Creating the “American Way” of Business: Evidence from WWII in the U.S.

The Second World War II (WWII) was arguably one of the largest shocks to the U.S. economic and production system in history. Historians, business historians, and economists have largely discussed the stimulus that WWII had on U.S. technological advancements. However, its effect on U.S. ‘‘managerial technology’’ innovations has been largely ignored, except for very few qualitative works. In this paper, I argue that ‘‘managerial technology’’ played a key role in shaping U.S. WWII production and its capacity to defeat some of the most advanced economies in the world. The large-scale diffusion of innovative management practices to US firms involved in war production acted as a technology that put them on a higher growth path for decades. Moreover, it made U.S. managerial practices internationally distinctive and helped create the so-called “American Way” of business, which was exported to war-torn European and Japanese economies in the war aftermath.