There are a number of factors which contributed to the evolution of various branches of Business Studies. The following are significant/outstanding factors.
i) The period of Renaissance in European history: This took place between
1400AD to 1800AD. This period was characterized by knowledge explosion
due to the revival or rebirth of knowledge. A renowned historian, Hayes (1987)
pointed out this was the period of “intellectual quickening”. Renaissance
period began in Europe in earnest during the first half of the 15th century
(1400AD to 1450 AD). This was the period when the people of Europe broke
away from the traditions, and more so, the religious bondage of the middle
Ages. People in Europe began questioning rationally the social, economic,
political and natural events of the time to establish the truth based on new
scientific discoveries, inventions and innovations. There was a lot of interest
in philosophy during the Enlightenment Era (the Age of Reason).
‘Enlightenment’ has been coined from the word ‘to enlighten’ which means to
shed more light on something so as to make it clearer than before. The Era of
Enlightenment began in Europe from the beginning of the first half the 18th century (1750s) and continued up to the closing years of the 19th century (1880s and 1890s). This Era was greatly influenced by the unprecedented scientific discoveries, inventions and innovations of the 16th and 17th
centuries by the leading scientists of the time (such as Sir Isaac Newton, Galileo and Copernicus). The scientific discoveries, inventions and innovations of the 16th and 17th
centuries changed the way the Europeans as well as the rest of the westerners perceive life. These brought about new ideas, new ways of doing things in all economic, social and political
orientations of the European people. The people of Europe became more
inquisitive. They wanted to know what was happening and why things were
happening. These brought about the explosion of knowledge. There was
expansion of knowledge of the traditional disciplines of study as well as new
forms of knowledge, skills and attitudes. These new forms of knowledge,
skills and attitudes resulted in the evolution of new disciplines of study such
as Principles of Accounts (1494), Economics (1776), Sociology (1838), Anthropology (1854), and Psychology (1878). Luca Pacioli, the renowned Italian of the early Renaissance period, established and formalized new ways of presenting Accounting information, thus considered the founder of modern
Accounting as a profession. Adam Smith also founded the discipline of
Political Economy.
ii) Mercantilism:. This took place in Europe between the 16th and the 18th
centuries. This was a political thought and a movement which arose out of
the voyages of the leading ocean explorers (e.g. Christopher Columbus and
Vasco Da Gama). The leading European explorers, who were in search of a
sea route to India and Far East, discovered the new worlds and opened up
new economic opportunities for Europe. There was interest on economic
resource exploitation of the new worlds through international trade. This was
based on the realization that those nations in Europe (such as Portugal, Spain
and Netherlands) who had taken the lead in international trade were wealthier
than other European nations. The mercantilist argument was that those
nations who engage in international trade benefit economically through
greater inflow of money and the most precious metals such as gold and silver.
According to the mercantilists’ view, there was need to use state military
power to control ocean trade, protect local companies in international trade,
protect local markets, control strategic geographical regions and control
strategic economic resources. A number of new economic concepts that
arose from increased international trade are trade tariffs, balance of trade,
balance of payments and term of trade, the theory of comparative advantage,
international trade terms of sale, free trade, foreign exchange rates, money
supply, market competition, demand and supply. These and a number of other
concepts buttressed the subject matter of Business Studies disciplines and
more so in Economics.
iii) The Industrial Revolution:
This industrial revolution took place in Europe during the Enlightenment Era.
The industrial revolution was characterized by the application of the
discovered, invented and innovated scientific knowledge to the industrial
production of goods and services. Before the industrial revolution, the
production of goods was mainly labour- intensive and mainly aided by hand
tools and simple machines. The main force behind the industrial revolution
was the steam engine which was used to move locomotives, ships and power
machines in industries. Therefore, there was mass production as well as the
fast distribution of goods and services. This revolutionized commercial trade
throughout Europe and the Western world. Scholars began to examine,
among others, the demand and the supply factors, economic efficiency and
the monetary exchange problems. It was because of the economic climate at
the eve of industrial revolution that Adam Smith wrote the first textbook on
Economics- ‘The Wealth of Nations’ in 1776.
iv) The rise of Nationalism and Nation building in Europe:
Before 18th century, there were no nation states, as we know them today, in
Europe. The development of modern nation states in Europe began in earnest
with the signing of Peace of Westphalia in 1648. The Peace of Westphalia led to
the adoption of the concept of sovereignty of a nation state in the management
of its own internal affairs. The overwhelming desire of nationalism and of state
formation in Europe was greatly influenced by the changing socio-economic and
political activities of the Enlightenment Era. During this time, ethnic
communities of common origin, practicing common traditions and of the same
linguistic groups agitated for their own national identity across Europe and
hence the desire to form their own nation states. The French revolution which
took place in 1789 set the stage for political revolutions and wars of
independence by numerous European ethnic communities across Europe (for
example, the Greek war of independence from the Ottoman Empire took place
from 1821 to 1829, the Belgian political revolution of 1830, the German
Unification by Otto Von Bismarck from 1866 to 1871 and the Italian Unification
in 1859). There was unsuccessful attempt by the Jewish population in Diaspora
to form their own nation state in Central Europe. The United Kingdom of Great
Britain, which brought together the English, the Welsh, the Irish and the Scottish
ethnic groups into one nation, was formed by an Act of Union after the British
Parliament seized political power from the monarchy in 1688. The international
borders were drawn and redrawn to create European nation states. National
constitutions of various European nations were promulgated at different times
of state formations. These processes of state formations in Europe took place
throughout the 18th, 19th and 20th centuries. After the Second World War in 1945,
the world umbrella of United Nations was formed.
The state formations in Europe expanded the subject matter of Business
Studies tremendously by bringing about new content areas such as Public
Finance, Development Planning, Political Economics, Money and Banking, and
International Economics. These new content areas evolved in order to address
the economic interest of the each nation state and of all nations of the world.
v) The discovery and colonization of the new lands.
This is another factor which contributed to the evolution of some aspects of the
subject matter of Business studies. At the close of the fifteen century, the
leading European countries (such as Portugal, Spain and Netherlands) financed
sea exploration in search of sea trade routes to the East Asia (notably India and
China). The Ottoman (Turkish) Empire in the second half of the fifteenth century
had taken over the strategic town of Constantinople and blocked overland trade
routes between Western Europe and the Far East (India and China). In the course
of finding the sea routes to India and China, the European explorers discovered
new continents (North and South America, Australia and New Zealand).
Christopher Columbus, one of the leading European explorers of the fifteen and
early sixteen centuries, discovered Central and North America.
There were fertile and virgin lands in these new continents and a large number of
European populations emigrated and settled on these new lands. They
pioneered in owning large tracts of lands and engaged in large scale crop and
livestock farming. Crops, such as sugar cane, cotton, maize and wheat were
grown on large scale. Livestock, such as beef and dairy cattle, sheep and poultry,
were reared on large scale. No sooner than later, these large scale farmers
started processing products such as sugar, milk, mutton and beef and exported
them to European markets such as London, Lisbon, Paris and Amsterdam. The
prices of these processed products were far much cheaper than the similar
products produced in Europe. Scholars therefore came up with theoretical
concepts and principles to explain the causes of price variations between
European domestically produced products and those from the new continents. It
was realized that farming on large scale brings certain advantages (benefits).
Economies and diseconomies of large scale production were therefore coined
for the first time to explain price variations. Other economic concepts such as
the laws of diminishing returns, optimum output, returns to scale were espoused
by scholars. The new knowledge pertaining to economics expanded the subject
matter of economics.
There was also increased international trade between colonies and European
markets bringing about a wide range of International Trade concepts such as
balance of trade, terms of trade, balance of payment and terms of scale in
international trade.
vi) The emergence of towns and cities as commercial centers of trade.
This factor also facilitated the evolution as well as the expansion of
Commerce (the study of trade and aids to trade). Such concepts as
classification of trade came up terms of payment in home trade, means of
payment in home trade and business trade documents (e.g. a receipt,
consignment note, acknowledgement note etc) were espoused by scholars.
There was also the evolution of urban economics, urban planning, as well as
the management of towns and cities (such bodies as city councils, municipal
councils and town councils evolved to manage urban centers)
raphael answered the question on August 10, 2021 at 05:42