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Across borders and beyond boundaries: How the Olivetti Company became a multinational

2014; Taylor & Francis; Volume: 56; Issue: 8 Linguagem: Inglês

10.1080/00076791.2013.876534

1743-7938

Adriana Castagnoli,

Firm Innovation and Growth

Abstract'Ing. C. Olivetti & Co.', the office machine producer founded in 1908, is one of the few Italian enterprises that was quick to set up a process of internationalisation both in European markets and in other continents. This article shows the evolution of Olivetti as a multinational business from its origins until the 1960s when the manufacturer was owned and controlled by the Olivetti family. It focuses on the role that 'entrepreneurial cognition' plays in shaping business as the company pursues new business opportunities across borders. It argues that the internationalisation of Olivetti was pursued in at least three ways: (1) as exploitation of entrepreneurial opportunities in response to major historical events, local and global tensions; (2) as the result of entrepreneurial perceived high self-efficacy; and (3) as consequence of heuristic decision-making processes.Keywords:: entrepreneurial cognitionmultinationalcorporate social responsibilityforeign direct investmenttechnologyelectronicsfamily firm AcknowledgementsI would like to thank the 16th Annual Conference EBHA ‐ 1st joint Conference with BHSJ, William J. Hausman and Matthias Kipping for comments on earlier drafts.Notes 1. 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Asisp, Fondo Sofindit, cart. 418, fasc. 6–10, Underwood Italiana, 6 September 1935. Archivio Storico Banca d'Italia (Banca d'Italia Historical Archive hereafter Asbi) Carte Beneduce, n. 327, fasc. 1, sfasc. 3, Underwood Italiana, 18 September 1933. Italian Underwood had passed into the hands of the Italian State through the rescue operation that had been planned for Banca Commerciale Italiana. Indeed the Italian Underwood was a peculiar joint-venture between Underwood and Banca Commerciale Italiana. Yet Camillo Olivetti criticised the Company for pretending to be Italian. 48. Aso, Mdas, vol. 344, Lettera al Consorzio per sovvenzioni sui valori industriali. 49. Aso, Mdas, Relazione che accompagna la domanda di finanziamento della Ditta Ing. Olivetti & C. di Ivrea, 12 October 1932. 50. Aso, Mdas, vol. 344, Lettera alla Direzione dell'Istituto Mobiliare Italiano, 12 October 1932. Aso, Mdas, Lettera al ministero delle Corporazioni, 26 May 1934. 51. Aso, Assemblea generale degli azionisti Olivetti (Annual Olivetti shareholders' meeting, hereafter Agao), 1 March 1934. Aso, Mdas, vol. 344, Lettera alla Direzione dell'Istituto mobiliare italiano, 12 October 1932. 52. Aso, Mdas, vol. 345, Lettera a col. E. Rimailho, presidente della Compagnie des Machines Egli-Bull, 14 April 1933. 53. Aso, Mdas, Lettera a Mario Mondolfo, 27 October 1937. 54.CitationJones, Multinationals from the 1930s to the 1980s, 81- 90. Rodrik, The Globalization Paradox. Kindleberger, La politica commerciale fra le due guerre, in Storia economica Cambridge, vol. VIII, Le economie industriali, tomo I. Besides the League of Nations imposed economic sanctions on Italy because of the Italian invasion of Ethiopia in October 1935. The sanctions remained mainly ineffective, yet they contributed to the autonomy from parent company. 55. Amatori, Colli, Bugamelli, Italian Firms in History. 56. 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L'Olivetti industriale nella competizione globale (1950–90), 58. 70. Asbdi, Fondo Consorzio Sovvenzioni, Sottofondo Sede Principale, Tipologia Pratiche, n. co. 209, F. 19. 71. Ibid. 72. At, Vcdao, 2 December 1949. 73. Aso, Fbff, V-F-9–4, La Olivetti nel mondo, 1971. 74. Berta and Onida, "Old and New Italian Multinational Firms". 75. At, Vcdao, 5 April 1952. 76. Ibid. 77. Adriano had been appointed president and CEO in 1938 and, after leaving Italy during the war, in November 1946. 78. Aso, Fondo presidenza (from now on Fp), Correspondence, 14, 163, American Management Association, 4 June, 1952. Aso, Fp, American Management Association, 5 June, 1952. Two years later: Aso, Fondo AO, 22,310, Corrispondenza con H.A. Kissinger, 20 July 1954. Aso, Fondo AO, 22.310, 28, Carteggio con C. Boothe Luce, 8 May 1954. Aso, 22.310, Fondo AO, 74, Carteggio con A. W. Dulles, 1954. 79. Aso, Fondo Ao, 22.310, Carteggio with Guido Nadzo, Letter 4 October 1952. Nadzo was Divisional Assistant Housing & Public Works by Msa. 80. US National Archives and Records Administration, The Mutual Security Program. First Report to Congress, December 31, 1951. CitationGemelli, ed., Scuole di management. Origini e primi sviluppi delle business schools in Italia, 39, 40, 48. 81. Aso, Dcus-Rsce, 710, "Abc Business Machine Co. History". Fortune (September 1960). 82. Aso, Olivetti 1908–1958. Aso, Dcus, Rsce, 710, "Abc Business Machine Co. History". Elettrosumma e la Divisumma 14 were calculators designed by Natale Capellaro. 83. After the brilliant success of the Divisumma, in 1953–1954 Olivetti began to introduce calculators and typewriters (Lexikon 80 and Lettera 22) into the American market. Aso, Fb, Ufficio segretario generale, Agao, 27 July 1954. 84. Romero, Storia della guerra fredda, 94–97. 85. 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On American ITT's strategy in Italy, see CitationCastagnoli, Le strategie industriali: elettricità e telecomunicazion, 313–323. 91.CitationReardon, America and the Multinational Corporation. The History of a Troubled Partnership, 43–45. 92. In Europe, Germany, UK, Italy, Switzerland and France were the biggest manufacturers as Sweden and Spain produced less than 50.000 units a year. Aso, Giovanni Enriques, Les machines à écrire en Europe, Congrès International des Industries et du Commerce de l'Equipment de Bureau, Paris, October 1952. Enriques was in charge of the Italian Association of Office Equipment Makers, headquarters in Milan, Piazza degli Affari 3. 93. From 1938 to 1961 Italy's quota of world trade rose from 2.43% in 1948 to 4.03% in 1961 and to 5.21% in 1963 (in 1933 it had been 3.38%). 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Adriano embraced Emmanuel Mounier's ideas of Community and Jacques Maritain's ethics in economics. Camillo, a Jew, adhered to Unitarian Church as Luisa, Adriano's mother, was Waldensian. Sapelli, Adriano Olivetti: la tentazione di un tradimento, 9–36.102. Aso, Olivetti 1908–1958, cit., p.16. CitationBerta,Le idee al potere. Adriano Olivetti tra la fabbrica e la Comunità.103. http://www.zeiss.it/4,125,680,700,354e32/Contents-Frame/07fc86fb5dab1255c1256a5,400,3622f5 Founded in 1889, the Zeiss Foundation is the owner of Carl Zeiss, located in Oberkochen, and Schott AG, located in Mainz (Germany). These firms employ 34,000 employees all around the world and create a net turnover of 4200 million Euros. The Zeiss Foundation is a peculiar model of enterprise: it is an independent institution, it does not own private or public properties, it does not own foreign assets. It is responsible for the corporate governance of its companies and upholds their corporate social responsibility.104. 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At that time the Olivetti corporation did not yet own the majority share, nevertheless its control was effective.118. At that time the gold reserves of Italy had risen considerably: the most significant growth in the world behind that of the UK.119. "Il Globo", 10 October 1959.120. "Italia Domani", 1 November 1959.121. Aso,Frsce, 710, Appunti su relazione ing. Adriano Olivetti. At, Vcdao, 23 September 1959. Agao, 25 February 1960. Cf. Barbiellini, Amidei and Spadoni, European acquisition, 17122. Aso, Dcus, Rsce, 724, Harvard Business School, Olivetti Underwood Corporation. 1964 Supplement. According to Barbiellini Amidei & Goldstein, Corporate Europe, 275, "previous studies provided a partial evaluation of Underwood acquisition".123. Pirelli, La Pirelli.124. On market seeking, leading industrial sectors, oligopoly and advanced markets, CitationDunning, and Lundan,Multinational Enterprises and the Global Economy, 71.125. My interview with Gianluigi Gabetti, September 2008. Cf. also CitationBricco,Olivetti prima e dopo Adriano. Industria cultura, estetica.126. Castagnoli, Essere impresa nel mondo, 75.127.Fortune (September, 1960).128. Both Gabetti's interview and Galassi's statement include this evaluation.129. Aso, Dcus, Rsce, 724, US News & World Report, 23 July 1962.130. According to Gianluigi Gabetti, Olivetti derived considerable benefits from the merger. After Adriano's death, Giuseppe Pero was appointed president. Cf. also Barbiellini and Goldstein, Corporate Europe, 267.131. Castagnoli, Essere impresa nel mondo, 219–224.132. Aso, Dcus-Rsgoc, "El Universal", Città del Messico, 7 March, 1976133. Aso, Dcus-Rsgo. "Industry & Trade", Cape Town, April, 1962.134. In 1977 the plant in Glasgow was sold to SCM of New York.135. Aso, Fb, Usg, Agaos, 1964.136. Aso, Agao, 1964.137. At the Board of directors' meeting on 20 January, 1964 Galassi expressed the managers' wish for a swift appointment of the new president after Pero's death. Ast, Vcado, 17 May 1963. About investors and the Olivetti group in Italy, see Bricco, Olivetti prima e dopo Adriano, 36–54.138. "Business Week" (September 12, 1964). Gianluigi Gabetti in 1963 was vice-president of OCA. Gianluigi Gabetti, 107.139. At, Vcdao, 15 e 17 May 1964.140. Cf. Barbiellini Amidei & Goldstein, Corporate Europa.141. Aso, Fb, Usg, Agao, 25 February 1960142. At, Vcao, 15 e 27 May 1964.143.CitationWilkins, "US Business in Europe: An American Perspective", 35–70.144.CitationAkera, "Ibm's early adaptation to Cold War markets: Cuthbert Hurd and his applied science field men", Business History Review,76 (Winter 2002), 767–802. CitationChandler, Jr., Inventing the Electronic Century.145. At, Vcda, 4 September 1958. Castagnoli, Essere impresa nel mondo,208–211; Gemelli, and Squazzoni, "Informatica ed elettronica."146. Chandler Jr., Inventing the Electronic Century147. Cf. Soria, Informatica: un'occasione perduta: la Divisione elettronica dell'Olivetti nei primi anni del centrosinistra (Torino: Einaudi, 1979).148. Schenectady Museum, General Electric company, Board of Directors Minutes, vol. 50, Board of directors, 24 July, 1964.149. Ast, Vcdao, 15 July 1964. The second semester forecast for Italy was a reduction in income of 2.5–3% compared to the previous year. An analogous increase was forecasted on foreign markets. Provisions capable of boosting the group's development were announced to give a better structure to the company. The abandoning of mainframe computers was the first of these provisions, followed by the reorganisation of the operative structure and responsibilities, a medium-term growth programme, the psychological re-launch of the company for the employees and the investors.150. Dino declared his opinion on a revision of the terms of the agreement with GE. He stated, "If Olivetti sells the electronic division it will be giving away its essential purpose". Peccei answered that, also without the engagement of the control group, the problem would arise in any case as it was not possible to go on alone in that sector. In his opinion, the agreement with a large company was better than a series of agreements with medium-sized firms.151. Colli, "Investing in a Developing Economy: US and European Direct Investments in Italy (1915–1970)", 130.152. Cf. Piol, Il sogno di un'impresa. Dall'Olivetti al venture capital, 47–48.153. Swope, Jr., Historical Review of GE's Foreign Business as Affected by the US Antitrust Laws, October 31, 1972.Additional informationNotes on contributorsAdriana CastagnoliAdriana Castagnoli is Senior Adjunct Professor of Economic and Social History at the University of Turin and has received the National Scientific Qualification as Associate Professor of Contemporary History. She is a regular contributor to economic newspapers and journals (in particular to "Il Sole 24 Ore"). Her research interests include industrial strategic sectors and utilities, and state control; globalisation and transatlantic economic relations; business elites. She has also conducted and directed projects on EU regional policy.