MANAGEMENT HISTORY Last Gasp ’90s – A new age but old issues

At the beginning of the 1990s, with the world suddenly ‘freer’ than it had ever been, there was also recession deep enough to curb any thought of celebration. The Cold War might be over, globalisation had taken hold, and the unlikeliest economies were liberalising – but everywhere there was talk of restructuring, downsizing, and flatter corporate structures.
Management’s May 1991 cover spelt out, in as many words, the situation in New Zealand: “The nation is in crisis. high external deficit, stalled growth and chronic unemployment have buried early chances of shaking off recession. Is continuing pain the price of economic mis-management?”
One company was bullish, even in the depths of the recession. In an admiring 1990 article about the rise and rise of Fletcher Challenge – New Zealand’s biggest company and in the world top 200 league – chief executive Hugh Fletcher saw ‘offshore’ acquisition forays as the secret of its success. “What going international has done is boost the group’s immunity to economic chills by spreading the investment risk across industry, geographic and currency boundaries, as well as providing improved access to international debt and equity markets,” the article intoned.
By June 1992 interest rates and inflation were down and exports and the trade surplus up, and concern shifted to whether the Employment Contracts Act, introduced the previous May, had been better or worse than the dire predictions.
A number of new words and expressions flitted through the pages of Management; some were passing fancies while others made it into dictionaries. selection: benchmarking, ISO standards, teleworking, outsourcing, process re-engineering, supply chain management, integrated database systems, corporate governance. Financial products were beginning to be mass marketed for the first time. And the world watched in wonder as Silicon Valley gave new meaning to venture capitalism’s possibilities.
Publishers might have mined profitable lode with books promoting the latest management theory, but by the early 1990s there was evidence of some battle fatigue. Malcolm Lewis, senior lecturer in management at the University of Otago, was highly critical of “management by bestseller”. He said: “Just-in-time management, management by walking around, management by this, management by that – they’re all high-profile, simplistic, caption-orientated methods with no wisdom.” The underlying difficulty, Lewis claimed, was that management bestsellers focused on business success stories but distorted the factors underpinning success, and failed to provide the full picture.
There might have been disagreement about how simplistic the views were in the Michael Porter-driven report ‘Upgrading New Zealand’s Competitive Advantage’, published in 1991, but it did not mince words about the state of management in the country. “Success in international competition will require new breed of managers.” Too many managers had an accountancy background: “Accounting is discipline more suited to administration than to the creation of new products or marketing concept.”
Management continued to lament the lack of corporate leadership. Tony Hassed wrote in September 1992: “To find real business leader in New Zealand you have to search under every rock in the management pool.”
Some of those Management did salute turned out to have feet of clay. Business magazines are no more prescient than anything else. Graeme Thompson, CEO of Fortex accepted the Company of the Year Award in 1990; the company went into receivership in 1994 and he was jailed for fraud two years later. respectful article about Jeff Chapman, in August 1991, predicted him moving on: “Jeff Chapman is almost ready to quit as managing director of the Accident Compensation Corporation, not because he’s quitter. But because he believes that after six or seven years on the job chief executives should take their ideas and experiences elsewhere.” He did, becoming auditor-general, and was later convicted on numerous counts of fraud committed at both the ACC and Audit Office. Kerry Hoggard, then CEO of Fernz Corporation, was Management’s Executive of the Year in 1993; he resigned as chairman of Fletcher Challenge when his insider trading activities were uncovered in late 1999. Donna Awatere, as she was in 1990, explained that, “in the workplace, motivation based purely on individual reward can actually be counterproductive where Maori are concerned because the individual is reluctant to accept something at the expense of the hapu”. Her bicultural management consultancy, IHI Communications, was sharing such insights with growing number of corporate clients.
In the early 1990s, Management took an increasing interest in business ethics and in the gradual ‘greening’ of business. major six-part ethics series in 1990/91, began with this: “In the 1980s successful entrepreneurs and executive dealmakers became media stars and the companies they managed glamour vehicles. That image is now tarnishing as business leaders become aware of widespread distaste for the way corporates, the dominant institutions of our era, have abused their power. The forces motivating them and pervading much of the wider community, were self-interest, short-term advantage and greed. In the absence of any generally accepted alternative, money became the religion of the decade.”
And in 1990 Management warned: “The green decade dawned in 1990, but New Zealanders are sleeping late. Conservational complacency has produced lethargic response to the early-warning ripples from the green wave sweeping the Northern Hemisphere.” In May 1994, Anna Smith was able to report: “Two years ago most companies wouldn’t even have understood the question, according to environmentalists. Now… they are doing something to manage their impact on the environment. On scale of pale apple to deep forest green, manufacturers emerged from recent study reasonably solid hue of apple.”
Middle managers were disappearing at an increasingly rapid rate, as the need to supervise and manually manipulate information lessened, and the title ‘manager’ was under threat as well. Vaughan Yarwood, editor of Management since September 1990, wrote in ‘Tomorrow’s Workplace’ piece at the end of 1992: “The very term ‘manager’ is beginning to disappear in the United States, to be replaced by ‘team leaders’, ‘project heads’ or more often ‘executives’. Such people will increasingly face tenures of appointment and jobs tied to specific tasks or roles without the guarantee of promotion.”
The marketing discipline and the managers who practised it were now firmly ensconced in management structures. In the early 1990s, they began to head for the boardroom. In 1991 more than 300 commerce students graduated from New Zealand universities with marketing as major.
They were once ‘personnel officers’, but by the early 1990s human resource managers also had more corporate clout. “Although corporate restructuring and downsizing have enhanced efficiency, the scope for further gains from this source is limited,” wrote assistant editor Michael Pearson, explaining HR managers’ growing status and importance. “The next wave of productivity improvement will rely on creating more effective and productive workforce.”
As women began to fill more senior management positions, daycare facilities became corporate problem. Vicki Jayne wrote in March 1990: “One high-profile working mother bluntly states that an EEO [equal employment opportunity] policy that does not go hand in hand with the provision of quality childcare is farce. Air New Zealand’s media relations head, Avon Adams, shells out more than $20,000 year to ensure her two young children are well cared for in their own home while she’s at work. She is aware this is not an option for many working mothers, maintaining that currently childcare provisions discriminate against lower-income workers.”
The response of more women managers was to delay or permanently put o