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153 Seiten, Note: 1,3
II. Range and Complexity
III. ‘Good management’ in theory
IV. ‘Good management’ in context
Initially, the above quotation had left me as a business management student rather devastated. If the field of management was too demanding and too complex to cope with, where was the point in studying management at all? However, deconstructing the quote, analyzing its underlying assumptions and inferring its implications lead to more constructive thoughts about four core aspects of management:
(1) Stakeholder conflict – reflected in the broad range of demands
(2) Ethical dilemmas – “good” refers to reconciliation of stakeholders’ legitimate interests with ethical behaviour.
(3) Complexity reduction – how can managers reduce complexity to manageable chunks, without compromising truth and validity?
(4) Contextual dependency – Context matters in terms of time, culture, organization, etc.
My discussion centres around the argument that there were generally agreed answers in the air before the series of prominent management failures such as Enron, HypoRealEstate, Schlecker and others, often in the form of one-fits-all recipes. Today, managers have to find less straight-forward answers. Fortunately, well-developed theories and frameworks can help them do so even if these models are not answers in themselves.
Economic globalization, diminished product life-cycles, technological revolution, and information overload feature contemporary discussions. But is there a nexus between this complex reality and the existence of an answer to what makes a good manager?
The statement on the title page assumes that managers must respond to the full range of situations and demands which they face. Clearly, if the multiplicities of claims placed on managers were all equal weighed managers would inevitably find themselves in a lose-lose-situation. However, stakeholders and their demands can be categorized, evaluated and ranked. Demands can be compared in terms of their urgency, legitimacy, and power (Mitchell et al. 1997). Hill and Jones (1992, p.133) acknowledge that stakeholders differ with respect to the size of their stake in the firm. Others have argued that it was management’s sole responsibility to create as much return on investment for shareholders as they possibly can. The ‘invisible hand’ of the market would then provide for the most efficient allocation of resources and society as a whole would be better off in the long run (Friedman 1977). Although neither of these ideas has yet emerged as a generally agreed model of reality, all challenge the underlying assumption that managers cannot possibly cope with demands placed upon them.
The inherent verdict that there never will be a generally agreed answer underlies the assumption that multiplicity and complexity are persistent attributes of managerial reality. However, one effect of globalization, nicely captured in the term ‘global village’, is the levelling of barriers, be it tariffs or even cultural differences: “What, after all, is globalization – so fashionable in the world of the MBA - but a paving over of cultural differences in favour of some international standard” (Mintzberg 2005, p.245). As markets continue to integrate across geographical or cultural boundaries, so demands on companies and their managers become alike. Management research has reacted and developed models for the successful transnational organisation (Bartlett et al. 2004). Recognizing “increasingly sophisticated customer demands” and “ever increasing pace of globalization of markets and the rising cost, complexity and convergence of technologies” (2004, p.409), the proposed model for the new organization focuses on the role of management and how managers have to reinterpret their role: From implementers to entrepreneurs (front-line), from administrative controllers to inspiring coaches (middle-managers), and from resource allocators to institutional leaders (CEOs). In its normative claim the model recognizes no reservations, thereby qualifying the statement.
The statement’s conclusion is based on the assumption that general principles for ‘good management’ do not exist. However, ethical codes that haven’t changed for more than 2000 years such as ‘the golden rule’ have been guiding not only managers ever since. Ethical principles are per definitionem universal measures that have been agreed to govern human behaviour in any imaginable context and do not differ between people unlike moral standards and value judgements (Harris & Lawton 2007, p.9).
According to Hosmer (1994) stakeholder conflict and trade-offs between their interests are inevitable. He concludes that the firm that applies ethical considerations in their strategic planning process would be better off in the long run because of what he termed the “ethics-trust-commitments-effort sequence” (1994, p.20, see figure 1). To discard any moral or ethical concerns might have been the most severe flaw of the paradigm that dominated management thinking and education until recently. Seen from that perspective, the statement reflects a step forward.