09/12/2010 The Corporate Paradox (1975-2002)

Chapter 7, The Company in America since 1975, extracted from The Company : a short story of a revolutionary idea, written by John Micklethwait and Adrian Wooldridge and published in 2005.

Chapter 6 : the triumph of managerial capitalism (1913-1975)

For John Micklethwait and Adrian Wooldridge, the modern corporation was one of the prime innovations that led to the Industrial Revolution. In the 1970s, many companies began to focus on the core business, that is to say to focus on their main activity and outsource their activities the less profitable. Some companies even outsource their thinking and created consulting businesss , the beginning of an idea of management in businesses. Management consists in planning, organizing, staffing, leading and controlling an organization. As a consequence, many companies started to relocate their headquarters and downsizing began in the US in the 1980s. Downsizing is the layoff of permanent employees in a company to improve efficiency. Moreover, many factories and offices closed even in the biggest companies. In the 1990s, the majority of states members of the OECD (Organisation for Economic Co-operation and Development) coordonated their rules to widely open their market in telecom to competition to attract capital in their economies. The services sector in telecom rised: big multinationals firms in telecom, all wanted to take control of startups that had technological knowledge and skills required. The numbers of startups raised in certain technology centers (whose main activity is the industrial production of high-tecnology and services to companies) like in the Silicon Valley.

Silicon Valley is in San Francisco in Northern California in the US. The name Silicon Valley refers to all the high-tech businesses in the area, it’s the world largest technology companies, the American high-tech sector.
It continues to be the leader in high-tech innovation