as

a source of quality.
Hands-on, value-driven - management philosophy that guides

everyday practice - management showing its commitment.

Stick to the knitting - stay with the business that you know.
Simple form, lean staff - some of the best companies have

minimal HQ staff.
Simultaneous loose-tight properties - autonomy in shop-floor
activities plus centralized values.
( Alan Chapman 19952014)

The IBM Way

I picked up this book at a used book store. Although a little old, it was
interesting for me as a programmer. The author, Buck Rodgers was the VP for
Marketing for IBM for 10yrs, till he took early retirement in 1984. For me, the
foundation of the GNU revolution was laid by IBM in the '60's and '70's.
Although nominally you might own the computers, IBM told you what you
could and could not do with them, and you were really just the custodian. If
IBM wanted to change the hardware and software from underneath you, they
did it and told you to pay for it. You smiled while you rewrote your 100,000
lines of (application) code for the new machines. When IBM said "bend over!"
you bent over.
The lesson learned by anyone who came through that era, was that
they would never write another line of platform dependent code and risk
being caught out ever again by changes in the computer infrastructure. After
that, Richard Stallman's step of making all the code portable and having you
(rather than the vendor) owning it, was but a small one

[1]

The microcomputer (PC) revolution was everyone's escape from IBMowned computing and the people, who didn't heed the lesson of IBM, fell into
the waiting arms of Microsoft. The words in the book are carefully crafted.
Here's an example from the back cover
Buck Rodgers ... saw and led through IBM's growth from $250 million
to $50 billion.
What he means is "saw OR led". I read this as Rogers "oversaw and
led" a 200-fold increase in IBM's revenue. Why wasn't he a household word

like Lee Iacocca? On looking further, this statement covers the whole 24 year
period of Rodger's employment at IBM, only the last 10 of which he was a VP.
Presumably he started as some low order flunky, where he was a spectator
on IBM's fortunes. The increase in IBM's revenue for the 10yrs of Roger's VPship is not disclosed.
Every sentence in this book is a similar landmine. No statement is
made that can be tested against reality. If your world is one where things
either work or don't work and you're held accountable for the outcome, then
you'll have to suspend your urge to check each statement, or you won't get
through the book or hear his message. I was hoping to see how he thinks or
how he works. There's none of that - only what he wants you to think.
OK, what does Buck Rodger's want you to think IBM are about?

helping the customer with their business and solving their

problems
being a partner with the business

IBM is all about mother's milk (220 pages of it) - and the customers
value every drop.
I wasn't surprised to find that his view of IBM was different to mine,
this, after all is why I bought the book. What I was surprised was how it was
different. First off, I thought IBM was a computer company. I couldn't have
been more wrong. There are pages and pages of service and partnering, but
if you hadn't heard that IBM sold computers too, you won't find out here.
Buck Rodgers, in his 24yrs at IBM, never came across a computer or a person

who thought of IBM in connection with computers. Oh sure, a magneto

optical disk in mentioned in one sentence and there are two pages on the
deployment of the IBMPC, but they're peripheral to the real stuff - service
and partnering. Buck never used a computer for his work; a spreadsheet,
inventory or a financial simulation. For those of us who've completely missed
the point - IBM is not about computers, never was and never will be.
If IBM isn't selling computers, who then are IBM's customers? Having
spent a lifetime punching cards, carrying fan-fold paper and looking at rooms
full of computers; I thought the customers were the people who needed the
computers. Wrong again.
You're the technical lead on a large purchase, you've been doing this
for 25rs, you know the stuff cold, the staff have the skills and experience to
handle anything and have a 100 man-yrs. invested in the company, you've
spent what could have been your only productive time for the last 6 months
explaining it all to a bunch of suits who don't know the back of a computer
from the front, and you've finally convinced them that they need the
hardware from a particular vendor. Then (p155-6) they go to talk to IBM, who
hasn't figured in any of the discussions so far.
The (customer's) president was very impressed with the technological
aspects of the competitor's presentation. He was obviously caught up
in the bits and bytes, and I would have antagonized him had I debated
their relative value.
...when he was finished I responded "I have only one thing to ask, and
nothing more," I said. "Do you want to do business with a hardware vendor
or do you want a partner?"
I truly believed we had something very special to offer this account... - our
sincere interest in their wellbeing.

"I want a partner," he said, after considering the question for a few
moments. Then he walked over to me, extended his hand and said, "Buck,
shake hands with your new partner."
IBM's customers are people who want partners and solutions, not people who
want computers. Guess what? You aren't getting your hardware - you're
getting a partner.
After the Challenger disaster, we should all know that no-one listens to
the engineers

[2]

. I always feel a bit of a fool after one of these events,

realizing that you've been involved in a 6month charade, when you could
have spent the time in productive work. However if you'd called anyone on it,
you wouldn't have been a team player and possibly lost your job. You wonder
about the vendor you had worked with so diligently, to make sure that you'd
get exactly what the company needed. They know the rules too, and they
know that the people with the money aren't buying computers.
One thing that Buck Rodgers wants you to know is that he's a marketer
and not a sales person. I didn't realize the difference was important to
anyone, but he spared no effort to straighten me out. Here's the difference

The marketer decides what the customer will be buying

sometime in the future

When the future arrives, the salespeople make sure the customer
buys it.