Business Studies for Ordinary Level – Form 1, 2, 3, 4

BUSINESS STUDIES FOR SECONDARY SCHOOLS – FULL NOTES

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FORM ONE

FORM TWO

FORM THREE

FORM FOUR

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The significance of business cannot be emphasized enough. From fueling economic growth and creating job opportunities to driving innovation and meeting societal needs, businesses are vital for the progress and well-being of society. Embracing ethical practices and focusing on sustainability will pave the way for a prosperous future.

After learning what are the role and importance of business to the society, are you ready to build your own business? If so, Indonesia can be a good place to start.

With its vast natural resources and strategic location, Indonesia has emerged as one of the key players in the global business landscape. The country offers a diverse and dynamic market with a population of over 270 million, making it an attractive destination for both local and international businesses.

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Entrepreneurship and business are at the core of modern life.  Both have given us many great innovations and improvements in life and prosperity. 
 
We at the American Business History Center understandably focus our efforts on the United States, particularly “recent” history (the last two hundred years!).  It is easy to think that all the ideas, innovations, and techniques of business were invented in America, or in that “recent” time span.  Yet a deeper study of history, extending well beyond the United States, teaches us that many of the key concepts and practices have been around for centuries, even millennia.  A true understanding of how we got to where we are today requires that we follow that deep history.
 
My own education tended to make me think that ancient civilizations – the Babylonians, Phoenicians, Egyptians, Greeks, and Romans – were only about pyramids, mummies, mythology, and political empires.  I don’t recall my history teachers talking much about “business deals.”  Yet, especially in the last twenty or thirty years, scholars have dug up more clay tablets and other indicators of vibrant business cultures, even thousands of years ago. 
 
Throughout world history, trade between nations and city-states has been critical.  The Egyptians of the Nile Valley did not have much timber, whereas the Phoenicians from present-day Lebanon had their famous cedars.  Hence began one of the greatest trading empires, the Phoenicians, who unlike most of their neighbors would rather trade than conquer.  Sailors learned to follow the stars and make maps in large part to facilitate trade, which was a force for peace and cultural interchange, as it still is today.  Advances in mathematics were needed to figure taxes to be paid to the king and to figure the revenues, expenses, and profits of traders and other entrepreneurs.

Phoenician Merchants and Traders

For those readers interested in learning more, we have compiled the following notes on some fascinating books.  Note that most of these books are “serious” or scholarly books – ones full of footnotes, references to academic studies, and bibliographies. A few, as noted, are written more for the general reader, focusing on storytelling, not just the “dry” facts.  You can read these notes and use the “look inside” feature on online bookselling sites to decide for yourself which books you might the most enjoy and learn from.

Money Changes Everything: How Finance Made Civilization Possible, by William Goetzmann (2016), is what reviewers call “a magisterial book.”  That is, an amazing and comprehensive, original study.  I found every page very interesting.  While the title says “finance,” finance broadly defined underlies all business enterprise.  How is the money raised?  How are partnerships formed?  Goetzmann starts with the earliest Babylonians and Greeks and works his way through innovations in China and Italy, where double-entry bookkeeping was invented, right up to the present day.  The Sumerian Enmetena “cone” (a tablet), dating from about 2100 BC, shows a form of business plan (and advanced mathematics).  Five hundred-plus pages of fascinating, well-told history, this is my number one book on this list, although each takes a slightly different approach to “business history.”  Goetzmann and other authors cover some of the same material in this more expensive, beautifully illustrated, older book:  The Origins of Value: The Financial Innovations that Created Modern Capital Markets, edited by William Goetzmann and Geert Rouwenhorst (2005).

Enmetena Cone

Foundations of Corporate Empire: Is History Repeating Itself?, by Karl Moore and David Lewis (2000), is a great book, a survey of “big business” from the ancients through the twentieth century.  The book moves along rapidly and does not go into as much “dry” detail as some of the others. 
 
Birth of the Multinational: 2000 Years of Ancient Business History, from Ashur to Augustus, by the same authors, Karl Moore and David Lewis (1999), is an awesome book that delves more deeply into the details of business in the earliest days.  Check it out for a deep dive into the business lives of the Assyrians, Phoenicians, Babylonians, Greeks, and Romans.
 
The Origins of Business, Money, and Markets, by Keith Roberts (2011).  I really enjoyed the storytelling in this book, which focuses on the Greeks and Romans, but also goes backward to 1600 BC and beyond.
 
The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times, edited by David Landes, Joel Mokyr, and William Baumol (2010) was written, compiled, and edited by some of the foremost economic historians.  This detailed book contains individual chapters on key steps in the evolution of entrepreneurship.  It covers the complete history, from the ancients through the present day, with scholarly articles on the rise of big corporations in the “early modern period” (defined by historians as from about 1500 to 1800), on the industrial revolution, and on modern times.  Excellent for the serious student of history and business.
 
A Brief History of Entrepreneurship: The Pioneers, Profiteers, and Racketeers Who Shaped Our World, by Joe Carlen (2016), is a thin book that reads quickly, touching on a diverse set of characters from the ancient Phoenicians to Al Capone and Warren Buffett.
 
A Splendid Exchange: How Trade Shaped the World, by William Bernstein (2008), is written for the general reader and the winner of multiple “best book” awards.  This is the fascinating story of global trade from ancient times to the present.
 
Cross-Cultural Trade in World History, by Philip Curtin (1984), is a scholarly book that is a bit less “Euro-centric” than some of the others, covering Africa, Asia, and South America as well as the “Western” world.
 
A Concise Economic History of the World: From Paleolithic Times to the Present, by Rondo Cameron (2015).  If you want to knit all this together, learning the story of the global economy in one volume, this is the book.  Cameron starts in the ancient world and works around the globe to the modern age.
 
The Ordinary Business of Life: A History of Economics from the Ancient World to the Twenty-first Century, by Roger Backhouse (2001).  There are many histories of the study of economics and biographies of the great economists.  Most begin with Adam Smith, who wrote his famous book The Wealth of Nations in 1776 and is usually considered the “father” of modern economics.  But Backhouse’s excellent book does not get into Smith until one-third of the way through the book, after he starts in ancient times and covers Aristotle and the Greeks and every aspect of thought about economics before Smith.  This is a great education for anyone interested in the field of economics.
 
After the collapse of the Roman empire around the year 500, the “dark ages” began.  While not everything went dark – better terms are the “Middle Ages” or “Medieval Era” – business practices did not seem to advance much. 

Then, as the world crossed into the second millennium in 1000, business and trade ramped up again, led by the city-states of Northern Italy.  The merchants and traders of Venice and Genoa and families like the Medici in Florence created much of the modern accounting system, including the debits and credits of double-entry bookkeeping.  The textile cities of Bruges, Ghent, and Antwerp in Flanders (now Belgium) rose to importance, as did the Hansa cities (or “Hanseatic League”) of Northern Germany and the Baltic Sea.  All these cities and business empires had branches throughout Europe and sometimes reaching east to Constantinople (now Istanbul) and beyond.

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Business has been a key part of social, political and economic life for centuries. 

From early trade systems to contemporary e-commerce websites, business evolution remains closely linked to broader historical shifts. As the world has transformed to accommodate changing norms and industry developments, businesses have endured. 

With this in mind, let’s dive into the history of business and business theory as it relates to today.

The Early Foundations of Business

The early history of business can be defined by two historical developments: the trade and barter systems, and the emergence of monetary currency.

Early trade and barter systems

The origins of business reach back to the construction of early trade networks, like the Silk Road, which famously connected the major ancient civilisations of China and the Roman Empire.

These systems often operated via bartering – the exchange of goods or services for other goods or services, without the use of money. 

While early barter systems worked well for their simplicity, preservation of natural resources, and prevention of foreign exchange crises, they weren’t without their challenges. Barter systems require a convergence of needs that may not always coincide. 

Bartering also lacks a standard means of measuring value, and relies too heavily upon mutual trust, which was often broken by one or both trading parties.

As a result, a trade system addressing the above concerns was needed, leading to the introduction of currency. This laid the groundwork for future economic structures.

The emergence of currency

To address the shortcomings of early barter systems, which lacked a standardised measurement of value, many early civilisations turned to currency. 

The transition from a barter system to a monetary system allowed for a balanced system of exchange, incorporating international trade networks, and guaranteeing that merchants could receive a fair price for their goods.

The introduction of currency allowed commercial trade to flourish in the Middle Ages, ushering in concepts of debt and credit, bills of exchange, and early banking institutions.

The emergence of currency also enabled the rise of treasuries on the European continent. These institutions created and managed new money, and unlike barter systems, garnered the public’s trust. 

The Medieval Guilds and Rise of Mercantilism

Guild systems and craftsmanship

The guilds of medieval Europe were a means through which merchants and craft workers – now relying on early forms of currency – could benefit from mutual aid. They established uniform production standards and reduced economic competition.

The two distinct types of guild systems were:

1. Merchant guilds for traders

2. Craft guilds for skilled artisans (such as leather workers and weavers)

Merchant guilds allowed traders to gain a sense of community, and even build political influence from the collective spirit of its members. This created a new middle class of powerful merchants in the decades preceding the rise of mercantilism.

With the rise of this wealthier middle class, entry requirements and regulations to join guilds became stricter, and an increasingly powerful bourgeoisie successfully maintained their position above the workers who lacked the skills to start their own businesses or gain guild membership.

Mercantilism and global trade

Not long after, a new system of economic trade emerged: mercantilism. 

As an economic philosophy, mercantilism refers to the idea that trade generates wealth when aided by restrictive trade practices – or protectionism. Simply put, mercantilism was based on the idea that a nation’s power could be best served by increasing exports and reducing imports.

This resulted in the rise of individual global trade powers, whose reliance on exports and cheap labour significantly undermined the economies of smaller regions or colonies.

The Industrial Revolution and Modern Business

Impact of the Industrial Revolution

With the establishment of these economic superpowers such as Britain, the 18th century saw a massive growth in industry.

This ushered in a period of global transition towards more efficient manufacturing processes. Known as the Industrial Revolution, this transition saw the: 

Replacement of hand production with machine production 

Increasing use of steam power 

Rise of urban cities and factories 

Development of mechanised tools

The Industrial Revolution also significantly transformed business models, ushering in a manufacturing economy defined by: 

Increased production and efficiency 

Lower prices

Improved wages 

Higher standards of living in industrialised countries

A migration of business from rural regions to urbanised metropolitan centres

Significant technological innovations also coloured the Industrial Revolution, such as steamships, the electrical telegraph, mechanised cotton spinning for textile production, and the use of iron to circumvent the limitations of water power.

Birth of modern management theories

During the industrial era, there also emerged several early management theories.

Scientific Management Theory

Developed by Frederick Winslow Taylor in 1909, this theory believes that success is dependent upon the effective completion of each and every task, no matter how small. 

This means that each employee should be assigned a particular job that best fits their skills, while managers are responsible for the provision of relevant training and development.

Administrative Management Theory

Developed by Henri Fayol in the early 1900s, this theory focuses on the organisational structure of an entire company via clear divisions of labour, an alignment with organisational goals, and a healthy manager-employee relationship.

Bureaucratic Management Theory

Developed by Max Weber at the end of the 19th-century, this theory highlights the role of bureaucracy in spelling out company objectives, efficiently dividing labour, and the importance of emotion in business. 

As highlighted by Weber’s theory, the emergence of industry and concurrent management theories emphasised the role of human-beings in business. 

However, it wasn’t until the 20th century that such an approach would be adopted by business leaders on a global scale.

20th Century: From World Wars to Globalisation

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The history of business is always an interesting topic at pre-university and university level – well, I thought it was!

The study of business, or our general understanding of business and its role in society, is sometimes confused and mistakenly made directly synonymous with more specific job professions within finance, consulting or any other field you may be familiar with.

We should consider ‘business’ in its broader sense and appreciate this breadth and its comprising industries.

From thereon, it is much easier to go into depth about what constitutes business, how it works, why it works, and where it is heading. And this is why it’s important to gain insight before university by attending a business summer school or an entrepreneurship summer school.

Of course, specific business industries rightfully deserve their detailed analyses, but we often underestimate more prominent characteristics and trends that transcend industries as well as geographical locations.

So let’s have a look at business from a past, present and future perspective.

Back to Basics

Business, in simple terms, is when a person or organisation profits by providing goods and/or services in exchange for money – engaged in commercial, industrial or professional activities. Pretty straightforward, right?

Well, because this definition is so broad, it is clear to see that it encompasses many different forms and types of business.

Related Read: What Can You Do With A Business Degree?

It is also important to note that business structures vary, with the four primary ones being sole proprietorships, partnerships, corporations and limited liability companies. These distinctions are crucial for defining business goals and performance and for legal and tax purposes.

Common Business Structures

A sole proprietorship is a business owned and operated by a single person, so there is no legal separation between the business and the individual. This also means that the business owner is liable to him- or herself for profits and losses.

A partnership is similar to a sole proprietorship, but this includes operations amongst two or more owners. Generally, the benefit is that the business can share more resources and liabilities are spread across more owners.

Related Read: Top Universities For Business In The UK

A corporation is when a group of people act together as a single entity. Most commonly, owners of a corporation are shareholders of that company. Incorporating a business in this way means that owners are not personally liable for financial or business obligations, but corporations still tend to have unfavourable taxation rules.

As such, corporations may choose to become limited liability companies (LLC): a private company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested. While all of this may seem like crossing the border into dry legal jargon, it is essential to make distinctions between businesses as it helps to understand what business constitutes.

Perhaps more interestingly, it is worth looking at where business stems from and whether it has changed throughout its existence in its purest form.

The History

Business as we know it can be traced back 3,000 years to India and China, where companies – with structures resembling sole proprietorships, partnerships and corporations. At this time, they began entering into contracts and owning property, essentially setting up the basic frameworks of business that we use today.

From 1500 AD, we see the first few government-backed companies, like the Dutch East India Company and British East India Company, taking on global business challenges and exchanging goods far away from home.

After the Industrial Revolution in 1790, business changed every 50 years or so, shaped by new inventions, trade and changing consumer habits.

For students interested in learning the history of business, it might help to explore environments that are rich in these types of history. Attending a Cambridge summer school, for example, opens up doors to examining early economic systems, understanding how trade shaped political structures, and studying the evolution of business institutions within a city known for scholarship and innovation.

Businesses and Global Trade

When infrastructure in many parts of the world began to evolve and improve, it lowered transportation costs. The business world saw an exponential increase in global trade. Today, it is unimaginable that a business would have to be constrained solely within the borders of a single country.

Eventually, business management took off as a career for people to pursue and throughout the 1900s, the business potentials began to appear endless.

That being said, business has not always been smooth sailing throughout history. The Great Depression in the 1930s and the financial crisis of the 1970s are just some examples of global economic setbacks that slowed down the progress of business.

Even so, these setbacks shaped the way people thought about business, its risks, but also it’s potential. Businesses have played a vital role in human history and society, and it is undeniably going to continue to do so in the future. The question remains, however, what can we expect in the future?

The Future

I would argue that two primary factors will shape business in the future, and they have started to do so already. What we can expect, therefore, is that they will continue to play a much more significant role worldwide.

Firstly, we need to consider the impact of digital transformation. This sounds like a rather big word, and maybe it might appear to lack any real meaning, but it is perhaps the best way to capture the role of technology in business and society.

Digital transformation essentially refers to the novel use of digital technology to solve traditional business problems. These digital technologies enable new types of innovation and creativity, rather than simply supporting traditional methods. Think artificial intelligence, e-commerce, fintech, entirely new business models… the list goes on.

You have probably already experienced the digital transformation without even knowing it. For instance, when you purchase clothes online, your package is delivered within a day or two.

This is groundbreaking stuff, and it is only the beginning. Businesses are constantly researching and looking into new ways of operating, interacting with customers and driving innovation.

Corporate Social Responsibility

Another major trend in the business world is the notion of Corporate Social Responsibility (or CSR). Corporate social responsibility is a self-regulating business model that helps a company be socially accountable — to itself, its stakeholders, and the public.

This is a broader response to growing concern and knowledge about the role of businesses in society. They are sometimes very big actors and ought to be held accountable for their actions – whether good or bad.

CSR can mean anything from the impact that a business has economically, socially, politically or environmentally. In other words, it is when a business operates to enhance society and the environment instead of having adverse effects on them.

There is an increasing number of regulations regarding CSR, but the companies themselves have brought forward some CSR policies.

Examples of CSR may include a clothing company committing to not use child labour in any part of its supply chain or any company vowing to source its raw materials only from ethical sources. Take Starbucks, for example.

This coffee giant has consistently demonstrated a keen commitment to corporate social responsibility, community and well-being. It has ensured that 99% of its coffee beans are ethically sourced. It is a vital player in environmental consciousness, particularly in its building of stores. It has encouraged its employees to partake in community service.

The Road Ahead

CSR is a growing trend, and companies nowadays will have a hard time avoiding it due to increased consumer awareness and demand for societal and environmental accountability.

There are so many possible business trends that may surface within the next 5, 10 and 100 years – some may even be impossible to conceive of now. But that is the beautiful nature of business innovation and creativity.

Can you think of possible factors that might dramatically change the world of business anytime soon?

Are You A Motived Student Aged 13-18?

If you are looking to build upon your Business management skills or learn Economics at the University level, then attending a summer school is for you. An online summer school might even be a great idea if you want to study at the comfort of your own home.

Our summer schools are both online and residential, allowing you to network with like-minded students from around the world. Stay ahead of your competition by attending our business summer school.

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While many history departments of American universities prefer to keep business as a separate discipline, HBS entrepreneurship professor Geoffrey Jones encourages the examination of history as a way to better understand contemporary management issues.

To that end, Jones and Franco Amatori, a professor at Bocconi University in Milan, co-edited Business History around the World (Cambridge University Press 2004), a report on the current state of business history worldwide. Recently Jones took time to explain the importance of this new book, to which he also contributed chapters.

Cynthia Churchwell: What inspired your work analyzing the study of business history around the world?

Geoffrey Jones: There were two main factors driving our desire to bring together this survey of the current state of business history worldwide.

First, there has been an explosive growth of research over the last decade. Ten years ago our knowledge of the history of business was heavily concentrated on the cases of the United States, Japan, Britain, Germany, the Netherlands, and Scandinavia. Since then there has been exciting new research on the business history of other European countries, especially Italy and Spain, on many Latin American countries, especially Argentina, Colombia, and Mexico, and on Chinese-speaking communities. Much of the best research is only available in local languages.

Business historians have also widened their research agendas. Understanding the evolution of the strategies and structures of large manufacturing corporations remains important, but a new generation of researchers has explored business networks, the family firm, knowledge creation and transfer, public policy and business, and a host of other topics. We wanted to bring together this new literature and perspectives and make it accessible, in English, to a broader audience.

Additionally, we felt that the moment was opportune for such a survey because the discipline of business history is at a crossroads. There are some researchers who wish the subject to be embedded firmly within the discipline of history, and to address the primary concerns of that discipline. In the United States, many history departments are currently heavily concerned with topics relating to culture, ethnicity, and gender. There is often an unwillingness to relate these important topics to business. Other scholars, including myself, perceive of business history as playing a central role in enhancing our understanding of key issues in contemporary management and business administration. The book provides a position statement of where we are now, which we hope will enrich the debate about the future direction and research agenda of the discipline.

Q: How does this new work differ from your previous research on multinationals?

A: This new book reflects my longstanding interest in the diversity of the business past. Much of my own research has been concerned with the historical evolution of multinationals. However, although research on this topic has often focused on high technology manufacturing companies, I have written extensively on the service sector, on business groups and alliances rather than hierarchical corporations, and on the different ways the entrepreneurs and firms of different countries have pursued strategies and organized their businesses. The contributors to this new book bring out this rich diversity on a much broader canvass.

Q: What have you learned about the success and impact of businesses around the world?

A: This book shows how entrepreneurs and firms have occupied center stage in driving the wealth of nations. It also demonstrates that there has never been a single model for successful or unsuccessful capitalism.

To give only one example, business and economic historians have often taken a skeptical view of the merits of family-owned and -managed firms. Harvard Business School’s Alfred Chandler, the doyen of business historians, famously ascribed Britain’s relative economic decline to the United States from the late nineteenth century to that country’s proclivity towards family or “personal capitalism.” This was contrasted with the separation of ownership and control and the growth of professional management seen in the United States. That debate continues. But this book does report compelling research that shows that, historically, family ownership and management in many countries has been a dynamic force. Leading firms such as Michelin in France, Heineken in the Netherlands, or Cargill or Mars in the United States are the tip of a huge iceberg of successful and long-lived family firms worldwide. Even today around a third of Fortune 500 companies are family controlled.

Business and economic historians have often taken a skeptical view of the merits of family-owned and-managed firms.

It may sound a simplistic conclusion that there has never been “one best way” of achieving business success. However, this historical experience stands as a powerful corrective to over-simplistic management fads and fashions, and to slavish transfers of management systems and practices that might work well in one country but can be disastrous in another.

Q: What are some of the most important similarities and differences you found in comparing British and Dutch business history? How do the histories of these countries relate to that of the United States, considering that all three have been large foreign direct investors?

A: Keetie Sluyterman and I intended our chapter comparing British and Dutch business history to be provocative. The business historians of these two countries have frequently made comparisons with the United States, and sometimes Germany. Generations of British business historians explained their country’s economic “failure” by establishing what it did “wrong” compared to U.S. or German business. They then explained this by identifying idiosyncratic factors in Britain’s development, such as the class system, or an alleged “anti-industrial” bias of its social elite, or the post-1945 flirtation with socialism and extensive state intervention. We maintain that comparisons which use the United States as a benchmark can be misleading. The United States is an idiosyncratic country by virtue of its size and growth, high levels of entrepreneurial energy, legalistic culture, and a number of other unusual features.

In our essay we show that the business systems of Britain and the Netherlands shared many similarities. Both countries had an imperial and mercantile heritage. Family business stayed important. The service sector was strong. Multinational activity was extensive and persistent. The two countries even shared the ownership of two of the world’s largest multinationals, Shell and Unilever. Many allegedly distinctive features of British and Dutch capitalism turn out to be part of a wider pattern for countries with shared geographical positions, cultural orientations, and historical patterns of development.

It is a paradox that in a global world so much research on business history remains trapped within national borders.

There were some significant differences, however, which help to provide explanations behind the divergent performances of the two countries, especially the higher levels of productivity seen in the Dutch economy since the Second World War. The Netherlands has provided much higher levels of skill training for its workers than Britain. Dutch firms also preferred to recruit people with an engineering or technical background, while traditionally British managers were chosen on the basis of “character.”

The firms and entrepreneurs of the United States, Britain, and the Netherlands have shared one common characteristic over the last 150 years—an enthusiasm for investing abroad. Historically there have been huge differences in national propensities to engage in foreign direct investment. Britain held almost one-half of total world FDI before 1914. The United States replaced Britain as the largest foreign investor after the Second World War. The Dutch were also massive foreign investors given the size of their country. Between 1914 and 1980, the U.S., Britain, and the Netherlands together accounted for between two-thirds and three-quarters of total world FDI. It was only in 1980 that German FDI exceeded that of the Netherlands, even though the former’s population was four times larger.

Q: What do you think are some frontiers of business history still to be explored?

A: It is a paradox that in a global world so much research on business history remains trapped within national borders. I believe that the most productive research agenda will move away from such parochialism towards exploring key issues in an internationally comparative framework. Within this context, I would like to see attention move beyond a strong emphasis on the top-level strategy of firms towards seeking a deeper understanding of how firms work. Much management theory stresses how firm-specific resources—especially knowledge—accumulate over time, and become embedded in distinctive routines or cultures which shape the competitive advantage of firms. Business historians are in a unique position to explore this process over time, and to deepen our understanding of it.

Q: Where do you see your research taking you next?

A: I continue to be fascinated by the role entrepreneurs and firms have played in integrating national economies over the last two centuries. This global integration has driven much of world economic growth. The process explains, in part at least, the current patterns of wealth and poverty in the world today. I believe the special skills of business historians—based on their ability to look deeply inside firms over long time periods—can make a major contribution to understanding how this was done, and with what consequences.

The project I am currently working on examines the globalization of the world personal care or beauty industry over the last fifty years. It is concerned with explaining how an industry fragmented on national lines has come to be concentrated in the hands of a small number of global corporations, and in turn to consider the impact of this outcome. I hope to use the lens of this large and extremely fast-growing industry, which influences the self-image of so many people, to provide deeper insights on the business, social, and cultural dimensions of globalization.

Business amidst World Wars

When the First World War broke out in 1914, and the Second in 1939, the ubiquitous role of business in international affairs could no longer be understated. 

During this time of conflict, global businesses were pivotal in the production of military goods, weaponry and advanced machinery (such as aircrafts and tanks). Factories provided employment and cheap sources of income for families with a relative at war, and offered manufacturing jobs to returned soldiers during the period of reconstruction.

The post-war era saw the rise of multinational corporations that had gained economic and political clout. Through a monopoly on intellectual and technological property, these corporations were fundamental to victories during the military conflicts of the 20th century, and were bolstered by shifting economies in the post-war era. 

In the United States, for example, government leaders believed that future international stability was dependent upon economic growth worldwide, including in un-industrialised countries.

Rise of management theories

Like the management theories that emerged from the Industrial Revolution, the post-war period also saw an influx of new theories still used by modern businesses today. These included:

Human Relations Management Theory

Elton Mayo developed this theory at Chicago’s Western Electric Hawthorne Plant in the 1920s and 1930s, arguing that the success of business was directly linked to human interactions and employee performance. 

His ideas, now widely known as the Hawthorne Effect, highlighted the importance of individual and group dynamics in increased productivity.

General Systems Theory

General Systems Theory was developed by biologist Ludwig von Bertalanffy in the 1940s, stressing that external factors can be toxic to a productive work environment. 

As with the human body, the overall productivity of a business is a sum of all its parts, including internal and external efficiency. When one component of a corporation is not working properly, the rest of the organisation will be negatively impacted.

The post-war period saw businesses shift from strictly money-making models to systems of operation that relied on human relations and group dynamics.

Contemporary Business Landscapes

Information age and technological revolution

The era following the post-war period is often known as the information age. 

The information age saw a rapid shift from traditional industries to an economy centred around information technology. This technological revolution, taking place throughout the latter half of the 20th century, fundamentally altered the functions of modern business.

In particular, information technology has enabled businesses to attain a greater reach via email, computerisation, social media and global communications. The rise of automation has also reduced production time, and increased understanding of consumer profiles and public needs.

Technology has also shaped new and innovative business models, driving businesses to become increasingly complex and compliant with new legal and ethical requirements.

Globalisation and business dynamics

The modern era of globalisation has had a profound impact on international business practices.

Globalisation has decreased the cost of manufacturing, allowing companies to offer goods at a lower price to consumers. This has increased standards of living for many, as well as increasing access to a wider variety of goods.

As an increasing number of nations are involved in trade development, economic globalisation has created a worldwide-interconnected economy that’s massive in both scale and degree of innovation. With that said, there are some challenges presented by modern business dynamics. 

To start, globalisation is generally an expensive endeavour, requiring businesses to invest a great deal of capital into effective globalisation strategies. 

It’s also led to increased economic competition and a significant surge in the exploitation of natural resources, contributing to the increasing threat of climate change in the 21st century.

Contemporary Business Theories

Strategic management theories

As with previous developments in business and industry, globalisation has led to the emergence of several unique business theories. These include numerous strategic management theories, which guide decision-making processes and increase the efficiency of multinational corporations. These include:

Competition‐based theory. The main business objective is to maximise long-term profit, and develop a sustainable competitive advantage over other businesses.

Resource‐based theory. A company’s competitive advantage is found in its internal firm resources, competencies and capabilities.

Survival‐based theory. The theory that an organisation must continuously adapt to its competitive environment if it is to survive.

Human resource-based theory. The idea that human factors of an organisation are the most critical elements in the strategic process, building upon several post-war management theories that centred human relations.

Agency theory. Emphasises the importance of the relationships between company owners and company managers in the global context referred to as shareholders and agents.

Globalisation has also seen the adoption of concepts including SWOT analysis – a strategic management technique that’s used to help an organisation identify its relevant strengths, weaknesses, opportunities and threats.

Sustainable business practices

Globalisation in the modern era has also seen a shift towards sustainable and socially responsible business practices. Cultivated as a response to increased labour organising and ethics, as well as the threat of climate change, this development has seen the creation of corporate social responsibility (CSR). 

CSR is a business model that helps a company remain socially accountable to itself, its employees, its stakeholders and agents, and the public (consumers). CSR encourages international business to self-regulate in alignment with the public good, while contributing to societal goals of philanthropic, activist or charitable endeavours.

Looking Ahead: Future Trends in Business

Technology and AI in business

The 21st century has witnessed an unprecedented increase in emerging technologies, perhaps best illustrated by the rise of artificial intelligence (AI) in business. 

AI facilitates data-driven decision-making, enables businesses to make more accurate and time-effective decisions, and provides customers with personalised experiences that increase consumer satisfaction. 

Furthermore, AI can analyse data at a much faster pace than the human brain, allowing businesses to streamline previously complex processes of innovation.

Beyond artificial intelligence, there are also several trends in automation that will likely have an impact across industries. Take, for example, process automation, which could lead to more cost-effective business strategies, increase productivity and customer satisfaction, and produce scalable processes.

Adapting to changing consumer behaviour

Businesses are also in the process of adapting to changing consumer preferences and behaviours. 

With the emergence of digital technologies and increased means of connecting with consumers at each stage of the customer journey, consumers are able to receive more personalised recommendations tailored to their interests and digital profiles. 

Similarly, the rise of online technologies has allowed businesses to become increasingly digital in their global reach, with a rise in mobile applications, updated web pages, and virtual options for consumers to access products. 

These dynamic market shifts require modern businesses to prove increasingly flexible and innovative in their response to changing societal and economic norms.

The history of business has been defined by a series of transformations for centuries. 

From the emergence of monetary currency to the business theories engendered by the Industrial Revolution, to post-war innovations and the contemporary rise of automated technologies, business and business theory has consistently shaped and reacted to changing societal and economic norms.

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This paper will blend historical with managerial analysis to understand the process of institutional evolution from the Eighteenth through the Twenty-First Centuries around the world. Using Oxford as the lens to understand global business history, most of the class sessions will take us outside of the Said Business School in the museums, libraries, and colleges of Oxford. The course is aimed at non-historians who want to understand better why history matters in the modern world, how institutional change occurred, and how entrepreneurs profited from fundamental changes to the world economy. It is also, unusually, a chance to understand how business school teaching operates since the participants will write their own case study and describe how they would teach that case in a class which they might run.

Learning Outcomes for the Course

This paper will probe the evolution of modern management in the United States, Europe and Asia over the past three centuries. The first part of the course will examine how the structure of big business emerged in the United States, Great Britain, Germany, and Japan during the second industrial revolution. We will consider the traditional explanation offered by business historian Alfred Chandler, alternate explanations offered by other leading business historians, and the work of economists, sociologists, and management theorists on industrial evolution. In doing this, students should come to understand the historical development of “varieties of capitalism” around the globe by the middle of the twentieth century. In the second half of the course, we will examine the important role of banks and financiers in the organization of the industrial economy, globalization as a historical phenomena in the transmission of commercial products and fashion, the rise of new technologies during the “information” revolution, and, finally, some lessons to be applied to the “third” (and “fourth”?) industrial revolution. Through these various topics (and the trips to museums, libraries, and colleges) students should be able to use material culture, not simply documents, to contextualize economic change. They should also be able to use historical differences among industrial countries to better analyse the future of the global corporation.