Abstract
Post-crash times have provided a platform for many people to hawk their version of just what is wrong with contemporary forms of business. Perhaps they couldn’t be heard before, voices drowned beneath the slot machine cascade of a few people hitting the jackpot, but there is now no shortage of condemnations of greedy bankers, co-opted regulators, autistic economists and sociopathic corporations. And, just in case you think you are outside all this, the criticism includes the business schools which employ most of the authors, editors and reviewers for this Journal. That’s me, and it’s probably you, dear reflexive reader.
Though CMS types, and this Journal, can claim to have been griping consistently for some time now, its rather chastening to read other people saying the sort of things that ‘we’ might rather like to say. Locke, Spender and Pearson are all retired B-School academics, but none have any particular interest in ‘critical’ studies. Indeed, judging by the reference lists here, they are almost entirely uninfluenced by anything written by the sort of people associated with Organization, and are generally rather hostile to ‘Marxism’, ‘postmodernism’ and the like. Yet what they say is profoundly ‘organizational’ in the sense of proposing a diagnosis and set of actionable solutions for the problems caused by managerialism and neo-liberalism. They seem to be critical, but have bypassed ‘the critical’, which provokes some pretty big questions for a journal like this one.
Confronting Managerialism has a pretty pugnacious subtitle—‘How the Business Elite and Their Schools Threw Our Lives Out of Balance’. Early on in the book Locke and Spender make a crucial distinction—between ‘managing’ and ‘managerialism’—which pretty much informs the rest of the book. Quoting an earlier work by Locke, they say that managerialism is what happens when: a special group, called management, ensconces itself systematically in an organization and deprives owners and employees of their decision making power (…) 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. (p. xi)
This coup, because it hasn’t always been like this, rests on a set of assumptions which have been promulgated by B School researchers and teachers, and has resulted a series of attitudes which Locke and Spender are happy enough to call ‘immoral’. The management ‘caste’ (a word they use often) and their business school cheerleaders have encouraged ‘business leaders’ greed, which trickles down as the students’ evident sense of entitlement, limitless hubris, and general disregard for social norms that might stand in the way of their personal success’ (p. xix).
This is powerful stuff, and it will doubtless set many heads nodding. The descriptions of the expansion and quantification of the US business school nicely complements Rakesh Khurana (2007) or Ellen O’Connor’s work (2012), particularly the sense that the early promise of the business school has been betrayed. Since the 1970s, the idea of a management ‘science’, with its enthusiasm for modelling and operations research through the application of information technology, combined with the dominance of neo-classical economics, agency theory and rational choice theory, has supplanted a practical and humanist education oriented to some wider social good. In its most toxic manifestation this has led to the invention of ‘vehicles of greed’ based on Chicago School economics, and a set of assumptions that work for those who live in Black-Scholes or Fama world, but has only damaging consequences for the ordinary places that most of us live and work in. So far so good, in terms of a description of ‘things we don’t like’, but what sets this book apart is its contrast between US forms of managerial capitalism, and other ‘varieties of capitalism’ (Hall and Soskice, 2001) which appear not to have been seduced by managerialism and business schools. The big comparison is between the Japanese and German motor industries with ‘employee-dependent forms of management and a strong collaboration ethic’ (p. 107) and the US. In the latter, the business school teaching of agency theory encouraged short term profit taking, whilst German and Japanese co-determination and group associations stresses long term mutual gains.
Setting aside any scepticism about the German and Japanese experience, this all seems like solidly practical stuff, but Locke and Spender underpin it with the idea of a ‘breakup of moral order after 1980’, which led me to wonder just what combination of nostalgia and certainty the authors might be deploying here. It is at this point that matters become a little mysterious, with many references to the idea of a ‘moral compass’ which seems to originate from religion. Not all religions, because the individualist ideology of the US Christian right comes in for particular criticism, but there are sections in which Islam, Confucianism and German protestant Christianity are argued to be at the root of a connection between doing good and doing well. We might think that this was an argument for a respiritualized social order, when it is claimed (for example) that ‘The absence of a moral order in the finance world has been patently obvious’ (p. 172). Yet, on the next page, Locke and Spender refer to ‘effective collective action’, and not ‘individual motivation’ as the answer to our woes. Yet this collective action can not be ‘constant bureaucratic state regulation and the intervention of state control mechanisms’ (p. 185) because these are authors who believe in enterprise. Instead, what is proposed is strengthening managers’ ability to see off predators; separating managing from supervisory boards; and business schools re-establishing contact with manufacturing and widening their remit so that they educate all stakeholders in businesses—including trade unions.
Gordon Pearson’s The Road to Co-operation has a similarly blunt subtitle - ‘Escaping the Bottom Line’. Like Locke and Spender, Pearson rails against neoclassical economics as ‘corrosive and false’ with its endless stress on ‘freedom from’ for a few entirely neglecting the ‘freedom to’ for the many. Unlike Locke and Spender, he sees the world from Britain, even using a picture of Big Ben on the book cover, unlike the cigar smoking figure with dollars for eyes which decorates Confronting Managerialism. Pearson’s book begins with a stroll through the history of economics. Dominant ideas about ‘the economy’, ‘markets’ ‘the firm’ and ‘people’ are argued to be empirically incorrect views of these phenomena, but also ‘malign’, in the sense that they encourage actions which cause collective damage. Taking his cue from Veblen, Keynes, Galbraith, Drucker, Ostrom and others, Pearson argues for a view of human beings as more than selfish money loving monkeys. Or rather, that we can be more, but if we listen to the insistent whispers from the business school we will end up being so much less. Theory Y is always in danger of degrading into theory X,
The corruptible monkey’s tragedy can be seen only too well when Pearson gets onto questions of environmental sustainability, and shows how the corporation has become what Chomsky calls an ‘amoral externalizing machine’ (p. 93). If we are not to be destroyed by this machine then we need to recognize our collective fates, tied together as we are by the natural limits to unrestrained growth. It is at this point that Pearson then swings to a set of ‘varieties of capitalism’ arguments too, particularly in terms of different assumptions about corporate governance, and the roles and responsibilities of directors, owners, managers and so on. Like Locke and Spender, his comparisons are Japan and Germany, though he adds China and India to the list. In each case, he claims to show that neoclassical deregulation, privatization and shareholder primacy is not the one best way. Instead, we need a theory and practice of multiple accountabilities to multiple stakeholders—including the environment, the community, tax authorities, employees and so on. Pearson wants a sustainable theory to support sustainable practices, and here the (often slippery) word means acting with an eye to the long term in all dealings—whether with customers, regulators or trees. His solutions put a stress on interdependence and equality, as both good descriptions of how we are, and normative statements about what we should be and could be (Wilkinson and Pickett, 2009). He ends up arguing for more than merely what he calls a ‘revised ideology’ but a series of legal changes which would enfranchise employees, protect and finance cooperatives, co-ownership and partnerships, and embed working governance structures for corporations. Competition must be regulated, and financial speculation must be prevented when it causes damage to the ‘real’ world.
Comparing the two books is instructive. Both share a sense that there were, once, better forms of management and management education. This sentence comes from Pearson, but could be from either book: Then, around 1980, the field began to be invaded by the simplistic neoclassical ideology which increasingly overwhelmed management theory and practise, turning them into a top-down, hierarchical, command and control, shareholder wealth maximising cliché. (p. 56)
It is difficult to comment on the factual accuracy of the idea of a golden age of management, presumably from the 1940s to the 1970s, but it does give both books the sense of being written by grumpy old men who remember kinder times. These are Larry David or Victor Meldrew’s guides to what is wrong with the world, depending on which side of the Atlantic you feel most comfortable with. Both books are idiosyncratic too, and often seem poorly disciplined, in terms of the variety of targets they aim at, or the sort of reader that they seem to be assuming. Finally, both are also books which avoid political radicalism, in favour of reforms which might ameliorate the damage being caused by managerial capitalism. Again, from Pearson, but it could come from either book: The real source of economic progress and employment is the traditional firm. It is the firm that has produced the affluent society while depleting earth’s resources, polluting and damaging the climate. And the firm is the means by which all these problems can be targeted as opportunities for the development of new technologies, systems and products. (p. 98)
‘Traditional’ is an interesting word in this context, and it clearly marks both of these books as being concerned to rediscover something we have lost.
What sets the two books apart is their understanding of what needs to change, and this, for me is where Pearson’s book displays a more grounded ambition and less rhetoric. Locke and Spender, in their musings about religion, their enthusiasm for a relational view of science, and a faintly ‘Eastern’ view of the connection between experience and action (they cite Capra, Senge and others very approvingly), head off in directions which make sensitive readers like me suspicious. Both books work best when they are being practical about what has gone wrong, and what needs to be done about it, and this seems to sit uneasily with grand statements about morality, humanism or epistemology. I particularly liked Pearson’s inclusion of ideas about participation, co-operatives, and worker democracy as being pragmatic ways in which managerialism might be addressed, and his insistence that co-operation is a both a factual and normative counter balance to the celebration of selfishness (Erdal, 2011). Because his arguments come with so little metaphysical baggage, and are presented as practical solutions to practical problems, it is difficult not to be persuaded.
There is much in these books which is worth reading, but as I noted at the start, ‘they’ are not reading ‘us’. Or rather, if they are, there is little that they find particularly helpful in making their arguments. Perhaps this should not concern me because, as I said in a review of a rather conservative anti-management book a few years ago, my enemy’s enemies are not necessarily my friends (Parker, 2004). Yet in this case, it seems that these are works which should have been written by people who come from the readers and authors of this Journal. These authors believe that good management carries social duties and they suggest ways in which corporate excess should be regulated. They argue for participation, co-operation and a more equitable distribution of wealth. They may not be radical enough for many—since they want to work with capitalism rather than against it—and they don’t even mention Foucault, identity or narrative, but they are the sort of books that are aimed at helping people to change their minds. And when minds are changed, others things may well follow. That, it seems to me, is one of the things that should be done.