Managerialism, an old battle with many similarities with Network Centric Management today

You should read this article « Managerialism and the demise of the Big Three »

by Robert R Locke [Emeritus, University of Hawaii, USA and a specialist of the history of management sciences]. It was published in December 2009 in the real-world economics review, issue no. 51.

This article is relatively long and difficult to read. Too bad if you only read one screen page articles, you will miss it. Now; if you are interested in the history of management and in what kind of lessons history tells us today, it is a jewel.

Robert Locke has been writing extensively on management practices, namely comparing the US and Japanese management systems. This article summarizes his view on why the Big Three lost their battle against the Japanese because they were unable to apply the Japanese rigorous but specific production management techniques.

One of the main reasons is what Robert calls (and denounces) managerialism, i.e. the management by the hierarchy, and in particular by the class of « managers », as opposed to the collective and community like management of Japanese companies. Now you know why I see this article as a jewel! A striking parallel can be done today with what will happen to those companies that will be able to switch to a more collaborative management and those who will stay with a hierarchical one.

When you read this article just put your brain in a parallel processing mode and while you read about the American and the Japanese organizations in the manufacturing industry, just think of the contemporary challenge we are facing if we accept that networks will drastically change our management models. You will see why the emergence of the multidivisional firm actually led to the possibility of managing large groups but also to the hubris of a few managers who saw their coordination role as the real core value of the group. I let you get glimpses of the analogies.

Locke insists on an old concept incredibly contemporary: the one of a culture of flows versus a culture of structures as elements of management (see page 31 32), an important point because today’s organization has to become nothing else than a series of flows and connections. It has to include some regulation and governance (as with the commons or as in any system with collective responsibilities) for these flows but this is exactly where managerialism failed and where the old hierarchical management might fail in the face of Network Centric Management.

He also looks at how change is made more complex when one cannot reduce the people’ status differences within the Firm, something not really new but so acute within communities (see page 36). New hierarchies have to appear, but they will be based on the quality of contribution and on the quality of individual’s skills, not on status nor on the quantity of contribution. Quality is at the core, as it was in quality management.

He also looks, among other examples, on how the cooperative behavior between suppliers and producers led to better cars (page 39) instead of a client/supplier relationship.

He reminds us that already in the early 70s (page 40 41) there was a very interesting conceptual movement towards considering successful organizations as those able to organize themselves like a natural living system with three basic principles: self organization, interdependence, diversity.

What I like in Locke’s approach, beside the fact that I have been working on these issues since the time of my thesis on Japanese Management, is that he reminds us of the necessity of the tools required for a successful collaboration. And the tools recalled here are not technologies, they are the very tools around the organization of work, see page 42 43, from Quality Control Circles to Takt time to Kanban, to JIT, etc. All these techniques were at the heart of the Japanese success. I think that we don’t have them all yet for Network Centric Management within the corporation even if we are approaching some of them (governance rules, moderation techniques, virtual/real interaction for problem solving, etc.)

The most striking exhibit in this article is the following one. Just replace TPS (Toyota Production System) with Network Centric Management and you will be surprised too. History really has lessons for us.

I let the conclusion of this post to Robert: » Was this management? Not in the Chandlerian sense or in the sense understood by purveyors of the « New Paradigm » in management education. But Management by Means produced much better results. »

Leave a Reply