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Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance
Confronting Managerialism offers a scathing critique of the influence of neoclassical economics and modern finance on business school teaching and management practice. Locke and Spender show that responsible management has given way to 'managerialism', whereby an elite caste of businessmen disconnected from any ethical considerations call the shots.
The book traces the loss of managers' earlier social concerns, amply encouraged by management education's transformation since the 1960's, especially in the US. It also questions not only the social ethics of the US management caste but its management efficacy compared to systems of management that are highly employee participatory and dependent, such as in Germany and Japan.
A unique, topical and controversial look at a subject that impacts us all.
The book traces the loss of managers' earlier social concerns, amply encouraged by management education's transformation since the 1960's, especially in the US. It also questions not only the social ethics of the US management caste but its management efficacy compared to systems of management that are highly employee participatory and dependent, such as in Germany and Japan.
A unique, topical and controversial look at a subject that impacts us all.
- GenresEconomicsNonfiction
240 pages, Paperback
First published August 9, 2011
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Displaying 1 - 5 of 5 reviews
January 1, 2022
… to subordinate management to the constraints of a rationally omniscient business school view of management science, with decision power lodged in a management caste, limits the firm’s ability to deal effectively with management problems.
-p. 182
I am a physician whose life is “thrown out of balance” by hospital management. I was looking for solace (and perhaps answers!) in this study of specifically American business education and managerialism. I gained some insight but not a full Revelation.
The authors make a convincing case that management is of paramount importance, but that the recent American and British style of managerialism is counterproductive for a company’s survival and for the well-being of whatever enterprise. While the focus is on finance and manufacturing, with most of the examples therein, this could be extended to any discipline. They define managerialism thusly:
What occurs when a special group, called management, ensconces itself systematically in an organization and deprives owners and employees of their decision-making power (including the distribution of emoluments) – and justifies that takeover on the grounds of the managing group’s education and exclusive possession of the codified bodies of knowledge and know-how necessary to the efficient running of the organization.(Locke 2009, p28)
-p. xi
They trace an argument that American managerialism has a unique history, shaped by war, manufacturing, and education. American business education is unique in the world, with the only parallel being that of the UK. Other dynamic economies (Japan, Germany) have an unrecognizable educational system (almost no MBA schools, for example).
In Germany and Japan, there is structurally ensconced worker participation in the governing and operational management of a firm/corporation, to a degree that is unrecognizable in the US. The authors support this paradigm, because the entire educational system is centered around it in Germany (e.g. engineers and blue collar employees interact closely, while years of on-the-job experience is mandatory for any kind of managerial promotion). As opposed to the American path in which one just learns “management,” without any particular aim for said management:
A person does not just manage. Rather he/she manages a hat factory, a steel mill, a department store, a railway company.
-p. 174-5
In Japan, there is the idea of kata in business, really perfected by Toyota (see: Toyota Kata: Managing People for Improvement, Adaptiveness and Superior Results), meaning lean, incremental, and scientifically based process improvement. The input of the actual workers is of paramount importance, and the mingling of white and blue collar workers is crucial to this methodology. This is anathema to the rigidity of the American management caste.
Management talks of trust and then acts every day in almost every way to dissolve it.
-p. 181
The authors recommend many reforms, but are pessimistic and practical. They think that only by American failure and lagging behind dynamic European and Asian economies will the US change its ways:
The contrast between dynamic American capitalism and stagnant socialism only exists in misinformed American minds; reality now is a decaying US economic structure competing with a dynamic Eurasian continent, as every person who rides the bullet trains in Europe, China, South Korea, and Japan and visit recently constructed coordinated trade centers readily grasps.
-p. 192
I now have a language to discuss this problem, as a general reader. I long for “employee participation in firm governance” or “co-determination.” This would mean all stakeholders are involved in selection of CEOs and governing boards, and in the running of an organization. Although not mentioned whatsoever, I can't think of a better place to start than the biggest economic sector of all: hospitals and health care.
-p. 182
I am a physician whose life is “thrown out of balance” by hospital management. I was looking for solace (and perhaps answers!) in this study of specifically American business education and managerialism. I gained some insight but not a full Revelation.
The authors make a convincing case that management is of paramount importance, but that the recent American and British style of managerialism is counterproductive for a company’s survival and for the well-being of whatever enterprise. While the focus is on finance and manufacturing, with most of the examples therein, this could be extended to any discipline. They define managerialism thusly:
What occurs when a special group, called management, ensconces itself systematically in an organization and deprives owners and employees of their decision-making power (including the distribution of emoluments) – and justifies that takeover on the grounds of the managing group’s education and exclusive possession of the codified bodies of knowledge and know-how necessary to the efficient running of the organization.(Locke 2009, p28)
-p. xi
They trace an argument that American managerialism has a unique history, shaped by war, manufacturing, and education. American business education is unique in the world, with the only parallel being that of the UK. Other dynamic economies (Japan, Germany) have an unrecognizable educational system (almost no MBA schools, for example).
In Germany and Japan, there is structurally ensconced worker participation in the governing and operational management of a firm/corporation, to a degree that is unrecognizable in the US. The authors support this paradigm, because the entire educational system is centered around it in Germany (e.g. engineers and blue collar employees interact closely, while years of on-the-job experience is mandatory for any kind of managerial promotion). As opposed to the American path in which one just learns “management,” without any particular aim for said management:
A person does not just manage. Rather he/she manages a hat factory, a steel mill, a department store, a railway company.
-p. 174-5
In Japan, there is the idea of kata in business, really perfected by Toyota (see: Toyota Kata: Managing People for Improvement, Adaptiveness and Superior Results), meaning lean, incremental, and scientifically based process improvement. The input of the actual workers is of paramount importance, and the mingling of white and blue collar workers is crucial to this methodology. This is anathema to the rigidity of the American management caste.
Management talks of trust and then acts every day in almost every way to dissolve it.
-p. 181
The authors recommend many reforms, but are pessimistic and practical. They think that only by American failure and lagging behind dynamic European and Asian economies will the US change its ways:
The contrast between dynamic American capitalism and stagnant socialism only exists in misinformed American minds; reality now is a decaying US economic structure competing with a dynamic Eurasian continent, as every person who rides the bullet trains in Europe, China, South Korea, and Japan and visit recently constructed coordinated trade centers readily grasps.
-p. 192
I now have a language to discuss this problem, as a general reader. I long for “employee participation in firm governance” or “co-determination.” This would mean all stakeholders are involved in selection of CEOs and governing boards, and in the running of an organization. Although not mentioned whatsoever, I can't think of a better place to start than the biggest economic sector of all: hospitals and health care.
December 23, 2019
Traces the origins of and development of the curriculum of American business schools. Note the influx of ideas from the big brained geniuses at such centres of learned wisdom as the Rand Corporation and Ford Foundation. Compares American managerial practices with Japan and Germany and why the differences exist.
At bottom, the attempt to turn management into a positivist science seems to have misfired. It might have won Nobel Prizes for professors and set them to work on mounds of research, published in academic journals and taught in MBA classrooms, but from a management point of view so much investment in the creation of a positivist management science in business schools has not, to use their jargon, been “cost effective.” It might have been better to have devoted the money and the time in business school education to the human aspect of management and to have left the number crunching to people in natural science and technology.
Successful [US] managers believed they could make decisions without knowing the company’s products, technologies, or customers. They had only to understand the intricacies of financial reporting ... [B]y the 1970s managers came primarily from the ranks of accountants and controllers, rather than from the ranks of engineers, designers, and marketers. [This new managerial class] moved frequently among companies without regard to the industry or markets they served ... A synergistic relationship developed between the management accounting taught in MBA programs and the practices emanating from corporate controllers’ offices, imparting to management accounting a life of its own and shaping the way managers ran businesses. (Johnson and Bröms, 2000, 57)
June 21, 2012
A couple of business professors describe how elite MBA schools in the US trained its students to follow inappropriate scientific models that was one of the key factors leading to the shocking failure of financial institutions in 2008. The failure was not only financial but also moral. Part of their analysis is historical, showing how in the US the obsession with top-down management based on manipulating numbers to make sure that companies earned short-term profit over maintaining a sustainable corporate prosperity that rewarded all stakeholders began in the late 19th century. In contrast, the Japanese empowered shop workers and employed other techniques to decentralize decisions on the factory floor. The paradigm case is the auto industry. The Japanese car manufactures concentrated on building high quality cars whereas American car makers focused on profit. The result is that the Americans had their butts handed to them. Though American car makers attempted to copy the Japanese success, they failed in part because the managerial class was unable to let go of the adversarial relationship they had with the workers (here the unions were also partially to blame). Another reason is the emphasis on profits instead of quality. There are other Japanese practices that US car makers could not adapt to as they entailed sharing decision making with workers. In contrast, the Germans, faced with the same existential threat from the Japanese, were able to adapt Japanese methods successfully because they didn't have the managerial class as in the US and they did have a history of workplace democracy in which workers gave integral and expected feedback, and also exercised real power in the management of the German firms. A fundamental difference is that Japanese and German managers do not receive their training in elite business schools, which don't exist in their respective countries, but, in the case of Germany, through apprenticeship programs that trained familiarity with all aspects of a business, including the moral responsibility firms have to their employees, community, environment, and so on. In contrast, American managers are taught scientific methods that support amoral actions such as undercutting defined pensions, shareholder value if necessary, outsourcing manufacturing, and other practices with the effect of harming some significant group.
This is a relatively short book that should be read by anyone interested in some of the underlying reasons for the disastrous mess we're in. The authors give some ideas for reform in the last chapter, though they express pessimism that they would be adopted.
This is a relatively short book that should be read by anyone interested in some of the underlying reasons for the disastrous mess we're in. The authors give some ideas for reform in the last chapter, though they express pessimism that they would be adopted.
January 20, 2016
There's plenty of food for thought in this indictment of professional managers. It traces the development of a managerial elite in the U.S. and portrays them as an amoral caste that is wreaking havoc on the economic well-being of everybody else.
January 14, 2015
It was pretty good. Not sure it really managed to convince me of its essential premise, but the comparative discussion of management schools of thought and structures between the US and other world powers was pretty interesting. I enjoyed the conclusion.
Displaying 1 - 5 of 5 reviews