Contrived Competition: Regulation and Deregulation in America
This is the story of a revolution in American industry: the massive deregulation of markets by the government starting in the late 1970s. After an era of New Deal controls that lasted forty years, and in response to a stagnating economy, a new intellectual and political consensus developed in support of competitive markets. Beginning in 1978, Congress enacted a raft of deregulatory reforms, which federal agencies implemented during the early 1980s. Suddenly, the structure of markets in these sectors changed dramatically: new entrants flooded in, product and service markets were redefined, and prices fell. To survive, incumbent firms were forced to adopt entirely new strategies. Business historian Richard Vietor explains how each of four major firms was challenged by deregulation, and how its leadership struggled to adjust to new forms of intense competition. At American Airlines, we see Robert Crandall grounding aircraft, reorganizing routes, and expanding its reservation system into a competitive weapon. When El Paso Natural Gas was threatened with excess capacity and overpriced contracts, Travis Petty struggled with a strange new regulatory regime of unbundled products and services, eventually restoring his company to profitability. At AT&T, Charles Brown and then Robert Allen coped with MCI and divestiture, building a new integrated company to manage information worldwide. And Bank-America, caught short with bad loans and a deep recession in the early eighties, nearly failed before Sam Armacost and then Tom Clausen achieved an amazing turnaround in the mid-1980s. These four parallel stories illustrate a dynamic process of market restructuring and organizational adjustment. We seemanagers and regulators alike painfully learning to operate effectively as their business and political environments shift around them. The ability of top management to escape operational preconceptions, to change corporate mindsets, to redefine existing competencies, and to exercise leadership determined which firms would survive in the new world of deregulated competition.
What people are saying - Write a review
We haven't found any reviews in the usual places.
The Experiment with Economic Regulation
El Paso Natural Gas
Regulation in Perspective
aircraft American Airlines antitrust Armacost assets AT&T Aviation Bank of America bank's BankAmerica Bell System bill branch banking branching California carriers chairman Civil Aeronautics Board commercial banks commission's Committee Cong Congress consumer contracts Corp Corporation costs Crandall cubic feet customer-premises equipment customers demand Deposit Insurance deregulation developed disintermediation divestiture Docket El Paso Electric entry equipment eventually Federal Communications Commission Federal Energy Regulatory Federal Power Commission Federal Reserve FERC Figure financial services firms gas industry growth Harvard Business School Ibid increased Institutions interest rates Investment Banking issue legislation loans local-exchange long-distance market structure ment merger million monopoly Natural Gas operating Paso Natural Gas Paso's percent political president problems regulatory reform Reserve System revenues Robert Crandall route sector securities segment Senate sess strategy switching take-or-pay telecommunications telephone Texas tion transmission transportation United Washington York