Cover Story 50 years of Management: Where from and where to now?

Like every other sub-species, managers evolved – product of an environment they themselves constantly shape, mouldand recreate at the behest of owners and the dictates of the marketplace. Their ancestry dates back several thousand years, but ‘modern managers’ really only emerged from the grime of the Industrial Revolution in the 20th century.
Despite this fast-tracked evolution, some experts believe management’s organisational habitat is changing so rapidly that managers will not adapt in time to survive. When Kenneth Cloke and Joan Goldsmith, authors of the book The End of Management, told one of management’s founding theorists Peter Drucker of their plans to write the book, he simply responded: “It’s about time.”
But is it really likely that managers have had their day? Doubtful, although there is pronounced global swing toward greatly modified behaviour. Managers at the top end of the corporate feeding chain all too frequently show signs of excessive behaviour and abuse of their environment. Over-grazing can lead to extinction.

The first age of management
For their first 50 or so years, modern managers were masters and commanders – not much removed from their feudal ancestors. Command-and-control management survives to this day. It consists of set of policies and procedures designed to provide managers with the tools to demand employee compliance, form of minimalist individuality.
The first half of the 20th century was the scientific management age. Working life and enterprise was dominated by the assembly line and systematisers like Frederick Taylor, who introduced discipline and task analysis to “previously ad-hoc” operations. Schools of business, like Harvard, appeared and in 1922 Harvard began publishing the Harvard Business Review, magazine committed to publishing the new genre of academic management literature. The first comprehensive account of executive management was written in 1916 by Frenchman, Henri Fayol. But, according to HBR, “Taylor’s influence was so great” that it took several decades before the Frenchman’s ideas on formal management responsibilities became widely known.
The 1930s’ depression and its ultimate solution, increased government regulation, changed the marketplace and, before long, the managers’ world. America’s New Deal and Europe’s Welfare State emerged. Unions challenged management control while some American business writers argued that stockholders had lost influence over their managers. By war’s end the first age of managers was over, though good many old practices remain.

Post-war management
“We have been told for years that we are moving away from hierarchical organisations and command-and-control structures,” says Auckland-based knowledge management consultant and author Carl Davidson. “Everywhere I work I still see hierarchical organisations and command-and-control structures.”
After 1945 marketing and diversification took hold. decade later and just as this magazine hit the desks of Kiwi managers, Drucker wrote his Practice of Management – comprehensive guide that emphasised management objectives rather than social relations. America’s W Edwards Deming, neglected prophet in his homeland, began converting war-spawned Japanese industries to his teachings on “quality management”. And the surge in corporate growth and confidence – particularly in America – took off and continued unabated for the rest of the century, increasingly assisted by at first fledgling, then soaring information technology industry.
The New Zealand Institute of Management was formed in 1945. It was, says former NZIM national president Doug Matheson, response to understanding the importance of “training for supervisors and managers”. New Zealand industry realised that managers “needed to be trained in the knowledge and skills of management. Employers recognised that good managers make difference.”
Drucker called managers “… the dynamic, life-giving element of every business”. Without manager’s leadership the resources of production remain just that – resources that “never become production”. Managers determine the success and the survival of business. “The quality and performance of its managers is the only effective advantage an enterprise in competitive economy can have,” Drucker wrote in the introduction to his Practice of Management.
In the early 1960s, Douglas McGregor advanced his “Theory Y” to challenge command-and-control orthodoxies, advocating “softer style” of management or, as Auckland management consultant Peter Senior puts it; “identified that people can be more productive as well as innovative if they are treated as intelligent human beings rather than automatons”. The fact that people respond better to motivation and inspiration was, it seems, lost sight of during and well after the Industrial Revolution.
The ’60s witnessed the up-welling of what became an unrelenting stream of management literature. Super managers like General Motors’ Alfred P Sloan, credited with u-turning the moribund motor company in just three years, recounted their exploits in books like My Years with General Motors, classic on how to apply the principles of total marketing and decentralisation.
“Books like this influenced top management in New Zealand,” says Matheson. “There were successes and there were failures and the lessons of strategic leadership rather than management fad were learned,” he adds.

Fad fanatics?
So were, and are, Kiwi managers susceptible to management fads? Do they differentiate between practical management solutions and cleverly marketed theories?
NZIM National chief executive David Chapman thinks we are inclined to “pick up on management fads” without question. As small country with limited resources we frequently scan the horizon for the “quick fix”. On the other hand, “we also drop them very quickly if they don’t work or we don’t like them”, he adds.
Carl Davidson suspects our implanted “cultural cringe” is at the heart of tendency to “look offshore” for management advice and thinking. For instance, we like working with major international consultancy groups even though they “simply give us recycled ideas”. “We seem to want their status and so yes, I think we are susceptible to fad management,” he concedes.
Dennis Orme, armed with generation of senior level management experience in both New Zealand and the United States, believes we “undervalue our management expertise” and “rely too heavily on overseas experts”. While on the one hand “we are too quick to adopt recommendations from overseas experts” we are, on the other hand, “slow to adopt new management practices”, he says. “When I compare adoption of management practices in New Zealand with the US, then our uptake is considerably slower.”
Matheson sees it slightly differently again. He doesn’t think we are fad fanatics. We are, he says, keen to understand many new management approaches but we do not “exploit or become totally committed” to them. “We tend to readily adopt innovative management practices [such as performance excellence] but then seem to be satisfied with level of mediocrity rather than continuing to achieve the [full] potential of being world class,” he adds pointing to the 1991 findings of Harvard’s Michael Porter.
Competitive strategy guru Porter – with both government and industry backing – wrote the book Upgrading New Zealand’s Competitive Advantage and found that because of “New Zealand’s long period of protectionism, there is tendency for New Zealand businesses to be administered rather than led. Managing within existing constraints has produced management culture that is neither used to building, nor equipped to build, new advantages on continual basis. Overcoming the tendency simply to administer and preserve the present business will require the creation of new management philosophy in New Zealand business.”

The quality management doctrine
The Kiwi manager’s tendency to settle for less than the best, also s

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