Managerial coordination can replace market mechanisms in large organizations.
Chandler's 1977 argument, written as the deliberate counterpart to Smith's invisible hand. Where throughput is high and coordination is time-critical, managers displaced markets — the railroads being his case.
In practice
- A railway moving perishable freight across four regions on one timetable employs schedulers rather than buying each leg on a spot market.
- A retailer that once bought haulage by the load now runs a planning department, because the market could not be asked a question fast enough.
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- Economics & Incentives
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- The theories behind every argument about money