Political economy of strategic and structural change in the Calico Printers' Association 1899-1973

Pitt, Simon (1990) Political economy of strategic and structural change in the Calico Printers' Association 1899-1973. Doctoral thesis, University of London: London Business School.

Abstract

This is an historical study of the strategic and organisational development of a single cotton multinational firm, the Calico Printer's Association (CPA), from its foundation in 1899 to 1968-73 when it merged with English Sewing Cotton (ESC), to form first English Calico and the Tootal Ltd. The thesis is principally concerned with the context and character of strategic choice in a dynamic, changing environment. It argues that in order to understand the context in which strategic choices are made, it is necessary first to place the firm in its market context. The thesis applies principles of strategic and structural change developed by Alfred Chandler and Oliver Williamson, supplemented by precepts of strategic choice from the organisational behaviour literature. Markets are defined in the widest possible sense. Secondly it explores the structural context for choice firm itself. The critical aspect of the process of exercising choice are the perceptions of the managers involved. Perceptions are informed by information and the flow of information is influenced by structure. This framework is used to analyse key moments in CPA's strategic and structural development, including investment decisions in both the UK and abroad. The thesis shows that CPA's developed defensive routines which resulted in stereotypical actions. Strategy formulation was conceived in terms of structural change; the pattern of new foreign remained set in developing countries even though market opportunities suggested other locations; the commercial potential of Terylene, the world's first polyester fibre, was under -developed. The firm's strategic capability proved frozen and corporate learning of new lessons in changing market circumstances was minimal. The thesis concludes that CPA's strategic responses are best understood in terms of the hypotheses developed in the organisation behaviour literature. Transaction cost models do not fit the evidence but this may be a condition of the evidence. The research findings do not constitute a proper test of transaction cost theories. The findings do, however, provide further qualifications to Chandler's strategy-structure process model. The thesis concludes by suggesting that a comparative approach to similar issues of perception and choice would, despite attendant difficulties, be a fruitful agenda for further research.