Foreign-currency transactions and the recovery of German industry in the aftermath of the First World War: the case of Schering AG

While historians have for a long time recognized the importance of the First World War to the general flow of history, business economists do not fully appreciate the impact of the war on commercial relationships. The First World War transformed the political, economic, and social context, in which business was done, forcing companies to develop new strategies and activities, some of which were almost unimaginable before August 1914. This article focuses on one aspect of doing business: foreign exchange management. It argues that Schering AG and its parent, like many German companies after the First World War, were obliged to refocus their activities around their foreign exchange exposures and that the management of foreign exchange issues contributed to a much tighter relationship between businesses, government, and business associations than had existed before the war and for which some aspects of Germany's system of corporate control were not well adapted to handle.     

Ivan T. Berend. An Economic History of 20th Century Europe: Economic Regimes from Laissez-Faire to Globalization

If economics is the dismal science, it should be no surprisethat economic history—with its many statistics and tables—hasfew opportunities for lyrical flourishes to avoid becoming dismalreading. Ivan Berend's very competent economic history of Europein the twentieth century makes a great effort to overcome thisgeneric failing with lively analysis and interesting asides. While providing a rich assortment of good comparative statisticsand clear graphics, Berend does an excellent job of integratinghis economic story into     

Politics, Corporate Governance, and the Dynamics of German Managerial Innovation: Schering AG between the Wars

Conflicting interpretations of the evolution of German businessbetween the two world wars and of Germany's corporate governanceduring the Third Reich are examined in this article. AlfredChandler's view that major corporate changes emanated from managerialinitiatives is contrasted with Harold James's interpretationthat public and government pressures forced innovations on business.In support of James's analysis, I argue that state and politicalpressures, not management, initiated significant changes inGerman corporate governance and in the organization of Germanindustry during the interwar period, especially in the 1930s.Using Schering AG, one of Germany's largest companies beforeWorld War II, the article traces the influences of NationalSocialist pressure and changes in corporate law on companies'organizational adaptation to government social priorities duringthe Third Reich.     

Family Finance: Value Creation and the Democratization of Cross-Border Governance

As Mira Wilkins has argued, there is a curious disconnect betweenbusiness and financial history (Wilkins 2004). Whereas businesshistory literature has rediscovered the importance of familybusiness in many countries and in many sectors of contemporarycommercial life, for example, little has been written aboutfamily banking as an alternative to joint-stock, management-runfinancial institutions. This lacuna is odd for many reasons.First, family banking is one of the best-known examples of familybusiness in history. Second, family banks once played a muchgreater role in international investment banking than it doestoday. Third, some family financial institutions are still active(dominant) in certain market segments and countries. This paperwill focus on how, when and why family banking lost its positionin international (multinational) banking during the first fewdecades of the twentieth century. Although political upheavaland a widespread movement to reduce the power of private financialinstitutions undermined their businesses, family banks suffered,too, from America's maturing as a financial center. I will arguethat this shift is connected with the increased importance ofAmerican markets and financial regulations, which, in the 1930s,deliberately steered financial transactions away from privatedealings and toward transparent impersonal exchanges and capitalmarkets with new forms of aggregated capital and individualinvestors, in which private banks were ill-suited to manageor at the least for which they had no special competitive edge.Using concepts drawn from an earlier paper on family businessesand relying mostly on secondary sources, this paper will furtherargue that in markets or market segments, such as LeveragedBuyouts, where uncertainty forms a greater part of the transactionalenvironment, family banking still plays a significant role.