Tag Archives: management

The Dark Side of Business Management

darksideMy colleague Emmanuel Raufflet has co-edited an timely new management book, The Dark Side: Critical Cases on the Downside of Business. The press release describes the book:

The discredit of a certain brand of capitalism – and the managers that practice it – continues apace. The increasing lack of tolerance for short-term thinking and a systematic neglect of the social, regulatory, and economic conditions in which business ought to operate means we are entering a time of trouble and questions – an era of economic, social, and environmental turbulence.

There is a critical need for business educators and trainers to expose students and managers to these issues to examine, explore, and understand the different multifaceted, complex phenomena of our late capitalist era. There is also a need to foster a climate for future and current business managers to reflect, feel, and think differently both ethically and cognitively. The 16 innovative case studies in The Dark Side: Critical Cases on the Downside of Business are designed for this very purpose: to provoke reflection and debate; to challenge and change perceptions; and to create responsible managers.

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The financial crisis as a failure of management

Henry Mintzberg, professor of management studies at McGill University, writing on America’s monumental failure of management in the Toronto Globe and Mail:

What we have is a government that palliates: It provides geriatric medicine to its oldest, sickest enterprises in a country that requires pediatric and obstetric medicine for its young and vibrant enterprises, the ones that create the jobs, not eliminate them.

We hear now about “too big to fail.” “Too big to succeed” is more like it. General Motors has been going slowly and painfully bankrupt for decades, managerially as well as financially. The new money will only put off its demise. Americans will have to face this reality sooner or later.

From where I sit, management education appears to be a significant part of this problem. For years, the business schools have been promoting an excessively analytical, detached style of management that has been dragging down organizations.

Every decade, American business schools have been graduating more than a million MBAs, most of whom believe that, because they sat still for a couple of years, they are ready to manage anything. In fact, they have been prepared to manage nothing.

Management is a practice, learned in context. No manager, let alone leader, has ever been created in a classroom. Programs that claim to do so promote hubris instead. And that has been carried from the business schools into corporate America on a massive scale.

Harvard Business School, according to its MBA website, is “focused on one purpose – developing leaders.” At Harvard, you become such a leader by reading hundreds of brief case studies, each the day before you or your colleagues are called on to pronounce on what that company should do. Yesterday, you knew nothing about Acme Inc.; today, you’re pretending to decide its future. What kind of leader does that create?

Harvard prides itself on how many of its graduates make it to the executive suites. Learning how to present arguments in a classroom certainly helps. But how do these people perform once they get to those suites? Harvard does not ask. So we took a look.

Joseph Lampel and I found a list of Harvard Business School superstars, published in a 1990 book by a long-term insider. We tracked the performance of the 19 corporate chief executives on that list, many of them famous, across more than a decade. Ten were outright failures (the company went bankrupt, the CEO was fired, a major merger backfired etc.); another four had questionable records at best. Five out of the 19 seemed to do fine. These figures, limited as they were, sounded pretty damning. (When we published our results, there was nary a peep. No one really cared.)

How much discussion has there been at Harvard about the role it might have played in forming the management styles of graduates who, over the past eight years, have been running America and what used to be its largest company? The school is now reviewing its MBA program, but the dean has made it clear that questioning the case-study method will not be on the agenda.

In this, we have America’s problem in a nutshell: the utter absence of collective introspection, whether it be the current crisis, the relationship between the Vietnam and Iraq debacles, even what might have contributed to 9/11, as well as the way it has been compensating and educating its corporate “leaders.” The country seems incapable of learning from its own mistakes.

Put differently, the U.S. appears to be in social gridlock. Thanks to vested interests and their powerful lobbyists, as well as an economic, individualistic dogma that has been embraced so thoughtlessly, it is business as usual in America. And beyond: Our planet is becoming as sick as many of these corporations, yet we are being implored to get back to consumption. Fix the problem now; continue to forget about the future. Except this time, we may be consuming ourselves.

No country in the world has been more admired for its capacity to change, to learn with the times. This remains true of technological change; but, on the social front, America seems incapable of changing.