By tradition, the fortunes of entire studios rise or fall on the public's reaction to a single movie. It has been that way since the industry was created by the likes of Darryl Zannek, Jack Warners and the intocratic founder of Columbia Pictures, Harry Cohn.

Aloof and irascible, Cohn started Columbia in 1920 with $250 of seed money. His abrasive ways often sparked fights with his stars, who included Richard Barthelmess, Carole Lombard, Gary Cooper, Rita Hayworth and Kim Novak. Yet when he died in 1958 his stufio office was adorned with 45 Oscars for films such as "On the Waterfront," "From Here to Eternity" and "All the King's Men."

Compared to the buptious Cohn, his successor, Abe Schneider, was a benevolent leader, who came to power through Columbia's accounting department. The boom-bust cycles continued to plague the studios into the mid-1930s when they became takeover targets for cash-hungry conglomerates.

The conglomerates argued that they could offset down-years in the movie industry with their other products. They also were after the studios' valuable film libraries for sale to television. In the mid-1930s, for example, Gulf & Western Corp. bought Paramount and Transamerica Corp. took over United Artists.

In 1936, Columbia was the subject of concurrent takeover attempts by the French investment banking house, Banque de Paris et des PaysBas, and Lee National Corp. a New York-based corporate financier.

But no sooner had the French firm tendered for 34.4 per cent of Columbia's outstanding shares than realized belatedly that it was forbidden by law from controlling the company. The reason: Columbia's subsidiary, Screen Gems, held interests in TV stations, which alien interests are forbidden to own.

To extricate Columbia, Schneider enlisted the aid of Boston financial strategist Serge Semenenko, retired chairman of First National Bank of Boston. Semenenko arranged for the French to sell their Columbia stock at a handsome profit, a chunk of it going to Matthew Rosenhaus, who controls J. B. Williams CO. Lee National also lost interest in Columbia.

At about this time, Columbia was enjoying a series of hits, which effectively put its stock beyond the reach of takeover bids. The key to this was studio head Michael J. Frankovich, who turned out the best picture of 1966 ("A Man for All Seasons") and 1968 ("Oliver"), along with such winners as "In COld Blood," "To Sir With Love" and "Born Free."

But Frankovich quit, and in the early 1970s Columbia's fortunes plunged. Debts soared, and its stock sank to $2 a share.

In 1973, with the company nearly out of business, producer Ray Stark got Allen & Co. to invest in Columbia. (Allen interests and Rosenhaus now own a total of about 15 per cent of the shares.)

Allen & Co. named one of its executives, Alan J. Hirschfield, as president. Stark pressed to have his friend and agent, David Begelman, made head of the movie production division, the most important Columbia subsidiary.

In the years since, Columbia has confounded skeptics by being a born-again corporation. Unprofitable business was cut away, a music company and a TV station were sold to pay debts, and new business, such as a pinball machine manufacturer, was acquired to lessen dependence on the volatile movie business.

Despite some diversification, Columbia remains essentially what Harry Cohn created - a movie company. With a string of recent movie success - and in anticipation of big returns from "Close Encounters of the Third Kind" - Columbia's stock has climbed as high as $20.

But that was before David Begelman was reinstated. Perhaps reflecting the market's view of the affair, the stock has remained depressed ever since, and last Friday it closed at $14.50.