Business leaders had long complained about Prime Minister Robert Muldoon’s Canute-like approach to economic management, but Labour’s tidal wave of restructuring had them spluttering in different way.
The concerns were mirrored in Management articles about how to survive GST “arguably the most revolutionary tax change in New Zealand’s history”, whether or not Fringe Benefit Tax would “sound the death knell for executive perks” and, in March 1986, Louise Callan’s story was entitled: ‘Twenty months of Roger Douglas: things aren’t what they used to be’. She wrote: “In the 20 months since the snap election Douglas, as head of the economic troika, has been unravelling and dismantling the old economic systems. The speed with which they moved to implement those changes, to lay the cornerstones to Douglas’ strategies, amazed most people.” By August 1987 Management was able to report that the Fringe Benefit Tax had not dented the provision of perks: “FBT returns for the 1986/87 year indicate that even more and bigger company cars are taking to the roads.”
The Government’s corporatisation of the public sector meant radical philosophical and operational shifts for senior public servants. As State Services Commission (SSC) head Dr Mervyn Probine said: “The concept of administration is being replaced by that of management.” This in turn meant the SSC and Treasury delegating authority so managers could manage. “We cannot make people accountable if they are not making decisions,” said Probine.
By the end of 1986 NZIM’s Top Management seminar was struggling with the early effects of ‘Rogernomics’. NZIM president Tony Hassed posed managers with conundrum: “What do you do with loyal, hard-working employees whose background, training, or lack of training, renders them unsuitable for continued employment in the organisation because of the effect of deregulation?” There was no easy answer then or later.
Around the world, business leadership was the focus of considerable attention during period of hostile takeovers and leveraged buyouts which, in New Zealand, created posse of corporate cowboys who briefly caught the imagination of the share buying public and the media. In climate of excessive borrowing and lending, there were signs of widening pay gap between senior executives and other employees. Then, with the surge in takeovers and redundancies, ‘golden parachutes’ become part of the business lexicon. “Chief executives are the most vulnerable in takeover,” Colleen Hawkes wrote in March 1988. “With many annual salaries now above $100,000, golden handshake is likely to be in that vicinity.”
Management was caught up in the excitement of takeover mania. Selwyn Parker wrote: “Though threatened management may disagree, takeovers are good for us. They push up the share price in the target company, spread wealth more widely, inject innovation into hidebound companies, force management to perform and tease more information into the marketplace.” In 1986 New Zealand’s takeover legislation was toothless. As only takeovers in writing were under any scrutiny, corporate raiders practised with impunity what Securities Commission chairman Colin Patterson wryly termed “takeover by word of mouth”.
With In Search of Excellence, Peters and Waterman opened the ‘corporate culture’ floodgates, emphasising the visionary, inspirational aspects that mark the difference between the average and the excellent. In Management’s October 1985 issue, Nick Marsh and Mike Beardsmore underlined the importance of ‘corporate culture’ as: ” … pattern of values, beliefs, attitudes and behaviours which permeates any organisation and governs everything from strategy decisions to office layout.” It was lode of management thinking mined assiduously by Management writers for the rest of the decade.
New Zealanders take to new ideas, whether new technology or business theories, with enthusiasm. Michael Porter’s Competitive Advantage, published in 1985, brought strategic planning back into favour with new ‘sustainable competitive advantage’ twist that gave welcome sense of direction as New Zealand political and business leaders coped with the consequences of relentless restructuring and change. Even so, Porter, writing in Management in 1987, was somewhat defensive. “The ascendance of Japanese companies was seen as evidence that American management techniques, notably strategic planning, were failure. Japanese companies concentrated on quality productivity and teamwork, not, it seemed fancy planning techniques… Corporate culture also emerged as new theme, popularised in part by the runaway success of In Search of Excellence. Companies lavished attention on the ‘soft’ side of management. Next came the love affair with entrepreneurship and entrepreneurs clearly did not need to fill out strategic plans – one more reason to dismiss planning.”
Business leadership, or the lack of it, was regularly analysed, debated and philosophised about in Management. Colin Marshall, enlightened CEO of British Airways, wrote, when he visited New Zealand in late 1985: “What counts are actions: series of acts which cause those working with and for you to believe that you are, first and foremost, concerned about them and their needs. Given this, all else follows.” But the reality was often very different.
Management, in true monthly magazine manner, took medium to long term view of the world and was hardly at all diverted by the stock market which, artificially inflated by wildly optimistic asset revaluations, crashed spectacularly on October 20, 1987. Diligent research in the months afterwards failed to find single mention of this traumatic event until an article in May 1988, about the Justice Department’s corporate fraud unit, forerunner to the Serious Fraud Office, quoted head Ian Ramsay on the repercussions of the crash. “There’s lot of stuff coming out of the woodwork on publicly listed companies: statements to the Stock Exchange that were not correct; company financial status not being quite what it was made out to be. There’s hell of lot of mopping up to do there.”
Meanwhile, accountancy firms were busy diversifying in ways that were to have later repercussions. As Management article noted: “Deregulation has encouraged their firms to become financial services conglomerates, offering advice on everything from marketing to merchant banking. In doing so, they are crossing the traditional boundaries between client and accountant, and raising fears about conflicts of interest.” list of the world’s eight leading accounting firms in 1986 read: Arthur Andersen, Peat Marwick Mitchell, Ernst & Whinney, Coopers & Lybrand, Price Waterhouse, Arthur Young, Touche Ross, Deloitte Haskins & Sells, Laventhol & Horwarth, and KMG Main Hurdman. Time does not stand still.
There was steady stream of articles about management teamwork and non-hierarchical organisations but they did not, as might have been hoped, make it any easier for women to break into the executive ranks. Louise Callan reported, in October 1987, that while 40 percent of the public service workforce were women, only 150 earned over $50,000. Overall, the percentage of women in administrative and managerial ranks was half that of Australia and even further behind compared with the United States and Britain.
Top managers now needed to be marketing generalists with focus on long-term strategy, Tony Eden told readers in 1987. “It is okay for line staff to be up to their armpits in alligators provided the chief executive appears (when need be) to remind them they are not in the alligator-skin-handbag business,” he wrote, “but their objective is to turn swamp into farmland by correct drainpipe laying.”
In July 1987, Management acknowledged new marketing phenomenon that “very few business concerns in New Zealand are taking notice of”. Wendy Laurenson wrote: “They may not set creative directors alight with excitement, but New Zealand’s silver-haired consumers are becoming an
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New climate impact monitor launched
A new online climate impact monitor aims to demystify the action – or inaction – of Aotearoa New Zealand’s top carbon emitters. Climate Action Tracker Aotearoa (CATA) independently analyses company