The Management Myth

Today's Wall Street Journal carries an interesting article by Philip Broughton, who writes about Matthew Stewart's book "The Management Myth." It discusses some first principles in thinking about corporations and the values that sustain the American model. We've written about these issues before, using the work of Professor Rakesh Khurana of the Harvard Business School.

Stewart approaches the issue by looking at the consulting business and how it operates within the largest American corporations. He notes that work of these consultants--you know the names-- are "built on a science of management that is both narrow minded and intellectually bogus." The skeleton of modern consulting practice evolved from the early work of "efficiency experts," and like a comet's tail, picked up material as it moved through time from economics, organizational theory, computer systems, pop psychology, and marketing. We've even picked up an odd label or two from genetics, when we speak about "growth being built into the corporate DNA." Now, that is real blather, but you hear it on almost every other corporate earnings call.

Stewart also talks about the corporation as being "obsessed with its own perverse value system and view of human nature.." Corporations are torn between presenting themselves as "environments" where people can realize their aspirations and contribute to some high-faluting corporate goal, or as "black boxes" devoted to growing earnings at 15% a year come hell or high water. Both kinds of entities wind up having cultures or value systems, but in the case of public companies rarely does anyone know where these came from. Apple for example started in a garage with the legend of Wozniak and Jobs, and somehow whatever drove that original culture is supposed to be continued into the papacy of Jobs. It really makes no sense. The American corporate view of human nature is still overwhelmingly Theory X, which everyone publicly repudiates but lives with every day.

Larger private corporations, where representatives of the founders are still active, seem to do a better job of articulating a value system with continuity that evolves into a culture that mirrors the value system. The changeover of corporate management in public companies makes it hard to accomplish the same continuity.

I've counseled some of my very talented financial staff not to shortchange themselves by going into MBA programs in finance. They were more than capable of absorbing all the rote technical material on their own. They owed it to themselves to learn much more about foreign languages, culture, philosophy, anthropology and economics. One of them solved the dilemma by going to business school in India from Minnesota! I'm anxious to see how it turns out. We should be educating our future business leaders much more through what's called the Core Curriculum at Columbia, or the classics at Chicago. More Plato, Seneca, and Montaigne and less Porter, Black-Scholes, and Merton.