Organizational change, budgetary control and success and failure in Formula 1: Rubery Owen and British Racing Motors, 1947–1977

ABSTRACT This study examines the life cycle of British Racing Motors Ltd. (BRM), from its early failures, through to the successes of the 1962–1965 period and its subsequent demise, in the light of managerial and organizational change at its parent company, the private family-owned business, Rubery Owen. Using the reports of British consultancy firms, supported by secondary sources, the study examines how factors such as the professionalization of Formula 1, macroeconomic conditions, and changes to tax legislation impinged on the financial position of Rubery Owen and thus on BRM. Financial crises are found to have generated a move from proprietorial capitalism to a more managerialist approach within Rubery Owen, exemplified by the adoption of budgetary control. This, at the end of 1961, resulted in an ultimatum from Rubery Owen’s chairman, Sir Alfred Owen, that BRM should win two grand prix races in 1962 or be wound up. While BRM did more than this, winning both the constructors and drivers’ world championships in 1962, similar sustained success failed to materialize following the issue of a similar ultimatum in early 1969. Financial difficulties in the early 1970s led to further structural change within Rubery Owen, leading to BRM’s demise in 1977.