IRRATIONALITY AND CONTRADICTION IN ORGANIZATIONAL CHANGE: Transformation in the Corporate Form of a U.S. Steel Corporation, 1930–1987

This article analyzes historical and interview data on one of the largest steel corporations in the U.S. to determine (1) the effects of financial controls on long-term incremental organizational changes, (2) the effects of the environment on the organization, (3) the degree to which organizations structure their environment, and (4) the conditions that transform the corporate form. Findings demonstrate that transformations emerge from crisis due to contradictions within the corporate form and between the corporate form and its environment. The sources of these contradictions include the long-term irrationality of formally rational financial controls, oligopolistic structures, and the state's tax policies. These findings question efficiency arguments in general, but more specifically do not support Alfred Chandler's conception of the "logic of managerial enterprise," which suggests that oligopolistic corporations are efficient because their size provides capital to realize economies of scale, and market share competition sharpens management's skills.