The Effective Executive

by Peter F. Drucker

Vail’s third decision led to the establishment of one of the most successful scientific laboratories in industry, the Bell Laboratories. Again, Vail started out with the need to make a private monopoly viable. Only this time he asked: “How can one make such a monopoly truly competitive?” Obviously it was not subject to the normal competition from another supplier who offers the purchaser the same product or one supplying the same want. And yet without competition such a monopoly would rapidly become rigid and incapable of growth and change. But even in a monopoly, Vail concluded, one can organize the future to compete with the present. In a technical industry such as telecommunications, the future lies in better and different technologies. The Bell Laboratories which grew out of this insight were by no means the first industrial laboratory, not even in the United States. But it was the first industrial research institution that was deliberately designed