Managing people and organizations in changing contexts Understanding management Introduction According to Peter Drucker,one of the most prominent business gurus of recent times,management is a timeless,human discipline.It has been used to build the Great Wall of China,to run empires and armies throughout history,and to guide the development of the join stock company,which has been the key institution in the develop- ment of modern capitalism.During the later part of the twentieth century and the early part of the twenty-first century,management became one of the fastest growing occupations.because managers are usually (but not always)seen to be esse ential to organizational suc cess (Bloom et al,2005).Moreover,whether we work in the private, public or voluntary sectors of the economy,managers and their work touch virtually every aspect of our economic,social and,increasing- ly,political lives.Those of you who aren't yet a manager but aspire to be one most likely will have had direct experience of being managed by others.Sometimes this experience will have been positive,leading you to achieve excellent results,and sometimes it will have been neg- ative,perhaps leading to underperformance,to undue levels of stress,lack of esteem or lack of job satisfaction.Even those who are experienced managers need to reflect on their managerial abilities or competence,and to work continuously on perfecting their craft. This text is aimed at helping both aspiring and experienced man- agers explore the nature of management and managing the overall process of management and,as Drucker pointed out ma ny years ago specifically to address the key problem of managing people.It has also been written from the perspective that the practice of managing peo- ple is influenced by the context in which it is performed,and that con- texts change over time. Key questions on management knowledge When we embark on any study of management,it is important for us to understand the relationship between theory and practice,not least because we are usually taught theories that we rightly expect to be able to put into action.During a period of more than 25 years teaching management students and executives in many different countries
Understanding management Introduction According to Peter Drucker, one of the most prominent business gurus of recent times, management is a timeless, human discipline. It has been used to build the Great Wall of China, to run empires and armies throughout history, and to guide the development of the joint stock company, which has been the key institution in the development of modern capitalism. During the later part of the twentieth century and the early part of the twenty-first century, management became one of the fastest growing occupations, because managers are usually (but not always) seen to be essential to organizational success (Bloom et al., 2005). Moreover, whether we work in the private, public or voluntary sectors of the economy, managers and their work touch virtually every aspect of our economic, social and, increasingly, political lives. Those of you who aren’t yet a manager but aspire to be one most likely will have had direct experience of being managed by others. Sometimes this experience will have been positive, leading you to achieve excellent results, and sometimes it will have been negative, perhaps leading to underperformance, to undue levels of stress, lack of esteem or lack of job satisfaction. Even those who are experienced managers need to reflect on their managerial abilities or competence, and to work continuously on perfecting their craft. This text is aimed at helping both aspiring and experienced managers explore the nature of management and managing the overall process of management and, as Drucker pointed out many years ago, specifically to address the key problem of managing people. It has also been written from the perspective that the practice of managing people is influenced by the context in which it is performed, and that contexts change over time. Key questions on management knowledge When we embark on any study of management, it is important for us to understand the relationship between theory and practice, not least because we are usually taught theories that we rightly expect to be able to put into action. During a period of more than 25 years teaching management students and executives in many different countries, 2 Managing people and organizations in changing contexts
Chapter I An introduction to managing people in changing contexts there are two questions that I am continuously asked concerning the nature of management knowledge: 1 Is there a one-best-way or set of best practices in manage- ment?Or,to put this question in slightly more formal terms: (a)Is there a single set of truths about management that rep- resents its core body of knowledge,and(b)if so,can this body of knowledge be applied in most,if not all,contexts? 2 Why is it that ideas about business and management seem to be a bit like the fashion industry,with new ideas being pro- posed every week? Increasingly,I'm of the opinion that these two questions should be raised when studying management,or when contemplating any ideas from consultants,conferences or the increasing volume of business books that we find in airport bookstores and on the Internet.Such questions are particularly relevant because many managers,one sus pects,are looking for knowledge that helps them simplify the world they must confront,especially bility of a 'magic bullet'or 'one-best-way'is an attractive proposition because it means they don't have to think too much about what the are doing.And,as Henry Mintzberg(2004),one of the most insightfu commentators on management,pointed out,managers are very much focused on'doing'rather than reflecting,especially reflecting on aca demic theories dreamt up by people who have very little experience of erpoint'presentation,is not something that usually accords with their experience.This is especially true when nearly all new books,courses or consultants tell them there is a better way of doing things,which is usually the way advocated by the author,teacher or adviser.First,how- ever,they are usually required to discard their old models of manage. ment and,with them,their personal investment in old and'no-longer- useful'ideas.For their pains,they usually get little more from new guru-speak'than a recycling of even older ideas,often with their ori gins in the early 1900s,but dressed up in new clothing or new 'spin As a result,they become sceptical or even cynical about any new busi- ness programme or form of management education.If such a process sounds familiar,then you are in tune with many of the critics of busi- ness education and the management consulting industrv Paradoxically,regardless of the extent to which the management con sulting and education industry is challenged to explain its relevance by
there are two questions that I am continuously asked concerning the nature of management knowledge: 1 Is there a one-best-way or set of best practices in management? Or, to put this question in slightly more formal terms: (a) Is there a single set of truths about management that represents its core body of knowledge, and (b) if so, can this body of knowledge be applied in most, if not all, contexts? 2 Why is it that ideas about business and management seem to be a bit like the fashion industry, with new ideas being proposed every week? Increasingly, I’m of the opinion that these two questions should be raised when studying management, or when contemplating any ideas from consultants, conferences or the increasing volume of business books that we find in airport bookstores and on the Internet. Such questions are particularly relevant because many managers, one suspects, are looking for knowledge that helps them simplify the world they must confront, especially given the increasingly complex nature of the environment in which they work. To be told there is the possibility of a ‘magic bullet’ or ‘one-best-way’ is an attractive proposition, because it means they don’t have to think too much about what they are doing. And, as Henry Mintzberg (2004), one of the most insightful commentators on management, pointed out, managers are very much focused on ‘doing’ rather than reflecting, especially reflecting on academic theories dreamt up by people who have very little experience of practising management. However, the prospect of a magic bullet, contained in the nostrums of a single management book or ‘bulleted powerpoint’ presentation, is not something that usually accords with their experience. This is especially true when nearly all new books, courses or consultants tell them there is a better way of doing things, which is usually the way advocated by the author, teacher or adviser. First, however, they are usually required to discard their old models of management and, with them, their personal investment in old and ‘no-longeruseful’ ideas. For their pains, they usually get little more from new ‘guru-speak’ than a recycling of even older ideas, often with their origins in the early 1900s, but dressed up in new clothing or new ‘spin’. As a result, they become sceptical or even cynical about any new business programme or form of management education. If such a process sounds familiar, then you are in tune with many of the critics of business education and the management consulting industry. Paradoxically, regardless of the extent to which the management consulting and education industry is challenged to explain its relevance by Chapter 1 An introduction to managing people in changing contexts 3
Managing people and organizations in changing contexts business leaders and politicians,its influence has become more wide spread. In this chapter we shall address the two questions raised at the beginning of this section.I do so because it is in everyone's interests teachers,students of management and examiners alike-to avoid the reputation for lack of relevance that management knowledge enjoys with many practitioners(Dipoye,2005).Such a reputation ha largely come about because dominant sections of the producer com- munity of management knowledge-the producers of business guru books and the management consulting industry-have oversold th idea of the one-best-way,in wave after wave of management fads (Pascale,1999).Francis Wheen (2004)has labelled much of this material,especially the self-help books by ex-business leaders,as'old snake oil in new bottles'.pointing to the often messianic salesman- ship of banal aphorisms dressed up in jargon and pseudo-scientific phrases,such as 're-engineering,benchmarking and downsizing'.If the guru industry has not helped the cause,neither have many man- agement academics.In certain sections of the 'academy',it has become fashionable to adopt the opposite position of extreme rela- tivism,that there are no truths about management and,since we live in an increasingly changeable and therefore unknowable world there is nothing worth teaching about management.Serious practi- tioners and students of management,no doubt,are looking in between these two perspectives for something that combines the rigour of the best of the academic world with the relevance that good consultants and reflective practitioners can bring to organizational decision-makers.So,to address these questions,we have to go back in time to examine two concepts in management that go straight to the heart of the rigour-relevance debate.These concepts are univer salism and change. Management as a set of universal truths Universalism and relativism in management There have been many books aimed at helping managers understand and improve their management skills,not just in the area of people management but in other managerial functions such as managing information,budgets and finances,and operations.Many of thes books take a universalist perspective on management
business leaders and politicians, its influence has become more widespread. In this chapter we shall address the two questions raised at the beginning of this section. I do so because it is in everyone’s interests – teachers, students of management and examiners alike – to avoid the reputation for lack of relevance that management knowledge enjoys with many practitioners (Dipoye, 2005). Such a reputation has largely come about because dominant sections of the producer community of management knowledge – the producers of business guru books and the management consulting industry – have oversold the idea of the one-best-way, in wave after wave of management fads (Pascale, 1999). Francis Wheen (2004) has labelled much of this material, especially the self-help books by ex-business leaders, as ‘old snake oil in new bottles’, pointing to the often messianic salesmanship of banal aphorisms dressed up in jargon and pseudo-scientific phrases, such as ‘re-engineering, benchmarking and downsizing’. If the guru industry has not helped the cause, neither have many management academics. In certain sections of the ‘academy’, it has become fashionable to adopt the opposite position of extreme relativism, that there are no truths about management and, since we live in an increasingly changeable and therefore unknowable world, there is nothing worth teaching about management. Serious practitioners and students of management, no doubt, are looking in between these two perspectives for something that combines the rigour of the best of the academic world with the relevance that good consultants and reflective practitioners can bring to organizational decision-makers. So, to address these questions, we have to go back in time to examine two concepts in management that go straight to the heart of the rigour–relevance debate. These concepts are universalism and change. Management as a set of universal truths Universalism and relativism in management There have been many books aimed at helping managers understand and improve their management skills, not just in the area of people management but in other managerial functions such as managing information, budgets and finances, and operations. Many of these books take a universalist perspective on management. 4 Managing people and organizations in changing contexts
Chapter I An introduction to managing people in changing contexts Key concept:The universalist perspective on management The proposition is that it is possible to discover a set of universal truths concerning principles,values and morals that can be equally applied in all business and manage- ment contexts.These truths can be established either by reasoning from first princi- ples or by empirical observation.The fundamental points of this perspective are its uni versal application and its relative permanence,though most universalists acknowledge that the gradual accumulation of new knowledge can improve our thinking.Such a perspective is associated with attempts to establish a science of management,and to establish universal codes of ethics for business behaviour that transcend national boundaries. Such a view dates back to before the end of the nineteenth century best exemplified by the works of Frederick Taylor in the USA,the so- called father of scientific management,and by the French businessman- theorist,Henry Fayol.Both of these writers developed a set of principle of good management that have formed the basis for much management education(Clegg et al,2005),and their works are still discussed today in undergraduate and graduate classes in business and management al over the world.We shall return to their ideas later in this chapter. Perhaps more controversially,the universalistic perspective con tends that most of these management principles can apply regardless of national cultural and institutional context.Jack Welsh,the former CEO of General Electric,best exemplified this view when he once opined that what was good for his company was good for the rest of the world.Welsh's view reflected the dominance of the American management model,which has influenced thinking and practice in many countries.There are at least three possible explanations for such dominance.These are:(i)the influence of US multinationals on global economic development;(ii)the influence of management education programmes such as the MBA-an American invention in the late nineteenth century;and (iii)the influence of the global, but mainly US,management consulting and management guru industries. There is undoubtedly something in the claims of universalists,given the history of post-Second World War reconstruction and the reliance on US finance and ideas to rebuild the economies of Europe and Japan.The UK,Germany and Japan adopted many American ideas and accepted aid that,in turn,was dependent on their acceptance of American ways of managing (Locke,1996).However,the adoption of
Such a view dates back to before the end of the nineteenth century, best exemplified by the works of Frederick Taylor in the USA, the socalled father of scientific management, and by the French businessmantheorist, Henry Fayol. Both of these writers developed a set of principles of good management that have formed the basis for much management education (Clegg et al., 2005), and their works are still discussed today in undergraduate and graduate classes in business and management all over the world. We shall return to their ideas later in this chapter. Perhaps more controversially, the universalistic perspective contends that most of these management principles can apply regardless of national cultural and institutional context. Jack Welsh, the former CEO of General Electric, best exemplified this view when he once opined that what was good for his company was good for the rest of the world. Welsh’s view reflected the dominance of the American management model, which has influenced thinking and practice in many countries. There are at least three possible explanations for such dominance. These are: (i) the influence of US multinationals on global economic development; (ii) the influence of management education programmes such as the MBA – an American invention in the late nineteenth century; and (iii) the influence of the global, but mainly US, management consulting and management guru industries. There is undoubtedly something in the claims of universalists, given the history of post-Second World War reconstruction and the reliance on US finance and ideas to rebuild the economies of Europe and Japan. The UK, Germany and Japan adopted many American ideas and accepted aid that, in turn, was dependent on their acceptance of American ways of managing (Locke, 1996). However, the adoption of Chapter 1 An introduction to managing people in changing contexts 5 Key concept:The universalist perspective on management The proposition is that it is possible to discover a set of universal truths concerning principles, values and morals that can be equally applied in all business and management contexts. These truths can be established either by reasoning from first principles or by empirical observation. The fundamental points of this perspective are its universal application and its relative permanence, though most universalists acknowledge that the gradual accumulation of new knowledge can improve our thinking. Such a perspective is associated with attempts to establish a science of management, and to establish universal codes of ethics for business behaviour that transcend national boundaries
Managing people and organizations in changing contexts American ideas did not,as some people claim,result in the 'Americanization'of business and management in these countries.For example,in the 1970s and 1980s,Japanese companies came to dominate world markets in industries that the USA had traditionally owned (Pascale and Athos,1981)by using techniques of quality man- agement and production management that have since become popu- lar in many Western organizations. Similarly,German companie developed their own way of managing and running businesses,based on their historical veneration of engineering specialists and the adop- tion of 'co-determination'before and after 1945,a practice that gave employees a much greater say in the running of companies (much to the distaste of some US occupying generals and CEOs).Consequently, there were severe limitations placed on the forces for convergence on and around the American model of management.This limitation of universalist principles is one of the key themes of this book. Time Out: Think about this:the history of co-determination in Germany Historically,German business managers have had much less faith than the Americans or British in the powers of markets to regulate business and competition,and have placed greater store in the power of the national and state governments.Thus,co determination in Germany has its origins in legislation passed in the early 1800s to give workers rights to social insurance and,later,in 1891,to rights to participate in man- agement decision-making,involving joint consultation on social matters at work Following the First World War,in 1918,German employers,rather reluctantly,suc- cumbed to pressure to give 'employees rights to co-determination with management in social policy and to be consulted in personnel and economic decisions'(Locke,1996 p.58).Subsequent legislation in 1920 allowed for the creation of works councils in firms employing mor than 20 employees to act on social,personnel and economic matters.Hitler and the Nazis dissolved works councils when they came to power in the 1930s,but following pressure from the Christian churches and trade unions after the Second World War,co-determination was re-established to give workers even greater rights to co-decisions in the running of firms on economic issues,including 'expan- sion,consolidations and shutdowns',and to joint consultation in the purchase and sale of equipment,changes in production methods,accounting procedures,etc The passing of such legislation was done when Germany was in the hands of occupy- ing forces,most notably the Americans.This was surprising in some respects,because without US approval German discretion to pass legislation was severely limited.The
American ideas did not, as some people claim, result in the ‘Americanization’ of business and management in these countries. For example, in the 1970s and 1980s, Japanese companies came to dominate world markets in industries that the USA had traditionally owned (Pascale and Athos, 1981) by using techniques of quality management and production management that have since become popular in many Western organizations. Similarly, German companies developed their own way of managing and running businesses, based on their historical veneration of engineering specialists and the adoption of ‘co-determination’ before and after 1945, a practice that gave employees a much greater say in the running of companies (much to the distaste of some US occupying generals and CEOs). Consequently, there were severe limitations placed on the forces for convergence on and around the American model of management. This limitation of universalist principles is one of the key themes of this book. 6 Managing people and organizations in changing contexts Time Out: Think about this: the history of co-determination in Germany Historically, German business managers have had much less faith than the Americans or British in the powers of markets to regulate business and competition, and have placed greater store in the power of the national and state governments. Thus, codetermination in Germany has its origins in legislation passed in the early 1800s to give workers rights to social insurance and, later, in 1891, to rights to participate in management decision-making, involving joint consultation on social matters at work. Following the First World War, in 1918, German employers, rather reluctantly, succumbed to pressure to give ‘employees rights to co-determination with management in social policy and to be consulted in personnel and economic decisions’ (Locke, 1996, p. 58). Subsequent legislation in 1920 allowed for the creation of works councils in firms employing more than 20 employees to act on social, personnel and economic matters. Hitler and the Nazis dissolved works councils when they came to power in the 1930s, but following pressure from the Christian churches and trade unions after the Second World War, co-determination was re-established to give workers even greater rights to co-decisions in the running of firms on economic issues, including ‘expansion, consolidations and shutdowns’, and to joint consultation in the purchase and sale of equipment, changes in production methods, accounting procedures, etc. The passing of such legislation was done when Germany was in the hands of occupying forces, most notably the Americans. This was surprising in some respects, because without US approval German discretion to pass legislation was severely limited. The