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Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance (Economic Controversies)

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Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance (Economic Controversies)

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    Available in PDF Format | Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance (Economic Controversies).pdf | English
    J.-C. Spender(Author)
Confronting Managerialism offers a scathing critique of the influence of neoclassical economics and modern finance on business school teaching and management practice. Locke and Spender show that responsible management has given way to ‘managerialism’, whereby an elite caste of businessmen disconnected from any ethical considerations call the shots. The book traces the loss of managers’ earlier social concerns, amply encouraged by management education’s transformation since the 1960's, especially in the US. It also questions not only the social ethics of the US management caste but its management efficacy compared to systems of management that are highly employee participatory and dependent, such as in Germany and Japan. A unique, topical and controversial look at a subject that impacts us all.

'Everyone should read this book to see what is so wrong with finance capitalism U.S.-style. The book's expose of bad "management philosophy from hell" carries one forward like an adventure story as it describes the academic and global diplomacy whose infighting has spread it. Most important is the authors' conclusion that it doesn't have to be this way!' Michael Hudson, author of 'Super Imperialism' 'Timely... Incisive... and right on target. The authors mount a fierce attack on "managerialism" and the business schools that promote it. The book should leave the professors, the deans, and the CEOs at prominent U.S. businesses nervously looking over their shoulders at the global competition.' Louis Galambos, The Institute for Applied Economics, Global Health, and the Study of Business Enterprise, Johns Hopkins University 'In this fascinating book Locke and Spender show us what is wrong with managerialism and what might be done to ensure more participative and long term approach to running organizations.' Martin Parker, Warwick University Business School, and author of 'Against Management' 'Business Schools are one of the most important institutions of our times; managerialism perhaps the dominant ideology of those times. How strange, then, that the relationship between the two has not been exposed to much serious analysis. In this excellent volume, Locke and Spender do just that and through a combination of historical and comparative international analysis explain the complex and often malign enmeshment of business schools with modern society. Written by acknowledged experts in the area, this is an important book for those who work in business schools; but an even more important book for those who don't and will be informed, astounded or perhaps appalled to discover what goes on within them.' Christopher Grey - Professor of Organizational Behaviour, Warwick Business School, University of Warwick and Visiting Fellow, Judge Business School, University of Cambridge 'In a brilliant and compelling narrative, Locke and Spender trace the decline of American business after World War II to the extinction of socially-responsible management by an amoral 'managerialist' caste of professional business school graduates trained to view reality through arcane mathematical tools of abstract decision making, not through the lens of concrete relationships linking humans to each other and to the planet they inhabit. This is a truly important book . . . definitely a must read.' H. Thomas Johnson, Professor of Sustainability Management, Portland State University

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Book details

  • PDF | 240 pages
  • J.-C. Spender(Author)
  • Zed Books; 1 edition (8 Sept. 2011)
  • English
  • 3
  • Business, Finance & Law

Review Text

  • By Diz on 26 November 2011

    We all know that in the last 30 years or so that the rich have got richer and the poor have borrowed. We know too that manufacturing in the US and the UK has drastically declined over this same period and that we are in the midst of an economic crisis the likes of which has not been seen since the 1930s. It is clearly the case that the neoliberal economic model is a major contributor to the current woes. But what has sustained this model even in the face of growing evidence that it not only wrecks societies but does not even live up to its own pronouncements? In this book, Locke and Spender go a long way to providing answers. And those answers in turn point to alternatives.'Managerialism', suggest the authors, really got going after World War 2. 'Operational Research' was developed during the war as a way of:'solv[ing] unprecedented strategic planning, logistics, and operational problems that could not be dealt with by the methods governments and military bureaucrats had hitherto employed. Operational Research (OR) projects drew on statistical and mathematically informed techniques...that were particularly suitable to maximising efficiency in large-scale military operations.' (P11)Such statistical analysis and mathematical modelling clearly has a role to play in manufacturing, particularly in, for example, the car industry. It developed as a management tool. But during its development it 'morphed' into 'managerialism':'Managerialism as opposed to management means "a vast array of customs, interests, prestige, actions, and thought" associated with but nonetheless transcending the need for the efficient running of commercial and industrial organisations.' (P18)This move from 'management' to 'managerialism' led to the formation of a self-interested 'management caste' that became increasingly detached from the actual businesses of the enterprises that they supposedly managed. At the same time, the use of mathematical modelling, statistical analysis and other 'scientific' tools made management into an academic discipline which in turn enhanced the status of the management caste. The management caste thus became increasingly detached from the actual businesses of the companies they ran.Meanwhile, Milton Friedman was further developing neoliberal economic theory. Hayek's original idea that competition would safeguard individual liberty and consumer choice was replaced by, as Colin Crouch put it in his recent book,:'the dominance of giant corporations and the replacement of the demotic idea of consumer choice by a paternalistic concern for 'consumer welfare'' (P16-17 'The Strange Non-Death of Neo-Liberalism.')This effectively legitimises the 'Greed is Good' credo of the 1980s. The managerial caste is freed of any social responsibility as the pure pursuit of profit will, like the incoming tide, 'raise all boats'. Of course, it does no such thing.It turns out that the managerial caste is not even particularly entrepreneurial. They had, for example, no hand in the development of Silicon Valley, which was largely based on technologies developed during and because of the Cold War.And then there is the example of the US car industry. A classic top-down management structure that simply could not cope with the Japanese incursion. The Japanese management philosophy is fundamentally different. While General Motors' philosophy might be summarised as 'We don't make cars, we make money' (Alfred P Sloan, Jr., President of GM 1923-37, quoted on P112), the Japanese were intent on making the best cars for the money that they could. 'Total Quality Management' (TQM), the 'Toyota Production System' (TPS) demanded that the companies be run by people who actually knew about making cars. Instead of an insulated, 'scientific' and academic management divorced from the actual business product, here the business IS the product. Reminiscent, perhaps in more ways than one, of 'Zen and the Art of Motorcycle Maintenance'.The Germans were also threatened by the burgeoning Japanese car industry. But their response emphasises yet again the failure of managerialism. Whereas the US/UK management model is, as has already been indicated, 'top-down' or pyramidal (with more or less inevitable conflict between management and workers), the Germans put in place 'Codetermination' laws:'Codetermination laws legally entwined employee representatives and management in German firms, and after a two-decade educational effort homogenised behaviour and knowledge. In the US, management not only excludes labour from a firm's governance but the two groups constitute distinct cultures in American life.' (P129)Still, managerialism was not dead yet. It really got going when it moved into the financial sector. Here, reliance on mathematical modelling and the amoral disregard for the material realities of this 'meta-business' (i.e. the business of business) were, indeed are, at their clearest. Rampant short-termism, the determination to keep the share price as high as possible, even at the cost of future R&D and company pension funds, has nothing to do with developing sustainable businesses that benefit all stakeholders. Quantitative analysts, or 'quants', developed the exotic, and fundamentally flawed, financial instruments that finally led to the current malaise. It seems now, looking back, to be an inevitable outcome of the rise of the management caste. And it's not over yet.Finally, the authors put forward some suggestions for the future. As they rightly point out, we have been threatened and blackmailed for too long by T.I.N.A. - neoliberal capitalism has been compared to a failed socialism and we have been repeatedly told that There Is No Alternative. We've been here before. From Dani Rodrik's suggestion that governments finally exert some control, to Colin Crouch's support for extra-governmental pressure groups and Jeffrey Sach's faith in the Millennium Generation, we've seen a range of proposals. But Locke's and Spender's are different again.'Management...has been and is far too important to be left to business schools or a management caste, especially since in America they both have renounced any sense of responsibility towards the life of the community or towards promoting the sustainability of the firm on whose existence the community depends.' (P184)The authors recognise that the management caste is not going to give up its privileges easily and that '[n]ot much reform can be expected either from the political side of the American ledger' (P188), which tallies exactly with Jeffrey Sach's analysis. The choice is not simply between neoliberalism and socialism - that is a false and misleading dichotomy. Instead the challenge, the authors suggest, is to develop 'an internationally regulated form of dynamic capitalism in which firms are more efficient because of participative management, and the markets function better because of a more equitable distribution of wealth in society.' (P192)A very interesting and rewarding read.

  • By Lyaeus on 20 September 2011

    This is the best - and by far most profound - business book I've read this year. In fact, for many a year. Amidst all the finger pointing at bankers and politicians that has taken place following the global crisis, no one - until now - has gone to the source: and no it's not Wall Street. Wall Street boardrooms are the end point, where those trained and some might say brainwashed into believing greed is good (for them) ended up.Where they came from, how they go there - worse - how they came to believe in the math based cult of managerialism in the first place that got us all into this mess - is the real problem here. And that source, as this book brilliantly exposes with an almost thriller like pace, can be traced back to the post WW2 rise of a handful of `elite' US business schools and their legions of morally bankrupt MBA students, on whose collective and some would rightly argue corrupt watch the blame now shifts.Of course, I do the book a great disservice here. The case Locke and Spender make is much richer than I can report in a review. The book looks globally, focusing on the impact of MBA education in Silicon Valley and the US automobile industry for example, while at the same time shedding light on the global political, historical and educational developments in South America and China and Europe that have also had to counter and deal with the US (and UK) banking system and the `managerialist' export that came bubble wrapped around it. In doing so, it challenges us to radically rethink the options available and the kind of educational system we want to create. If comparisons have recently been made in the UK between the morality, or lack of, of bankers, politicians and vandals, one could say going to the source, where their values and sense of community were eroded might not be a bad thing.Like I said, this book is both a fascinating and fast paced ride. But it also teaches you something. It offers answers and ways forward out of this mess. I for one hope those answers are taught early enough for the next generation not to make the same mistakes.

  • By Dave Taylor on 4 June 2014

    In the contexts of Manchester's widely-read PCES report 'Economics, Education and Unlearning' and Cambridge professor Tony Lawson's 'Economics and Reality' and 'Reorienting Economics', this critique of the origins and failings of American managerialism, by an American historian in a position to contrast it with German and Asian practice, can be considered essential reading. By managerialism your reviewer, an elderly British scientist once subjected to it, understands the godless Divine Right of Kings re-imposed by Mrs Thatcher in the form of "the right of a manager to manage". The question is, whether management (and in particular, management of the economy) is about men or marbles, mathematical variables or numbers, command or facilitation, Hobbes's Leviathan or Christian public service. Locke and Spender explore it through the naive mathematization of management science, its subsequent failure in business, its loss of control by failing to recognise its "moral compass", the practical example of the US automobile industry, the catastrophic coming together of these in the great financial crash, and a review of the options still open to us. If they lump together humbly contrite catholic Christians and self-satisfied, exultant evangelicals when making ethical comparison with other faiths, and (in sticking to their theme) miss opportunities to refer to other histories documenting the key practical issues of Money as Debt and covert political control of the economy via usurious Reserve Banking, this does not invalidate the significance of what they have said. Curriculum reformers are already confronting managerialism, but awareness that management involves philosophical and methodological as well as factual choices needs to be built into curricula if students of business and economics are not to make the same mistakes their professors have done.

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