Growth of Spanish Companies: Phases, Scientific Management, and Entrepreneurship
Phases of Large Company Creation in Spain
The creation of large companies in Spain can be divided into four phases:
- Phase 1 (1855-1868): Progressive policies led to the emergence of large railway companies, merchant banks financing railway construction, and mining companies.
- Phase 2 (Early 20th Century): Factors contributing to growth included capital repatriation, foreign capital introduction, banking system development, industry mergers, and economies of scale in new sectors.
- Phase 3: Creation of autarquía by the state and national companies of the INI (National Industry Institute).
- Phase 4 (1960-1975): A period of significant economic expansion and industrial development.
Scientific Organization of Work (Taylorism) in Spain
Spanish companies were slow to adopt scientific management principles, initially favoring human relations models. This system, proposed by Taylor, faced several obstacles before the Franco era:
- Backward industrial structure
- Isolation from the international environment
- Opposition from the labor movement
- Shortage of engineers
- Technological dependence on foreign sources
Scientific management gained traction during the autarquía period, spreading to Spanish companies by 1950. It was seen as a means to increase production through the application of scientific methods, supported financially and morally by the state.
In conclusion, state support, public companies, repression, and the growing influence of engineers strengthened the scientific organization of work in Spain.
Causes for the Absence of Entrepreneurs and Large Enterprises
Three main groups of causes explain the historical absence of entrepreneurs and large enterprises in Spain:
Legacy of the Old Regime
This group includes explanations related to the old regime and its cultural legacy, such as aristocratic prejudices against manual labor, the influence of the Inquisition, mercantilist traditions, and Catholic mentality. However, these factors had limited impact on business during the modern development era. Political instability and business discontinuity significantly influenced company behavior and the absence of large businesses, delaying the adoption of industrial revolution technologies. The economic policies of Spanish governments also played a role.
Market Dimensions and Production Factors
Insufficient market size and limited availability of goods and production factors hindered the development of large companies. Domestic demand was weak due to Spain’s poverty, making it difficult for employers to establish large factories. Illiteracy and inadequate education also posed challenges. While education isn’t a prerequisite for entrepreneurship, it is crucial for developing a broad stratum of executives essential for modern industrial enterprise, something lacking in Spain. Furthermore, the supply of raw materials was limited.
Company Institutions and Market Dynamics
The third group relates to company institutions, dominant organizational forms, and market rates. The shortage of entrepreneurs in Spain contributed to the absence of large firms. Instead of discovering new techniques, employers focused on spreading imported technologies, relying on engineers and technicians to demonstrate entrepreneurship.