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Rethinking Business Models in the Great Depression: The Failure of America's Vacuum Cleaner Industry

Published online by Cambridge University Press:  01 July 2019

Peter Scott
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Abstract

We examine the factors leading to the onset of organizational rigidities in the dominant vacuum cleaner firms of the 1920s, Hoover and Eureka. Strategies aimed at strengthening organizational commitment, in conjunction with low levels of organizational diversity—owing to managerial hierarchies dominated by men recruited from the sales force—restricted organizational flexibility and adaptability while accentuating resistance to change. In conjunction with core competencies that largely reflected conditions in the previous rapid-growth phases of both firms, organization rigidity left them vulnerable to the new conditions of the Depression, including product and value chain innovation by a new entrant, Electrolux.

Keywords

organizational rigiditiescompetency trapsdisruptive technological changewhite goodsvacuum cleaners
Type
Research Article
Information
Business History Review , Volume 93 , Issue 2 , Summer 2019 , pp. 319 - 348
Copyright
Copyright © The President and Fellows of Harvard College 2019 

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Footnotes

I thank the Centre for Business History, Stockholm; Hagley Museum and Archives, Wilmington, DE; Hoover Historical Center, Walsh University, North Canton, OH; McLean County Museum of History, Bloomington, IL; miSci Museum, Schenectady, NY; Wright State University Special Collections and Archives, Dayton, OH; and Tom Gasko, for access to sources. Thanks are also due to Leslie Hannah, Karina Pavlisa, Megan Pellegrino, James Walker, participants of the IBS seminar series at the University of Reading's Henley Business School, and three anonymous referees, for comments on earlier drafts. Any errors are mine.

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