This article evaluates the process of firm-specific learning relating to the development of actuarially based pension accounting at the Bell System in the USA from 1913 to 1940. Drawing on Alfred D. Chandler's notion of an “integrated learning base”, it analyzes the steps taken by the firm in learning how to order the multiple forms of specialized knowledge necessary for effective pension liability management. The study also explains how this change moderated relationships between such stakeholder groups as employees, investors, regulators, professional advisors and tax authorities. The pension plan was a key economic benefit that sought to increase employee retention and morale through the promise of retirement compensation for diligent, long-term service. It also sought to address humanely the economic problems of old age in a rising urban-industrial society, which had scant resources dedicated to social welfare. Although originally a pay-as-you-go system, the escalating costs associated with a rapidly expanding workforce forced its abandonment in favor of an actuarially based system in 1927. The article analyzes this evolution in management practice through the New Deal era and the emergence of a national social security system in 1935.
The development of actuarial-based pension accounting at the Bell System, 1913—40
Abstract
This article evaluates the process of firm-specific learning relating to the development of actuarially based pension accounting at the Bell System in the USA from 1913 to 1940. Drawing on Alfred D. Chandler's notion of an “integrated learning base”, it analyzes the steps taken by the firm in learning how to order the multiple forms of specialized knowledge necessary for effective pension liability management. The study also explains how this change moderated relationships between such stakeholder groups as employees, investors, regulators, professional advisors and tax authorities. The pension plan was a key economic benefit that sought to increase employee retention and morale through the promise of retirement compensation for diligent, long-term service. It also sought to address humanely the economic problems of old age in a rising urban-industrial society, which had scant resources dedicated to social welfare. Although originally a pay-as-you-go system, the escalating costs associated with a rapidly expanding workforce forced its abandonment in favor of an actuarially based system in 1927. The article analyzes this evolution in management practice through the New Deal era and the emergence of a national social security system in 1935.Preview Only. This article cannot be rented because we do not currently have permission from the publisher.
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The development of actuarial-based pension accounting at the Bell System, 1913—40
Chandar,Nandini; Miranti,Paul J.
Follow Accounting History
, Volume 12 (2): 205
SAGE – May 1, 2007
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