Toy Wars: The Epic Struggle Between G.I. Joe, Barbie, and the Companies That Make Them.

• Author: Surowiecki, James

by G. Wayne Miller Times Books, $25

In Billy Wilder's 1954 film, "Sabrina," Humphrey Bogart plays the crusty old mogul who tells a radiant young Audrey Hepburn that he's not in business to make money, but to make products that do some good in the world. The success of a corporation, he says, should be measured not just by its profits, but by the quality and value of the things it actually makes.

Bogart's approach was, of course, successful in charming Audrey Hepburn. But it's been the opposite approach -- the one that says getting a hefty return on your investment is what really matters -- that ended up seducing American business. The result has been what you might call the financialization of the corporation. As Roberto Goizueta, former CEO of Coca-Cola, was fond of pointing out, good business essentially consists of borrowing money at one rate of interest and investing it at a higher rate of interest. And what you invest the money in matters much less, ultimately, than that rate of return.

This picture is exaggerated, of course. Even Bogart's company could only stay in business if it made a profit, and presumably investments are profitable in part because they provide a good or service that someone wants. (Coke, after all, is still the real. thing even if it made Goizueta a billionaire) But there has been a sea change in American business since the 1950s, one that has forced corporate managers to concentrate harder on the bottom line, to evaluate products ruthlessly in terms of their potential profitability, and to place the goal of ever-larger earnings over all others. Not coincidentally, this sea change has made American corporations more efficient, more profitable, and perhaps more productive. But it's also made them much tougher places to do business the Bogart way.

In an oblique way, it's the story of this transformation that G. Wayne Miller is trying to tell in his new book Toy Wars. Focusing on one corporation, Hasbro -- makers of G.I. Joe and Mr. Potato Head -- Miller shows how the pressures of being a publicly traded company forced Hasbro to replace its traditional product-driven mentality with a profit-driven one. Instead of worrying about whether a new toy was the best toy that could be made, were meant to understand, Hasbro's executives now had to worry about whether that toy was going to provide an appropriate return on investment. More than that, the executives also had to worry about whether that toy was going to boost the...