BOOKS:Giants learn to dance

COMPANY MAN: The Rise and Fall of Corporate Life by Anthony Sampson, HarperCollins pounds

J K GALBRAITH once noted that when he lectured on the evils of multinational capitalism, the most enthusiastic audiences were composed of multinational capitalists, flattered by his condemnation. However much they take on their own identities, companies are still made up of individual people, whose interests may not always chime with their employer's ambitions.

The company arose because ventures became too risky, and required too much capital, to be financed by any one person. The first company proper, in Anthony Sampson's view, was the East India Company, which survived for 259 years, and gave employment to such various talents as John Stuart Mill, Charles Lamb and Thomas Love Peacock - who penned satirical verses lamenting the tedium of the six-hour days he was obliged to spend at work. (Peacock, perhaps disappointingly, was in reality diligent and innovative, a model company man.) It also ran India, an ambition probably beyond the reach of the most imperial present-day multinational.

In modern times, Sampson charts the rise of ICI, Unilever and Shell in Europe, IBM, Ford and General Motors in the United States, and Toyota in Japan. These were enterprises with the wealth of small countries, and pretensions to match. As secular empires waned, business empires grew. They too built grand corporate palaces and complex hierarchies of rank and status; in their heyday they spoke to governments as equals and meddled in politics with careless amorality. And they, too, often crashed spectacularly.

Yet no sooner had they arisen than the management consultants, the "new priesthood" as Sampson calls them, came to dismember them again. ICI hived off its pharmaceutical arm as Zeneca; Shell divisionalised and empowered to an extent where, as we have seen recently, decisions can be made by one part of the business with little regard for wider consequences; other giants learned to dance to survive, spurred on by the eschatologies of the consultants or the threat of corporate raiders.

Those who failed to adapt paid the price. Sampson makes a salutary visit to Endicott, in New York State, where IBM reneged on its unwritten promise of lifetime employment and laid off a seventh of its workforce, with the promise of more to come. The workers had been loyal, comments Sampson, like lemmings.

Even if they adapted in time, the large companies saw layers of management stripped out in the quest for the consultants' Holy Grail, a flatter management structure. The effect, thinks Sampson, has been to concentrate power at the top of organisations. Previously, wedges of middle management were needed to filter and summarise information travelling up from the shop floor to the boardroom. Now information technology has made it easy for chief executives to monitor the minutest activities.

This does not mean that their grasp of reality is sound. The most obvious example is the debate over top pay. "Tribesmen like their chieftain to be beautifully attired," a headhunter tells Sampson, baroquely. "Privates in the army like a general to appear grand. Factory workers in the Midlands like to see the chairman in a Roller."

But privates who think the general a cheery old card when things go well are rarely as keen on grandeur if his plan of attack leaves the infantry decimated. In the new corporate world, the workforce pays the price of failure, seldom the top management. Sampson meets the smiling Ross Johnson, whose rococo buy-out of RJR Nabisco went so badly wrong that he was left with no alternative but to eject from the company with a $53 million golden parachute. "I love the notoriety," says Johnson. "Everybody knows me now. I still sign autographs." You can buy a lot of biros for that kind of money.

There are other models. Anthony Sampson's emphasis on Japan ignores the rise of South Korea, two of whose chaebols, Daewoo and Samsung, now raising their profile in Britain, give the lie to any idea that the monster company is dead. And, perhaps through overfamiliarity, he ignores South Africa, where a handful of giant conglomerates constitute the bulk of the formal economy. Most particularly, he skimps on the European ideal of worker participation and industrial democracy, a system which the Labour Party eyes with a keen interest.

As an undergraduate, Anthony Sampson walked in Regent's Park with the sociologist Barbara Wootton. As they looked through the windows of nearby offices, Wootton asked disdainfully, "What are they all doing in there? No one will ever know." It is a question Sampson does not answer either. This is not a history of company man, except at a superficial level: what it does provide is a scenic tour of the rise and fall of the large company, a very different prospect.

Giant companies have their own seductive glamour, no less than politicians or princes. Perhaps Sampson has spent too long with chief executives: his acknowledgement list reads like a printout of the Inland Revenue's favourite customers, and some of them have penetrating comments to make. But a more balanced anatomy of company man might have come from less acquaintance with tycoons and more with the Microserfs and Rivetheads who do their dirty work.