The History of Business

When it comes to the history of business, there are plenty of books on the shelves, and on the internet, which offer explanations of the origins of business. But do these histories really illuminate the origin of business? The most commonly agreed upon history is that business was born out of the need for efficient management of human resources in the early medieval period. The idea was to use the people for work rather than for raw materials. These were the ‘haves’, the first businesses, with the warehouses, factories and work stations being the modern versions.

But how can business history be told when the only sources we have are stories and tales told by those who came before us? It seems that the more we learn about business, the more our bias and preconceptions cloud the true picture. If only we had more empirical data about businesses in the past, then perhaps we would see the evolution of business through the history of its members more clearly. I propose that this can be done with a number of research agendas.

Firstly, we must look beyond the conventional business history research agendas and research methods. Most business historians fall into one of two categories: sociological researchers or social scientists. They analyse the interactions and cross cultural contact between people from different cultures to gain a deeper understanding of their minds, spirits and societies. By comparing and contrasting the stories they hear from various communities, they attempt to piece together the puzzle of how people from different times and places interact, why they interact and how this interaction shapes the outcome of those interactions. For some business historians, this type of research has the potential to provide a much deeper understanding of how business was born.

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Another group of historians that look at business history are those who emphasise economic activity as the defining feature of business. They argue that business is essentially about people and that what happens in the boardroom does not reflect what goes on in the shop floor or at the door. The actions of managers are therefore primarily motivated by their ability to maximise profits, regardless of what they do to the workers. Other historians however, look past the economic pressures of the day to examine social responsibility in the business world. They argue that business ethics and social responsibility are closely linked, that the first is no less important than the latter.

A third strand of business history research concerns the impact of globalisation. Today’s global economy has led to increasing international trade and investment, transforming previously isolated markets, forcing organisations to adjust to the global marketplace. In many ways, the impact of globalisation has been positive for businesses, but it has also had a negative effect on the working conditions of many employees of international companies. Business historians looking at the development of entrepreneurship try to answer the question: what went wrong?

The history of entrepreneurship and its impacts is a complicated one. The development of new ideas is likely to have an effect on the formation of new business models. New organisations may struggle to adapt to changes in an efficient and effective manner, if the conditions favourable for innovation are not present. Similarly, organisations that have adopted inefficient methods of production and distribution could suffer the consequences when the conditions change. The research that business historians conduct into the history of business will look at how the introduction of new ideas and organisation has affected the extent of market competition, the extent to which organisations can adapt to new conditions and the effects that the introduction of new technology has had on the production and distribution of goods and services.

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Historical research into the business history will also look at how organisational systems have changed over time. There is an abundance of information available in libraries around the world, but it can be difficult to decipher what has been achieved and what is still achievable. There are three broad business history research agendas. These are comprehensive, system-based and transitional. Systems-based research agendas describe issues arising from the interaction of economic, technological and managerial systems. These can include interaction of the production, processing, marketing, research and development, finance and accounting systems. System-based research agendas will seek to establish what the impact of innovations on the production, distribution and sale of products and services has been and what role, if any, the organisations, businesses or organisations play in maintaining or creating these markets. Transitional research agendas tend to look at the ways in which new and emerging business models have challenged or changed the way organisations operate. For example, the growth of networks through technology or the expansion of retailing through online shopping have changed the way organisations function.