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Americanisation in 20th Century Europe: business, culture, politics. Volume 2

 | 
Nick Tiratsoo
, 
Mathias Kipping

Twenty years after': were the big French industrial enterprises still following American patterns in the mid-1970s?

Pierre Lanthier

Résumé

Qu’est devenue l’américanisation de l’industrie française vingt ans après l’épisode des missions de productivité dans les années 1950? La France des affaires connaissait bien les théories et les méthodes de gestion qui prévalaient aux ÉtatsUnis. Mais les appliquait-elle? L’étude des 20 premiers groupes français en 1976 permet de constater, outre l’amélioration considérable des conditions du marché, une importante vague de concentration industrielle, ainsi que l’adoption de la direction générale au sein du holding, avec des divisions opérationnelles et des divisions fonctionnelles. À travers cette formule, le management à l’américaine s’est introduit durablement dans la grande entreprise française.

Texte intégral

1During the 1950s, French industry, through numerous productivity missions sent across the Atlantic, paid great attention to the organization and the methods of production and commercialization prevailing in the United States. There is no doubt that the French, who had much difficulty rebuilding their economy after the War, were eager to follow what was then considered to be the only way to avoid chaos and communism. The American model was ideological as well as organizational. Was the situation similar two decades later, at the end of the ‘Trente glorieuses’?

  • 1 In 1973, Roger Priouret noted that Jacques Borel, the owner of the Sofitel hotel chain and famous (...)
  • 2 J.-J; Servan- Schreiber, Le défi américain, Paris, Denoël, 1967.

2The American way of producing and marketing was very present in the mind of French political and economic leaders. But its features were no longer those of the 1950s. The notion of productivity was long assimilated. Measuring everything and making ratios out of every aspect of the production was viewed as something self-evident, not to say a bit dépassé.1 Moreover, the crusade aspect given to productivity had disappeared. The fight against communism had moved outside Europe and it did not focus on production methods anymore. In fact, the situation was reversed. In the mid-1960s, West Europeans feared an ‘invasion’ from American multinationals more than from Soviet troops. In 1967, a book was published that became an instant bestseller: Le défi américain, by the journalist and politician Jean-Jacques Servan-Schreiber.2 This essay had a simple message: the Americans were leading the world because of the better organization of their business and the superior training of their businessmen. The French should pay attention to the way Americans functioned if they did not want to be at their mercy. They should abandon their colbertiste attitude (praise for authority and hierarchy along with excessive dependency on the State) in favor of a new policy: management and its corollary, the decentralization of decision making.

3In the early 1970s, the word Americanization’ was not much in use in France. Contacts with the USA did not mean systematic and blind imitation of what went on the other side of the Atlantic. It meant familiarity with the American experience, understanding the basic concepts, and using the same vocabulary. French business literature dealt regularly with the many (and often conflicting) schools of management existing in the USA; managerial gurus like Peter Drucker, Sterling Livingston, David Ogilvy, and Bruce Scott, to name just a few, were regularly quoted and interviewed. Words like management, marketing, consumerism, and brainstorming were not even translated: they belonged to the common language of French business administration. The economic and financial press moreover praised not only adapting, but also competing with the various American models.

  • 3 This list has been established on the basis of the value of the shares and reserves, as compiled b (...)

4But the question remains: to what extent did this new discourse correspond to new practices within French enterprises? Actually, interest in Americanization echoed major changes in business organization. From the mid1960s to the oil crisis of 1973, top French firms and groups witnessed one of the most important waves of concentration and restructuring in their history. This chapter will examine this process through the analysis of the policies adopted by the 20 most important enterprises and groups in France in 1976.3 These companies are: Electricité de France (EDF)*, Compagnie française des pétroles (CFP)*, Elf-Aquitaine*, Saint-Gobain-Pont-à-Mousson (SGPM), Rhône-Poulenc, Péchiney-Ugine-Kuhlmann (PUK), Michelin, Gaz de France (GDF)*, Shell française, Sacilor, Denain-Nord-Est-Longwy (DNEL), Peugeot-Citroën, Imetal, Renault*, SNCF*, IBM France, SEITA*, Compagnie générale d’électricité (CGE), BSN-Gervais-Danone, and Esso sa. Using these examples, we will pay attention to the factors encouraging change and we will describe the nature of these transformations.

the factors behind industrial change

5It would be an oversimplification to assume that French industry blindly followed American schools of management irrespective of the economic situation. The change that occurred after 1964 was too important to be attributed exclusively to some fashion in managerial thought. Other factors intervened in a more fundamental way. Four of them deserve to be mentioned: the impact of the European economic union, the public sector’s policies, the growth of mass consumption, and the maturation of old industrial sectors.

  • 4 J. Fontaine, “Ce que vaut la marque ‘France’”, L'Expansion, December 1976.

6The Common Market was only ten years old at the end of the 1960s. And yet, its influence on French external commerce was significant. In 1959, French exports were valued at 27.7 billion francs; in 1975, at 223.3 billion! Between these two years, the volume of French exports tripled, making France the world’s fourth largest exporter in 1975, after the USA, West Germany and Japan. The same year, the nine countries then forming the European Union received 49.2 per cent of French exports, as opposed to 31.1 per cent in 1959.4 The role played by the Common Market can be seen in the foreign activities of our 20 groups and companies. The percentage of foreign activities in total sales in 1973 was, for the majority of them, in the double digits. Groups such as Renault, Peugeot, Michelin, Imetal, PUK and CFP made more than 40 per cent of their sales abroad. Direct exports were still predominant in these activities, especially for groups like DNEL and IBM France. But for an increasing minority including SGPM and Michelin, sales made by foreign subsidiaries were more important than exports. The sudden expansion of foreign markets gave a solid impetus to the concentration and reorganization of firms.

  • 5 Ibid.; see also C. Stoffaës, “La restructuration industrielle, 1945-1990”, in M. Lévy-Leboyer and (...)
  • 6 See P. Fridenson, “Atouts et limites de la modernisation par en haut: les entreprises publiques fa (...)
  • 7 F.-F. Marsal, “Mort et résurrection des nationalisations”, L’Expansion, February 1973.
  • 8 Entreprise, 21 December 1973.

7And yet, this factor was far from being the only one. After all, the percentage of exports on GDP grew from 13.8 per cent in 1959 to only 16.9 per cent in 1974.5 The interior market remained the most vital for French business. And among the factors that stimulated this market, the role played by the public sector must be stressed. The State had significant control of the economy through the nationalized enterprises.6 According to OECD statistics, during 1965-1970, the public sector in France employed 12 per cent of the active population and generated 11 per cent of sales. More importantly, it was responsible for 33 per cent of national investment.7 For a group like CGE, 25 per cent of whose sales originated in the public sector in 19728, these investments stimulated organizational restructuring and new industrial agreements with competitors.

  • 9 Entreprise, 22 December 1972 and 9 March 1973; M. Kipping, “Inter-Firm Relations and Industrial Po (...)
  • 10 On the history of the Plan Calcul, see P. Mounier-kuhn, “Le Plan Calcul, Bull et l’industrie des c (...)
  • 11 M. Herblay, “Rhône-Poulenc change de tête”, L'Expansion, July-August 1973.

8The public sector also encouraged regrouping in the private sector. The State pushed Wendel-Sidelor and Usinor to associate together in the Steel complex at Fos, and in exchange agreed to lend 2.6 billion francs for its construction.9 In 1966, France proceeded with its ‘Plan Calcul’ in order to insure the autonomy of the French computer industry. This Plan encouraged industrial groups like CSF and Thomson to merge in 1967 and, along with CGE and Schneider, to create a joint venture that benefited from the financial help of the State (via the Compagnie internationale pour l’informatique) in order to compete with IBM and other American multinational.10 In 1966, again, Wilfrid Baumgartner, previously Minister of Finance and then PDG of the group Rhône-Poulenc, had been asked by the State to restructure the French chemical industry. In 1968-1969, it was decided to distribute the different specialties among some companies, public as well as private. Through this process, Rhône-Poulenc acquired firms like Pechiney-Saint-Gobain.11

  • 12 A. Babeau, “La consommation de masse”, in Lévy-leboyer and Casanova 1991: 425ff.
  • 13 Entreprise, 12 April 1974. During the 1960s, the average sales growth of GDF was 17 per cent (see (...)
  • 14 Entreprise, 13 July 1973.
  • 15 -Entreprise, 16 February 1973.

9A third factor for industrial restructuring was the growth of mass consumption. From 1949 to 1979, the standard of living tripled12, a growth that was as sudden as it was impressive. Immediately after the War, France was slow to follow the rest of the West in developing mass consumption. But after 1960, its catch up was tremendous. To give a few examples, GDF sold 65 billion thermies of gas in 1971 but 140 billion in 197313; while the French annual production of tires grew from 25.8 million in 1968 to 41 million four years later.14 And yet, in the early 1970s, France was still behind its northern neighbours in fields like household appliances. In 1972, some 150,000 hi-fi Systems were sold in France, as opposed to 600,000 in Germany.15 There was still room for development.

  • 16 Entreprise, 13 September 1974. On these stores, see J.-M. Villermet, “Histoire des ‘grandes surface (...)

10This sudden increase of mass consumption in France gave the country a boom in retailing business. As in North America, popular stores and supermarkets spread throughout the regions. In 1973, there were some 4,500 department stores in France with total sales of 77.5 billion francs, which included 277 hypermarkets like Carrefour and Euromarché (26.7 billion F); 3,000 supermarkets like Viniprix and Leclerc (28.6 billion F); 318 ‘grands magasins’ like Lafayette or Printemps (16 billion F); and 761 popular stores like Prisunic (13 billion F). Besides these stores, there were some 2,100 superstores specializing in household products such as furniture (Conforama), electrical appliances (Darty), and books and records (FNAC).16

  • 17 Kipping 1996: 12ff.

11Finally, the maturing of old industrial sectors also played a part in the regrouping of French industry. Sectors like Steel, which up to recently had been dominated by Nineteenth Century bourgeois families, now were forced to contemplate mergers in order to survive. With the help of the State and after long negotiations, these companies joined together to become giants like Sacilor and DNEL.17 Taken as a whole, French industry’s markets witnessed major transformations that demanded similar strategic and structural changes within a period of only a few years.

integrating strategies

  • 18 M. Lévy-leboyer, “The Large Corporation in Modem France”, in A.D. Chandler and H. Daems (eds.), Ma (...)

12The adopted strategies reflect the impact of the new market situation. Before the War, vertical integration prevailed in France. There had been for sure numerous cases of horizontal integration, but they were risky and unstable. After 1945, and more so after 1960, the new markets gave a strong impetus to finished products, be they destined for mass consumption or for collective equipment.18 However, the push forward was not itself a sufficient reason to adopt American strategies of development. In the United States, the growth of such markets has been gradual since World War One. Considering that many of these markets reached maturity and could be renewed only through the constant creation of new products, American industry adopted diversification strategies for its expansion. By the end of the ‘Trente Glorieuses’, France had not reached that stage. The average Frenchman was far from having the consumption level of North Americans and his northern European neighbours. But he was catching up fast and consequently he provided a very promising market for French industry. The ideal would have been, then, to follow horizontal integration strategies that would eventually lead to diversification of product lines.

13Among the enterprises we have chosen to study, some had achieved such an integration many years before. But for the others, the road was very long. And that explains why they took separate ways as far as integration strategies were concerned. Among them, only seven remained stable. They were either monopolies from the public sector (EDF, GDF, SNCF, Seita) or subsidiaries of foreign multinationals (IBM France, Shell France and Esso sa). The nationalized companies began their horizontal integration immediately after the war and the State of monopoly in which they were confined did not allow vertical integration or diversification. As far as the subsidiaries of foreign multinationals were concerned, they depended on the policies of the parent firm.

14But the majority of the big companies underwent major changes in their orientations. Out of the 20 in our sample, thirteen acquired or disposed of branches through mergers, absorptions, or transfers after 1960. Among them, three were from the public sector and ten from the private sector. More importantly, they all shared the fact that they belonged to oligopolies and that they wished to increase their part of the market by getting doser to it, some through vertical integration, and others through diversification. According to the distance they had to cover to reach these markets, groups and enterprises would adopt different strategies.

  • 19 Entreprise, 22 December 1972, 20 December 1974 and 3 January 1975; L'Expansion, January 1975. See (...)
  • 20 L'Expansion, March 1974.
  • 21 Entreprise, 20 December 1974; Le Nouvel Économiste, 5000 entreprises, 1975, p. 191.

15Companies dealing with the first transformation of raw material tended not develop strong vertical integration. They had already reached economic maturity and the best they could achieve was horizontal merger followed by rationalization and modernization. This was the case with the Steel industry. Since 1945, the various companies forming this sector had gradually merged to finally form two big groups, Sacilor and Denain-Nord-Est-Longwy (DNEL). Many of the absorbed companies came with vertical connections, but on the whole they made a point of separating Steel production and its transformation. DNEL, for instance, consisted of two different units, Usinor, which absorbed many Steel firms from 1948 to 1964, and Vallourec, a pipe producer which exported 80 per cent of its production and was created in 1957 from the vertical connections of Usinor. The two units worked separately within the same group.19 But the most decisive move, at the end of the 1960s, was the rationalization of the Lorraine Steel industry and the construction of a modem Steel complex at Fos, on the Mediterranean. Both Sacilor (which originated from the merger of Wendel-Sidelor with the Compagnie mosellane de sidérurgie in 1973) and Usinor agreed, alongside the French Government, to participate in this project.20 Horizontal integration was the main policy. A variation on the same theme was made by Imetal, a holding created in 1974 to regroup Le Nickel-SLN, Pennaroya and Mokta, three non-ferrous mining companies with more than 70 subsidiaries in 16 countries, each specializing in distinct metal production (nickel, uranium, copper, etc.). As one observer put it, Imetal was a case of “horizontal diversification”21, where each autonomous sector helped the other financially.

  • 22 L'Expansion, July-August 1973 and March 1974; Entreprise, 21 December 1973, 4 July 1974, and 11 Oc (...)
  • 23 Le Nouvel Économiste, 28 June 1976; G. Hirigoyen, “Brève histoire de l'O.P.A. de B.S.N. sur Saint- (...)

16A more complex situation occurred in the Chemical, electrical manufacturing, and electrometallurgical sectors. Represented by Saint-Gobain-Pont-à-Mousson, Rhône-Poulenc, BSN-Gervais-Danone, Compagnie générale d’électricité, and Pechiney-Ugine-Kulhmann, these had not reached their maturity yet. The new markets offered them many possibilities, so much so that their strategies were marked by uncertainty. A new process could threaten their position, a new market could encourage them to integrate vertically. Actually, diversification and, within this process, vertical integration towards finished products, was used by all. And as the names of these groups suggest, they were all the results of mergers. Their recent history was a mixture of regrouping under the influence of the government, as was the case with Rhône-Poulenc; of vertical restructuring, like Saint-Gobain with Pont-à-Mousson in 1969 towards building materials; agreements with the competitor, like CGE with Thomson in 1969 in what was called the ‘petit Yalta’; or limited diversification with parallel vertical integrations, as was the case with the series of mergers, from 1966 to 1971, between Pechiney, Trefimétaux, Ugine-Kulhmann and Produits Azotés.22 An interesting case was BSN: this resulted from the merger in 1966 of Boussois (a glass manufacturer) with Souchon-Neuvesel (in packaging), and then the takeover of Gervais-Danone (a food producer) in 1972, after a failed bid to gain control of Saint-Gobain in 1968. This vertical integration permitted the group to get closer to the mass consumption market. In 1975, the food division accounted for 57 per cent of the group’s Consolidated sales, as opposed to 27 per cent from the glass division and 16 per cent from packaging.23

  • 24 Les dossiers d'Entreprise, November 1974; Archives du Crédit Lyonnais, Paris [hereafter ACL]; Entr (...)

17The oil and gas industry, represented by the Compagnie française des pétroles, Elf-Aquitaine, Shell française and Esso s.a., was more stable at this time. There were no major mergers in three out of the four groups. Only Elf-Aquitaine was the creation of a merger, the child of two public companies, the Société nationale des pétroles d’Aquitaine and Entreprises de recherches et d’activités pétrolières, which, in 1976, wanted to intensify research and activities outside France. It is interesting to note that these two State controlled companies associated to create ATO in 1971, and launched joint ventures with other French groups (like Imétal for Aquitaine in 1974, or SGPM for CFP, with Carnaud-Total Interplastic, also in 1974). Although their main activity covered the oil industry from extraction to distribution in gas stations, they were also interested in petrochemistry and research for new products, and as a result looked for collaboration with the private sector, with the full encouragement of the government. On its side, Esso s.a. had a subsidiary, Esso Chimie, but its main activities were oriented towards oil production, refinery and distribution; the same applied to Shell française.24

  • 25 Entreprise, 8 December 1972 and 7 February 1975. J.-L. Loubet, Histoire de l'automobile française,(...)
  • 26 Loubet 2001a: 391. J.-L. Loubet, “Peugeot: histoire complexe d’une croissance externe (1974-1978)” (...)
  • 27 In 1972, Michelin sold 35 per cent of the radial tires sales in the USA (Entreprise, 27 April 1973 (...)
  • 28 Le Nouvel économiste, 26 November 1976. A similar dynamism can be found in the luxury business in t (...)

18And finally, the companies specializing in services (EDF, GDF, SNCF) or finished products (Renault, Peugeot-Citroën, Michelin, Seita, IBM France) opted for horizontal integration. The public companies had integrated a long time ago. The two automobile companies had a limited diversification: 87 per cent of Peugeot’s sales in 1971 and 81 per cent of Renault’s sales in 1974 came from the automobile sector.25 In fact, the most significant merger was the absorption of Citroën by Peugeot and Berliet by Renault.26 The case of Michelin is most significant here: this company, as we know, had given up on vertical integration in order to expand further abroad. Thanks to the radial tire, this group was able to compete successfully with its American competitors27 and it became a multinational. In fact, Michelin acted as a leader for a new generation of consumer oriented companies in France. Firms like Rossignol (skis), Bic, Moulinex, and SEB (tefal), were very successful inside as well as outside France. Their expansion was recent and horizontal. Some of them diversified but into neighbouring product lines. Rossignol started producing tennis rackets, while Bic added disposable lighters and razors to disposable pens.28 The dynamism of consumer markets gave young entrepreneurs the opportunity not only to exploit such opportunities, but also expand abroad.

  • 29 Annual reports of the concerned companies, ACL.

19It is interesting to see how the development of French industry during this period benefited French multinationals. Considering the importance of exports, as we have already seen, it was inevitable that French industry would implant subsidiaries abroad. Among the 20 groups, only five did not have foreign subsidiaries; four had fewer than five; another four had between ten and 19; and seven had 20 or more. Some groups, like Michelin, CFP and Imetal, had more than 50 per cent of their subsidiaries outside France.29 But creating a subsidiary in the USA remained secondary compared to investing elsewhere in the world. Seven of them did not have any American subsidiary, while all the others had fewer than five. French industrial strategies had been influenced more by market possibilities than anything from America. Flowever, the same cannot be said about structures.

the americanization of the french holding

  • 30 M. Lévy-Leboyer, “Le patronat français, 1912-1975”, in M. Lévy-Leboyer (ed.), Le patronat de la se (...)

20If business strategies depend primarily on the nature of the market, business structures are more open to managerial schools or fashions. And yet when we examine where the big enterprise leaders studied, we have to admit that very few of them went to the USA to receive an education. In 1973, the top executives were still graduating from the French Grandes Écoles, and especially from Polytechnique and Sciences Po. Businessmen like Claude Etchegaray, PDG of LMT-ITT, who combined his Polytechnique background with a diploma from the Harvard Business School, remained the exception. On the other hand, the majority of this group had an education in more than one École. Many attended two different schools like, for instance, HEC and Law.30 This generation of top executives had a better education than its predecessors, but this did not extend to the American schools of management or engineering.

  • 31 L'Expansion, June 1974; Entreprise, 11 January 1974.

21Immediately under them, however, the situation was different. Many, like Roland Rieutort, director at Rhône-Poulenc, and Bernard Hanon, director at Renault, had direct experience of the USA: the first was previously vice-president at Mobil Oil, while the second taught at Harvard.31 The upcoming generation was familiar with the different American managerial schools. A transition seemed to be on the way. But interestingly enough, it was preceded by one aspect of Americanization that became standard practice in the French enterprise: the establishment of the executive committee.

  • 32 Lévy-leboyer 1980: 138ff.
  • 33 These figures do not take into account the numerous minority participations most of them had.

22French big industry had for a long time lived with a more decentralized structure than its American counterpart. It preferred holdings or firms with an elaborate network of subsidiaries to integrated companies with few subsidiaries.32 And this form of organization still prevailed in the mid-1970s. Among the 20 companies, only three had fewer than ten subsidiaries, five had between ten and 19, five between 20 and 99, and seven had 100 subsidiaries or more.33 IBM France had no subsidiary and was fully integrated. But it was alone of its kind among the biggest. Moreover, most had more than 10,000 employees, and seven exceeded 100,000. Considering the numerous mergers and restructuring that the majority had gone through over recent years, the necessity for some centralised decision-making structure became apparent.

  • 34 Entreprise, 21 December 1973 and 19 January 1973.

23As mentioned earlier, American management theories in the early 1970s promoted decentralization. Nevertheless, French businessmen were cautious about imitating their American colleagues too slavishly. When interviewed, some showed distrust towards what they called the ‘American conglomerate’, that is a diversified production unit under a decentralized structure of management and power. When asked if their groups were conglomerates, Ambroise Roux, PDG of CGE, and Antoine Riboux, PDG of BSN-Gervais-Danone, insisted on the necessity of a global policy with specific goals. They believed that a conglomerate was at best a transitory situation.34

  • 35 PUK had a ‘North American division’.

24In order to keep the group’s unity, most of them created a coordinating managing board, sometimes called ‘comité exécutif’ or more frequently ‘direction générale’. Its functioning was similar from one group to the other: on the one side, there were the operating divisions, whose number varied according to the production lines of the group and sometimes with an additional division for a specific market abroad35; and on the other side, there were the functional divisions like finance, marketing, research, engineering, and legal services. Only DNEL and SGPM did not have such an institution at their head. DNEL’s two main components, Usinor and Vallourec, and SGPM’s Saint-Gobain and Pont-à-Mousson, all had one each. Indeed, these groups never fully integrated.

  • 36 Fridenson 1987.
  • 37 EDF, Rapport d’activité, compte de gestion exercice 1975; M. Herblay, “EDF aux prises avec le nucl (...)
  • 38 Sacilor and Peugeot-Citroën, annual reports for 1975, ACL.

25But the other groups had a management board. The nationalizations following the Second World War gave French industry a coordinating structure over vast production units. Interestingly, the public sector did not hesitate to borrow ideas from American business organization. And for that reason, it played a key role in the Americanization of French industry.36 When it was created in 1946, EDF had to put together the techniques, traditions and organizations of 1,380 private companies. A ‘direction générale’ was set up in 1948, under the supervision of a board of directors. In 1975, it consisted of three operational and nine functional divisions.37 The private groups had coordinating units as well, but with different shapes and functions. In merged groups where integration proved to be difficult or feasible only in the long run, a ‘directoire’ was set up, under the supervision of a ‘conseil de surveillance’, and managed by three or four executives with often equal power. Such was the case at Sacilor and Peugeot-Citroën. Sacilor resulted from a series of mergers which began in 1950 and ended in 1973. It took many years for the Société des petits-fils de Wendel to associate itself with Sidelor and later with the Société moselane de sidérurgie. Family interests were still predominant. At the foundation of Sacilor in 1973, a decision was taken to create a ‘directoire’ consisting of a president, a general manager and an assistant general manager. In the case of Peugeot, the group adopted the ‘directoire’ formula in 1972. Two years later, with the absorption of Citroën, it adapted it to its new holding, PSA Peugeot-Citroën, and to its two major car subsidiaries, Automobiles Peugeot and Société anonyme Automobile Citroën. The directoire System was a way of giving equality to the major partners in the group. It also fulfilled the same functions as a conventional ‘direction générale’, that is management of operational and functional divisions. In the case of PSA Peugeot-Citroën, its ‘directoire’ was responsible for two operational branches (cars and mechanical activities) and six functional branches (finance, legal services, technical services, external relations, planning and products, and secretary-general).38

  • 39 Annual report for 1975, ACL; Entreprise, 21 December 1973; Laferrère 1987.
  • 40 [Anon.], “Y a-t-il un cas Ambroise Roux?”, L'Expansion, May 1976.

26But more generally, the ‘direction générale’ gave some uniformity to diversified or recently merged groups. In both cases, a similar structure was adopted: at the top, a holding was created and its functions consisted not only of managing portfolios but also of coordinating the activities of the subsidiaries with the help of an executive committee. Two examples will illustrate this. First, there is the case of the Compagnie générale d’électricité (CGE). Formerly, it was an industrial company with many important subsidiaries. In 1968, it became a holding with a ‘direction générale’ federating more than one hundred subsidiaries. This direction had eight operational divisions, each of which gathered many subsidiaries under the leadership of one company. For instance, the electromechanics division, which accounted for 28.6 per cent of Consolidated sales in 1975, was headed by Alsthom; the telecommunications-electronics division, with 19 per cent of the sales, had CIT-Alcatel on top. These divisions were completed with functional branches consisting of Financial, commercial and research subsidiaries. CGE had a decentralized structure, with “véritables Etats dans l’Etat”.39 However, it kept full control over negotiations with the State and with competitors about big markets like nuclear power stations, railways, and telephones. Ambroise Roux, PDG of the group, behaved more like a diplomat than like an entrepreneur.40

  • 41 Annual report for 1976, ACL; L'Expansion, January 1976; Nouvel économiste, 3 May 1976.

27The second case illustrates the product of major absorptions or mergers: Rhône-Poulenc, a group with diversified activities in chemistry. Rhône-Poulenc s.a. was a holding created in 1961, which eight years later took control of two important companies, Progil and Pechiney-Saint-Gobain. With this acquisition, the group consisted of 182 firms. Its sales doubled and its diversification widened (naphtha, pharmaceutical, synthetic fabrics etc.). Soon restructuring became necessary. In 1973, Renaud Gillet was nominated PDG. Rapidly he imposed a new organization. He put an executive committee at the head of the holding, with eight operational and as many functional divisions. The new organization had difficulties in its implementation. It took a long time to marry the subsidiaries of the Chimique Rhône-Poulenc with those of Pechiney-Saint-Gobain. Many officers had to resign.41

28These examples emphasize the federating role of the direction générale over a group. It corresponded to the multidivisional aspect of the American group at that time and it contributed to transform the nature of the holding in France. However, the formula did not prove to be always successful. Tensions remained, and some divisions were neglected in favor of others. Time was required to achieve harmonization within. Yet in the long run, this System Consolidated the spread of management in France. The direction générale standardized the functions of executives, be it in the public or private sector, or even in non-commercial institutions. As a contemporary noted:

  • 42 F. François-Marsal, “Mort ou résurrection des nationalisations”, L'Expansion, February 1973 (autho (...)

In all cases, the economy is shaped by the unavoidable imperatives of advanced technology and by the organizational modalities of big enterprises. The classic prejudices of the ‘old’ textbooks of political economy and of the ideology of nationalization must make way for the conditions of a modem management of the enterprise (or the nation)...From this point of view, the differences between public enterprises and private enterprises are once again condemned to disappear.42

29It must be said nevertheless that management in the big groups collided with the other aspect of Americanization represented by the supermarkets. Tensions existed between manufacturers and the new type of shopkeepers. The grandes surfaces provided extended markets to mass consumption goods and services and, consequently, gave a greater autonomy to commerce in relation to industry. The manufacturers did not have ultimate control over the sale of their products. This new reality, in France as well as elsewhere, shaped managerial activities.

conclusion

30Americanization is not a process that repeats itself from one place or from one period to the other. As many scholars have noticed before, there were many adaptations to local realities, adaptations that permitted long run standardization of manufacturing and management activities, and consequently stimulated international trade. Moreover, Americanization changed with time. The case of France in the middle of the 1970s gives an interesting illustration of the process when it promoted management. France was late in introducing itself to mass consumption but its rate of catch up was rapid and sometimes spectacular. When added to the implementation of the EEC and the investment made by the public sector, it offered a vast market which pushed French entrepreneurs to undergo major concentration and restructuring, and to adopt the new formula of the holding cum ‘direction générale’. That formula had similar functions to those of the executive committee in the American multidivisional structure.

31Did the 1973 crisis stop the process? There is no doubt that the rise of oil prices slowed the growth of consumption, but only for a while. It is also true that the investments involved in the industrial restructuring and in the development of a national infrastructure inflamed financial instability in both the private and the public sectors. But corrections soon followed, such as anti-inflation measures and a stricter financial discipline. Actually, the 1973 crisis led to an adjustment following the excesses that a specific managerial approach had led the Western economy into. And if groups in France had to abandon expanding or diversifying projects, they nevertheless kept the managerial structure brought in during the 1960s and early 1970s.

***

Bibliographie

[Anon.] 1976. “Y a-t-il un cas Ambroise Roux?”, L’Expansion, May.

[Anon.] 1998. Elf Aquitaine des origines à 1989, Paris, Fayard.

Babeau A. 1991. “La consommation de masse”, in M. Lévy-Leboyer and J.-C. Casanova (eds.), Entre l’Etat et le marché: l’économie française des années 1880 à nos jours, Paris, NRF/Gallimard, 1991.

Barjot D. 1996. “Les industries d’équipement et de la construction”, in M. Lévy-Leboyer (ed), Histoire de la France industrielle, Paris, Larousse, p. 412-433.

Beltran A. and J.-P. Williot 1992. Le noir et le bleu. 40 ans d’histoire de Gaz de France, Paris, Belfond.

de Ferrière M. 1993. “L’industrie du luxe en France depuis 1945. Un exemple d’industrie compétitive?”, Entreprises et histoire, 3, p.85-96.

Fontaine J. 1976. “Ce que vaut la marque ‘France’”, L’Expansion, December.

François-Marsal F. 1973. “Mort ou résurrection des nationalisations”, L’Expansion, February.

Fridenson P. 1987. “Atouts et limites de la modernisation par en haut: les entreprises publiques face à leurs critiques (1944-1986)”, in P. Fridenson and A. Straus (éds), Le capitalisme français XIXe-XXe siècle: blocages et dynamismes d’une croissance, Paris, Fayard, p. 175-194.

Godelier P. 1995. De la stratégie locale à la stratégie globale: la formation d’une identité de groupe chez Usinor (1948-1986), thèse de doctorat, Paris, EHESS.

Hachez-leroy F. 1999. L’aluminium français: l’invention d’un marché, 1911-1983, Paris, CNRS éd.

Herblay M. 1973. “Rhône-Poulenc change de tête”, L’Expansion, July-August.

Herblay M. 1975. “EDF aux prises avec le nucléaire”, L'Expansion, May.

Hirigoyen G. 1995. “Brève histoire de l’O.P.A. de B.S.N. sur Saint-Gobain (Décembre 1968 – Janvier 1969)”, in De Jacques Cœur à Renault, Presses de l’Université des sciences sociales de Toulouse (Collection Histoire, Gestion, Organisations, no.3: Troisièmes rencontres, 25 et 26 novembre 1994), p. 369-391.

Kipping M. 1996. “Inter-Firm Relations and Industrial Policy: The French and German Steel Producers and Users in the Twentieth Century”, Business History, 38 (1), p. 1-25.

Klpping M. 1994. “Les tôles avant les casseroles: la compétitivité de l’industrie française et les origines de la construction européenne”, Entreprises et histoire, 5, p.73-93.

Laferrère M. 1987. “Heurs et malheurs de la décentralisation au sein d’un groupe industriel français: la C.G.E.”, in J. Bastié (éd.), Régions, villes et aménagement: mélanges jubilaires offerts à Jacqueline Beaujeu-Garnier.; Paris, Centre de recherches et d’études sur Paris et l’Ile-de-France/Société de géographie, p. l99-225.

Lévy-Leboyer M. 1979. “Le patronat français, 1912-1975”, in M. Lévy-Leboyer (ed.), Le patronat de la seconde industrialisation'Paris, Editions ouvrières, p. 137-188.

Lévy-Leboyer M. 1980. “The Large Corporation in Modem France”, in A.D. Chandler Jr and H. Daems (eds.), Managerial Hierarchies. Comparative Perspectives on the Rise of the Modem Industrial Enterprise, Cambridge (Mass.), Harvard UP, p. 117-160.

Loubet J.-L. 2001a. Histoire de l'automobile française, Paris, Seuil (Coll. UH).

Loubet J.-L. 2001b. “Peugeot: histoire complexe d’une croissance externe (1974-1978)”, Histoire, Economie, Société, 20 (3) p. 405-415.

Marsal F.-F. 1973. “Mort et résurrection des nationalisations”, L’Expansion, February.

Mioche P. 1987. “Le financement public de la sidérurgie: réalité ou illusion d’un contrôle par l’État (1945-1965)?”, in P. Fridenson and A. Straus (éds), Le capitalisme français XIXe-XXe siècle: blocages et dynamismes d’une croissance, Paris, Fayard, p.83-96.

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Notes

1 In 1973, Roger Priouret noted that Jacques Borel, the owner of the Sofitel hotel chain and famous for his obsession with increasing his employees’ efficiency, had the typical behaviour of the French entrepreneur of the 1960s, that is, of the American manager of the 1950s! (L’Expansion, May 1973)

2 J.-J; Servan- Schreiber, Le défi américain, Paris, Denoël, 1967.

3 This list has been established on the basis of the value of the shares and reserves, as compiled by I Le Nouvel Économiste, Spécial 5000, November 1976. The asterisk after the name of the group indicates that it is State owned or controlled.

4 J. Fontaine, “Ce que vaut la marque ‘France’”, L'Expansion, December 1976.

5 Ibid.; see also C. Stoffaës, “La restructuration industrielle, 1945-1990”, in M. Lévy-Leboyer and J.-C. Casanova (eds.), Entre l'État et le marché: l’économie française des années 1880 à nos jours Paris, NRF/Gallimard, 1991, p. 445-472.

6 See P. Fridenson, “Atouts et limites de la modernisation par en haut: les entreprises publiques face à leurs critiques (1944-1986)”, in P. Fridenson et A. Straus (eds.), Le capitalisme français XIXe-XXe siècle: blocages et dynamismes d'une croissance, Paris, Fayard, 1987, p. 175-194.

7 F.-F. Marsal, “Mort et résurrection des nationalisations”, L’Expansion, February 1973.

8 Entreprise, 21 December 1973.

9 Entreprise, 22 December 1972 and 9 March 1973; M. Kipping, “Inter-Firm Relations and Industrial Policy: The French and German Steel Producers and Users in the Twentieth Century”, Business History, 38 (1), 1996, p. 1-25.

10 On the history of the Plan Calcul, see P. Mounier-kuhn, “Le Plan Calcul, Bull et l’industrie des composants: les contradictions d’une stratégie”, Revue Historique, 591,1994, p. 123-153.

11 M. Herblay, “Rhône-Poulenc change de tête”, L'Expansion, July-August 1973.

12 A. Babeau, “La consommation de masse”, in Lévy-leboyer and Casanova 1991: 425ff.

13 Entreprise, 12 April 1974. During the 1960s, the average sales growth of GDF was 17 per cent (see A. Beltran and J.-P. Williot, Le noir et le bleu. 40 ans d'histoire de Gaz de France, Paris, Belfond, 1992, p.246).

14 Entreprise, 13 July 1973.

15 -Entreprise, 16 February 1973.

16 Entreprise, 13 September 1974. On these stores, see J.-M. Villermet, “Histoire des ‘grandes surfaces’: méthodes américaines, entrepreneurs européens”, Entreprises et histoire, 4, 1993, p. 41-53.

17 Kipping 1996: 12ff.

18 M. Lévy-leboyer, “The Large Corporation in Modem France”, in A.D. Chandler and H. Daems (eds.), Managerial Hierarchies. Comparative Perspectives on the Rise of the Modern Industrial Enterprise, Cambridge (Mass.), Harvard UP, 1980, p. 129.

19 Entreprise, 22 December 1972, 20 December 1974 and 3 January 1975; L'Expansion, January 1975. See also P. Mioche, “Le financement public de la sidérurgie: réalité ou illusion d’un contrôle par l’État (1945-1965)”, in Fridenson and Straus 1987: 83-96; Kipping 1996; M. Klpping, “Les tôles avant les casseroles: la compétitivité de l’industrie française et les origines de la construction européenne”, Entreprises et histoire, 5, 1994, p.73-93; P. Godelier, De la stratégie locale à la stratégie globale: la formation d’une identité de groupe chez Usinor (1948-1986), doctoral dissertation, Paris, EHESS, 1995.

20 L'Expansion, March 1974.

21 Entreprise, 20 December 1974; Le Nouvel Économiste, 5000 entreprises, 1975, p. 191.

22 L'Expansion, July-August 1973 and March 1974; Entreprise, 21 December 1973, 4 July 1974, and 11 October 1974; Le Nouvel Économiste, 28 June 1976. See also D. Barjot, “Les industries d’équipement et de la construction”, in M. Lévy-leboyer (ed.), Histoire de la France industrielle, Paris, Larousse, 1996, p. 412-433; F. Hachez-leroy, L'aluminium français: l'invention d'un marché, 1911-1983, Paris, CNRS éd., 1999; M. Laferrere, “Heurs et malheurs de la décentralisation au sein d’un groupe industriel français: la C.G.E.”, in J. Bastie (éd), Régions, villes et aménagement: mélanges jubilaires offerts à Jacqueline Beaujeu-Garnier, Paris, Centre de recherches et d’études sur Paris et l’Ile-de-France/Société de géographie, 1987, p. 199-225.

23 Le Nouvel Économiste, 28 June 1976; G. Hirigoyen, “Brève histoire de l'O.P.A. de B.S.N. sur Saint-Gobain (Décembre 1968-Janvier 1969)”, in De Jacques Coeur à Renault, Presses de l’Université des sciences sociales de Toulouse, 1995, p. 369-391.

24 Les dossiers d'Entreprise, November 1974; Archives du Crédit Lyonnais, Paris [hereafter ACL]; Entreprise, 1 November 1974; [Anon.], Elf Aquitaine des origines à 1989, Paris, Fayard, 1998.

25 Entreprise, 8 December 1972 and 7 February 1975. J.-L. Loubet, Histoire de l'automobile française, Paris, Seuil (Coll. UH), 2001a, p.384-385.

26 Loubet 2001a: 391. J.-L. Loubet, “Peugeot: histoire complexe d’une croissance externe (1974-1978)”, Histoire, Économie, Société, 20 (3), 2001b, p. 405-415.

27 In 1972, Michelin sold 35 per cent of the radial tires sales in the USA (Entreprise, 27 April 1973).

28 Le Nouvel économiste, 26 November 1976. A similar dynamism can be found in the luxury business in the 1970s; see Marc de Ferrière, “L’industrie du luxe en France depuis 1945. Un exemple d’industrie compétitive?”, Entreprises et histoire, 3, 1993, p.85-96.

29 Annual reports of the concerned companies, ACL.

30 M. Lévy-Leboyer, “Le patronat français, 1912-1975”, in M. Lévy-Leboyer (ed.), Le patronat de la seconde industrialisation, Paris, Editions ouvrières, 1979, p. 152.

31 L'Expansion, June 1974; Entreprise, 11 January 1974.

32 Lévy-leboyer 1980: 138ff.

33 These figures do not take into account the numerous minority participations most of them had.

34 Entreprise, 21 December 1973 and 19 January 1973.

35 PUK had a ‘North American division’.

36 Fridenson 1987.

37 EDF, Rapport d’activité, compte de gestion exercice 1975; M. Herblay, “EDF aux prises avec le nucléaire”, L’Expansion, May 1975; H. Morsel (ed.), Histoire de l’électricité en France, vol. 3, 1946-1987, Paris, Fayard, 1996, p. 35-96.

38 Sacilor and Peugeot-Citroën, annual reports for 1975, ACL.

39 Annual report for 1975, ACL; Entreprise, 21 December 1973; Laferrère 1987.

40 [Anon.], “Y a-t-il un cas Ambroise Roux?”, L'Expansion, May 1976.

41 Annual report for 1976, ACL; L'Expansion, January 1976; Nouvel économiste, 3 May 1976.

42 F. François-Marsal, “Mort ou résurrection des nationalisations”, L'Expansion, February 1973 (author’s translation).

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