The Case for Applied History in the World of Business: A Call for Action to Historians

By Cortada, James W. | The Historian, Summer 2000 | Go to article overview

The Case for Applied History in the World of Business: A Call for Action to Historians


Cortada, James W., The Historian


Historians should become more active in helping business managers apply the historical methodology and knowledge of the academic. Business managers want that help, and good reasons exist for historians to offer it. The time is also ripe for an expanded role for historians because the demand in business and government for applying historical insights is increasing. Throughout 1996 and 1997, American newspapers carried articles quoting chief executive officers of corporations lamenting the insufficient supply of employees trained in the humanities and social sciences. As far back as 1988, Claude Singer, a vice president at Chemical Bank, published in the New York Times the case for "the historical mode of thought."(1) While I will briefly comment on applied history in the public sector, where senior public officials often rely on the historical insight of professional historians, the greatest opportunity lies in the private sector where, though it represents a larger portion of the economy, history is used least of all. For that reason I want to concentrate this discussion on applied history in a commercial setting.

The ancient Greek historian Thucydides thought that study of the past would provide insight for decision makers in the present, the basic definition of applied history for the past 2000 years. But of course it is more. For our purposes, applied history is the identification and analysis of previous events and patterns of behavior to provide perspective on current problems and issues. The key idea is that historical insight can help business executives, government officials, and others make better informed decisions and take more effective actions. Applying history does not mean attempting to replicate actions of the past; most business executives would agree that history does not repeat itself. As studies on waves of historical phenomena are beginning to suggest, however, historical forces are at work that cannot be totally ignored, and can even be exploited. Economic historians have led the way with detailed studies on price waves, followed by those in political history who have examined recurring phases of war, and social historians who have conducted generational studies within a society to identify long term demographic patterns. Increasingly with wave studies, scholars are beginning to suggest what the future brings and to catalog trigger events one could reasonably expect to sound the alarm bells of change.(2)

Many examples of applied history exist that are relevant to business managers. In a seminal 1986 study, Richard E. Neustadt and Ernest R. May demonstrated how U.S. government officials use historical insight to assess issues, define decision options, and deal with leaders from other cultures. In particular, their case studies demonstrated how historical and cultural knowledge in Cuban and Iranian affairs sensitized senior American officials to what had worked in the past and what was probably on the minds of officials in opposing countries.(3) Foreign offices routinely teach their diplomats history for the same reason and keep experts at the ready to inform senior government officials about the past and potentialities of an international situation. Former Secretary of State Henry Kissinger--a political scientist by training--studied, wrote, and used history in his work as a diplomat. The U.S. Congress calls on the Library of Congress to prepare background reports on the history of an issue. In 1998, the congressional impeachment committee that determined whether President William Clinton should be impeached called as its first witnesses distinguished American historians to comment on precedent.

Thus, insight and background on the one hand and a sense of what might work or not on the other have long been justifications for historical study. In the United States we observe history departments under siege from state legislatures and university administrators cutting budgets at a time when so many nonhistorians and business school professors are commenting in print on history. …

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