HAS THE MANAGEMENT MODEL CHANGED?

“In the acquire-or-be-acquired corporate mayhem of the 1980s, the mantle of management has
passed to investment bankers and number-crunchers whose vision extends no further than the
next quarterly earnings statement.”

(Charles Fountain. Christian Science Monitor 10 Dec 1986)

It is often stated that management in earlier decades, certainly the 1950’s and
1960’s, was much easier in that most people tended to learn whatever skills were
necessary for the workplace, mostly manual, whilst they were in secondary education;
that people joined a company or an organization almost immediately on leaving
secondary school and tended to stay there throughout their working life, unless they
were a woman and left to get married and raise a family; and, that promotion came,
mainly, from having a good work record, from taking professional and vocational training
courses and from time-served at different levels within the company.

There can be no doubt that, since the early 1980’s, the work-place has changed
considerably, undergone something of a transformation and maybe even radical change,
in which the notion of a company as a paternalistic organization has all but disappeared;
where jobs for life have, literally, become a thing of the past; where the concept of loyalty
and commitment in return for job security and stability are no longer part of the equation;
and where job titles and terms of reference appear to change on a regular basis in order
to keep pace with regular changes in corporate structures. In some respects the
workplace has become a kind of organized chaos. But, people have not changed all that
much and it begs the question has the management model really changed?

The last two decades of the twentieth century saw the introduction of a plethora
of management fads, such as delayering, downsizing, outsourcing, business process re-
engineering followed by resource re-allocation, all programmes designed to reduce
overheads by shrinking the number of corporate employees. Simultaneously, predatory
organizations, mostly larger but occasionally smaller, have gradually but somehow
inexorably achieved growth not through investment in research and development,
neither replacing and updating machinery and other equipment nor through investing in
programmes of training people but through the process of mergers and acquisitions.
Naturally, senior managers, and those climbing the corporate ladder and on
management courses, appear to have taken their management models and case studies
from this time and have embarked on the same or similar programmes.

And, at the beginning of 2002 and after a rapid downturn in corporate growth and
profits, especially in the information technology and telecommunications sectors, it
seems likely that this process of consolidation will, after a decade of spectacular growth,
continue along the same path because, for the time being, there does not seem to be an
alternative. That is some companies will seek to strengthen their weak position through
acquisitions or mergers and in the process talk about synergy and growth and the
savings to be made by removing many thousands of workers from the merged
organization. The fact that very few mergers and acquisitions actually generate greater
returns for shareholders and investors and most certainly do not benefit the majority of
workers in the merging companies does not seem to detract senior managers from
putting together such plans. Indeed, it appears that the only people who gain from such
plans are the senior managers and the financial institutions and management
accountants who provide advice.
 Companies, and by that I mean senior management, blame any corporate failure
on market conditions rather than on a badly handled or poorly thought out merger or
acquisition and that includes communication with the workforce in both companies prior
to and after the merger. Let’s face it, how can you seriously expect someone to
cooperate when he or she is likely to lose his or her job or may even end up on a lower
salary scale than the one they had before the acquisition. How on earth can senior
managers really expect everything to go smoothly when there are likely to be
disincentives to motivation and commitment? So, nothing has changed there.

However, I also wonder if the customers of the acquired company will keep faith
with the new management and organization and more especially if the culture in the new
company is different to what they had been used to dealing with? Business may be
business but, again, people are comfortable with a system that they know and
understand and a move to, perhaps, a more aggressive business style, might not suit
some customers and they will take their business elsewhere and so the cycle continues.
So, not much change there.

Notwithstanding the increased pressure on those remaining within these ‘leaner

and meaner’ companies many chairmen, chief executives, directors and senior
managers are, through the pages of their annual reports, still in the business of insisting
that their most valuable resource is their people. Leaner appears to imply that senior
managers are constantly looking to achieve more with less and that translates as fewer
people taking on more and more tasks and responsibility and generally being paid less.
There is nothing clever about the ‘hire and fire’ tactics employed in some American and
British companies and lower costs often translate into dissatisfied, demotivated and
disgruntled employees and a subsequent reduction in productivity and competitiveness.

Mean appears to translate as directors paying themselves regular increases in

pay, perks and share options whilst adopting tight controls over the pay rises for those
lower down the corporate ladder. However, a point is reached with the ‘lean and mean’
machines where employees vote with their feet, customers go elsewhere and the value
of the company and its shares decreases. And, when the value of shares decrease
larger investors begin to sell their large holdings and the value decreases even more.
What directors are charged with doing is balancing the needs of one against the wishes
of another and the demands of others.

However, I am reminded of the frailty of the relationship between the top and
bottom, and increasingly the middle, in many organizations by a copy of a Dilbert
cartoon in which the ‘pointy-headed manager’ says that employees are not the most
valuable asset in the company and that they rank ninth behind carbon paper. I suspect
that such areas as brand names or brands, currently receiving a higher profile, customer
relations, marketing, strategy and knowledge are much more important than employees.
But, who knows, now that carbon paper is in decreasing demand and rarely used
employees may have made it to eighth position?

But the fact remains that in the overall scheme of things people are looked upon
as an overhead that costs money, as an asset or sorts that cannot be depreciated over
time except towards the very end of its useful life at which point it can be replaced by
someone younger and cheaper, and besides, people cost money to train and re-train
and provide with the necessary tools of their job.
 Even when economic conditions are difficult senior managers know that they
have to offer the right inducements in order to attract talent but still treat employees as
something that should remain at a minimum level. Few companies appear to have
addressed the reasons why employees are disgruntled, why some are not committed to
what they do, why productivity is not as high as in, for example, German, French, Dutch,
Swedish or American companies and why employees leave. It can be suggested that
little or no effort has been made to improve the management structure, improve training
and advancement programmes and improve career prospects such that loyalty might be
increased and efficiency, effectiveness and productivity might rise.

Given the option I still suspect that instead of a valuable resource most senior
managers would choose to employ as few people as possible and even then in a
‘machine-minding’ capacity. Indeed, as soon as there is the slightest whiff of an
economic downturn let alone a recession out come the long knives of redundancy. So, in
that respect the management model has not really changed.

This sort of approach, naturally and understandably, has not only led to a break
in the concept of loyalty and commitment between employer and employee it has also
led to an increase in cynicism. The appalling events of the 11 September 2001 in New
York only exacerbated the slowdown in an already shaky global business scenario but it
also encouraged some employees, especially those who found they were committing
more and more time to their job, to re-think their job game plan and re-assess their
priorities.

Indeed, if more people believed in themselves then I suspect that many more
would walk out of the job they are doing especially if it does not provide satisfying
employment, if there are decreasing or no promotion prospects or if they are required to
work longer and longer hours without a subsequent increase in salary. Many tend to
stick with the job they have because they are comfortable with what they do and, like
children, do not like too much change or upheaval.

Despite having higher productivity levels than UK companies many people at the
lower levels in US companies, according to reports, hate their jobs and would leave
given any kind of opportunity. Whilst some companies in the Far East nations still begin
their day with the company song and a short exercise routine American workers have
adopted the country and western song “Take this job and shove it” as their favourite tune
and words. Rather than take a close look at the causes of such dissatisfaction with the
American system management blames a breakdown in cooperation and commitment as
the result of attitude and character rather than on the increasing financial differentials
between top and bottom and the fact that the lower levels rarely get to see who makes
the decisions in the organization. So, no change there!

It begs the questions are human beings a valuable asset or a nuisance factor; if
fewer of us were in employment providing, operating or manning the equipment to
produce goods or provide services then where would the money come from to keep the
capitalist economic ship afloat; and, what would the management model look like? In my
view managers will have to change the way they employ and manage people and
management methods will have to change to meet a definite mood change. The idea
that employees can still be treated as automatons and do as they are told without
thinking should have almost disappeared especially since knowledge management is
the, present, way ahead.
 If we are to accept and believe the notion that employees have knowledge that is
useful to the effective, efficient and competitive advantage of the company then one can
hardly treat them as subordinates. In that respect managers will have to learn to support,
encourage and facilitate progress of people rather than try to micromanage their efforts.
So, there is not much evidence of change at present in this area.

The reason is that all organizations, whether government, manufacturing or

service sectors, consist of people who work together to achieve common goals or
objectives that are communicated through a structured or semi-structured system. Other
people who, presumably, have the same common goals manage the implementation of
the objectives and yet other people, chief executives, ministers or director-generals
determine and define the common goals. However, if and when there is a change in the
objectives then they must be clearly communicated, at the earliest opportunity,
throughout the organization and if some do not like a proposed change of tack then they
can choose to leave. Gone is the idea, with the loss of the paternalistic approach, that
employees must remain loyal and committed to any company. And, leaders, politicians
or managers, are only kept in position and in power just as long as the people that
support them or work for them continue to accept their policies, plans and organization.

Companies have also introduced the idea of teamwork where people in a group,
section or division, much like in a warship, a submarine, a regiment or an air squadron,
work together to achieve objectives. In other words, and despite the introduction of
delayering, downsizing, re-engineering, outsourcing and empowerment, there is still a
fundamental hierarchical system of management and control. And anyone who believes
that increasing transparency, coupled with greater access to data held electronically or
otherwise and the supposed introduction of corporate governance procedures and best
business practice, will lead to a change in the process of management and control need
to re-assess that view. I say again, there is no such thing as empowerment, only a
willingness to contribute time, effort and commitment within boundaries.

Nonetheless, when invited to provide examples of real teamwork many people

quote emergency organizations, for example, a crash team in hospitals, the fire and
police services and the military who are regularly, and often, placed in difficult and
dangerous scenarios. Some might suggest a rugby or football team but the sporting
analogy does not really apply to management.

But, apart from the hospital crash team all the other units have a very clear
hierarchical structure where people are trained and re-trained to respond to developing
situations and provided with the necessary skills for the simple reason that their life and
that of their colleagues is at risk. Without setting minimum vocational and professional
standards, training and testing teams of people to achieve those standards and relying
on their professionalism then how could an emergency ‘crash team’, a fire crew or tank
crew or the company of a warship even begin to carry out the tasks required of them?

And training is yet another area that has been cut, in many companies, in order
to maintain profit margins in order to continue to pay dividends. But, returning to our
previous examples of teamwork should members of an emergency crash team reduce
the level and standard of proficiency to save money or do you think that the general
public might have something to say?
 Should the fire service reduce the amount of training it carries out to remain
within budget? Should entry to professions like, for example, airline pilots, naval and
military officers, doctors, dentists, radiographers and barristers have reduced entry
levels, shorter training time and lower standards as a means of encouraging more
people to apply thus providing services more cheaply? The only answer must be no and,
therefore, companies should not reduce their training budget especially in the provision
of management and supervisory courses.

The reason given for many delayering programmes was not to reduce overheads
but to achieve a flatter management structure where people, in teams, were given
responsibility for making and taking decisions much lower down the structure. But, such
programmes have not led to a corresponding flattening of pay structures. Indeed, if
anything, the pay of those at the highest levels in companies has, according to many
reports in the media, tended to increase at a considerable rate and always far greater
than the percentage increases given to those at the lower levels, even to increasing
reward for failure. Therefore, if the concept of flat management structures and
empowerment is to achieve any credibility then pay structures within companies will
have to be re-appraised, revised and flattened. So, no matter what else happens there is
no change with management pay structures for the time being.

And what might happen to trades unions in the future? Do not forget that trades
unions came about because of the exploitation of workers by owners and managers
during the 19th and early 20th centuries. Trades unions were established to look after the
interests of those on the lower levels of companies who did not have a voice in the
boardroom or the restaurants of the senior management and who were completely left
out of any discussions involving the future direction of organizations. They actually
represent the interests of the majority of lower paid workers and as such they are not
groups specifically designed to ruin a company and its reputation, so then why are they
treated as some kind of industrial disease?

If you do not have good internal industrial relations then how on earth do you
expect to maintain good relationships with your customers and suppliers? Some
companies have now insisted on no union representation in their workplace and one has
to wonder what questions that raises about the senior management, so no change in
some quarters.

I am not convinced, others may be, that the management model has really
changed all that much apart form the fact that opportunities for people to progress have
been severely curtailed and it has led to increased frustration. Indeed, power now
appears to be concentrated, in government and organizations, within the top one or two
levels and companies remain even less democratic. Worse, the removal of layers and
levels of middle managers has also meant that, often, communication between top and
bottom has decreased rather than increased. I suspect that many have forgotten the
fundamental principle that management is first and foremost about people and they may
have forgotten some basic management principles taught earlier in their career and
others, younger managers, have not yet understood the importance of keeping
employees gainfully employed but also motivated, committed and happy.
 But why is it then that some companies have a very good reputation for
management quality, quality of goods and community and environmental responsibility,
for example John Lewis, BP, Shell, Tesco and Sainsbury, some have a reasonable
reputation and many others have a poor name for, variously, employment and retention,
customer relations, staff management, terms and conditions, quality of product or
service or reliability? Why are some seen as progressive and yet others appear stuck in
some kind of time warp be it the 1960’s the 1980’s or even 1990’s? What are the
qualities that mean the same people and sometimes the same organizations are
selected, over and over again, as being good chief executives or managers and
companies and what do they do that so many others do not? I suggest that greed, and
overpaid directors, is not a quality that is admired by employees at all levels in
organizations.

It is a tall order and there is, despite the enthusiastic warbling of management
schools, management writers, academics and management consultants, no simple
answer. Besides, one man’s meat is another man’s poison and the trap is to hold up
companies as examples of sound management principles and procedures only to find
that they next year they disappear down the pan. But, there are a number of points that
might be considered:

y Many companies are now global, or have global aspirations, and so they need to
develop a global perspective. By that I mean adopt or adapt the best business
practices and principles from any organization.
y Assess all management practices and fads and only adopt those that best meet
the demands of your company. There is no ‘one-size-fits-all’ form of management
y Concentrate on customer service. If you treat your customers in the right manner
then even in an economic downturn they may continue to return.
y Make sure that you treat your workers fairly. When conditions become tough their
loyalty and commitment will be instrumental in ensuring that you continue to
exist. It is only those organizations who plan for the longer term who tend to
survive.
y Innovate but only keep those products, services, systems and procedures that
work.
y Introduce any and all quality assessment procedures especially those related to
Quality Management and Environmental Management under, respectively, BS
EN ISO 9000 and BS EN ISO 14000.
y Nurture the people within your organization; their knowledge, skills and contacts
with customers are what keep the company going. Knowledge is something that
individuals own, not organizations. It often pays to ‘grow your own’.
y Ensure that you implement best corporate governance practices and procedures
and more especially in financial dealings. Without ethical guidelines you might fall
foul of customers and the media.
y Involve a cross-section of employees in the decision-making process. It is
possible that someone lower down the corporate ladder might have a sound
idea.
y Communicate – keep your employees apprised of changes in circumstances,
conditions or corporate strategy. It does not pay to restrict information and
corporate strategy should be in everyone’s best interests.
y Make sure that guidance and directives in such areas as the data protection act
and accessibility of personal information are enforced. This includes access to
personal personnel files, reports and assessments.
y If your employees choose to have union representations in the workplace then
discuss the matter and the issues and follow the guidance. It is, almost, counter-
productive to ignore the wishes of your employees.
y Provide the appropriate and necessary training programmes to keep the skills of
your employees up to date. It is not simply about developing an employee it is
about making them feel more secure in their work environment and, that includes
mini-management programmes for those not already in managerial
appointments.
y Introduce flexible working procedures as part of the company culture. Many
employees already feel that their life/work ratio is not in balance and allowing
people to work at home on a permanent, semi-permanent or occasional basis
might help.
y With the introduction of flatter management structures, associated with
delayering and business process re-engineering, then ensure you have a flatter
pay structure to introduce an element of fairness. Otherwise re-introduce a
hierarchical structure.
y With an ageing population, especially in the advanced industrialised nations, it
will become increasingly important not to remove too many older workers from a
company and to carry out succession planning. The government has, belatedly,
recognized that forcing out older workers, over 50, places considerable pressure
on the public purse and an additional loss in taxation. Ageist policies are not
constructive.
y Make sure your organization has a fair and reasonable system of assessment
and that pay is not based entirely on performance. That is simply because,
despite the efforts of best management practice, all assessment reports are
subjective.
y It is so often stated that share option packages are designed to reward and to
retain executives and other senior managers whilst aligning their interests and
commitment to that of other shareholders in order to maximize profit levels and
dividends. If that is the case then why treat other employees differently? Are they
too not worthy of rewarding in order to retain their interest, motivation and
commitment?
y Strive not to exercise micro-management practices. If you spend much of your
time setting targets, checking on the schedules and output of your staff then they
are likely to become increasingly disenchanted. Besides, if you have to keep
checking procedures then there must be something wrong with those procedures
or with the system that relies on or demands input.
y If you make a mistake make sure you are big enough to apologise and in public if
necessary. Only small people adopt the ‘macho’ management style that is based
on the outmoded concept that senior people do not apologize.
y Look for ways of making staff more productive through co-operation and
communication. If you do not talk and explain how can you expect people to
understand and respond?
y Improve your methods of motivation. Realize and accept that people are
motivated in different ways and for different reasons and at different levels. There
are, literally, thousands of ways of motivating people – FIND them and use them!
y Make the workplace, the ambience and the environment more attractive so that
people, your employees, want to come to work.
 The list is not endless and there are, probably, other areas that might be
addressed but it is a starting point. Try not to stifle discussion because creative
disorganization is important if companies are to progress. I mean that the highest levels
must not exercise total command and control but allow people lower down the tree to
think about what they do, to make more immediate decisions, proceed with plans and
get involved in the decision-making process.

Teamwork is important of course but senior managers must not lose sight of the
fact that we are all individuals and as such we can co-operate with some people, work
with others and take a distinct dislike to others. Teamwork is paramount in naval and
military organizations, in hospital accident and emergency and crash teams, in other
emergency services such as fire fighters, but it is not always essential in every company.
Besides, senior managers have spent two decades telling us we are all individuals and
that performance-related pay rewards those who work hardest and now they want to
encourage teamwork among people who are paid different rates for doing basically the
same job? No wonder confusion and frustration reign in many workplaces.

Work is something that was invented and refined, in earlier centuries, by every
type of ruler and titled personage, especially those who owned the land and resources in
individual nations, to keep those of lesser means occupied. By being employed in the
service of a local fief also meant that you were available for more dangerous
employment, as part of his army, in the event of hostilities with neighbouring fiefs.

Nonetheless, the need to employ and control labour resources became even
more important during the Industrial Revolution and the expansion of automation when
more and more people moved from working on the land to the factories. Management is
something that has been around for centuries and there is nothing new but different. It is
a process or system which evolved during the 20th century and it only began to change
when it became a separate career driven by the introduction of management
programmes and courses provided by universities and business schools and driven on
by the rise of the management consultant and management guru.

However, there is no such thing as a standard management structure and no

such animal as a standard manager, and the one that works best for one organization
will not necessarily work in another because one size does not fit all. But I am not
convinced that you can teach people how to be good managers let alone good leaders.
As the management writer Henry Mintzberg, allegedly, suggested:

“Business schools train people to sit in their offices and look for case studies. The more Harvard
succeeds, the more business fails.”

The management model may have changed, because of programmes designed

to reduce overheads and numbers such as delayering, re-structuring and outsourcing,
but I am not convinced that it has, necessarily, changed for the better. I prefer to believe
that the optimum management structure, including levels or layers of management, is
that which best suits the needs of individual companies and individuals within companies
and not what is, supposedly, the latest management order, fad or thinking from
management gurus or consultants or from business schools.
 Besides, MBA courses appear designed to regurgitate the lessons learned from
previous companies through case studies of how one organization or another dealt with
a set of circumstances, and not designed to lead, motivate and manage people. In my
view such programmes need to be revised to take account of more important areas such
as managing and motivating people, providing leadership and direction, co-operation
and communication and environmental, ethical and social values. So, for the time being,
there is little or no indication of change in the process of management training.

Regardless, successive surveys continue to show that many people are not
satisfied with what they do, with what they are required to do or their working conditions
and many are still distrustful of senior management undoubtedly because of
programmes of downsizing, delayering and business re-engineering. Therefore,
managers have to learn to earn the trust of the people working for them. That demands
greater honesty, greater openness and flexibility before there is any sign of an increase
in commitment.

The biggest problem remains one of retaining people in the workplace motivated
through whatever programmes are available, such as professional and academic
courses, the opportunity for advancement and promotion, acceptable pay rises and of
course involvement in the decision-making process. If companies do not learn to adapt
and adopt much more flexible work patterns and schedules then I suspect that
employees will move to companies with a more enlightened view. So, for the moment,
not a great deal of change there.

The real challenge for management now, in this decade, and for the foreseeable
future is to provide not only the flexibility of service demanded by customers and clients
but also to make the workplace more inviting for employees by the use of more flexible
work patterns and schedules that are increasingly likely to be demanded by the
individualistic society that has been created through earlier management programmes. It
is only through enlightened business practice that people relax and take an interest in
what they do and when they are interested they are more likely to look for ways of
making their systems or procedures more effective, they may even become more
innovative.

This is particularly relevant to the concept of knowledge-management, or as I

prefer to suggest the management of knowledge, where groups of professional
individuals, with varying levels of academic qualifications, abilities and intelligence and
dealing with work that requires a degree of autonomy, decision-making and judgement
come together in what should be a loose-knit group to perform similar tasks.

This principle applies to areas like journalism, IT consultancy work, legal

professionals, accountancy professionals, in knowledge-based organizations where
individuals look after particular areas or programmes of work and people involved in
research and development and in universities where they know more about their
portfolio of work than their line managers. In those circumstances it is paramount to
allow people a degree of flexibility, a great deal of trust, to allow them to work from home
occasionally, to allow people to get on with their work and to visit clients or customers on
their premises. It is also paramount to provide the right ambience, décor, furnishings,
facilities and equipment to enable them to do their job.
 However, it you try and squeeze them all together in a restricted space, introduce
too many rules, guidelines, procedures and instructions to monitor their effort and output
then you will be wasting your time and their time.

There are still some unenlightened types who suggest that the management
structure in most companies is too much like the command and control structures in
military organizations where, supposedly, people are not trained to think but to respond.
Frankly I am sick and tired of reading such drivel from people who have never served in
the military and have no idea or concept of management, organization and
administration within naval and military units.

Military organizations function effectively and efficiently because people know

what is required of them, they are trained to deal with different scenarios and under
different conditions and in different circumstances and they are provided, mostly, with
the tools essential to carry out the tasks required of them. And most importantly, there is
two-way communication up and down their command structures, people are trained over
and over again to work and act in teams and to respond to difficult and developing
scenarios. I will go so far as to suggest that commercial organizations could learn a
great deal about commitment, loyalty, organization, training and support from our naval
and military bodies.

Besides, despite delayering most organizations still employ hierarchical

structures it’s just that some titles lower down the management tree, have changed to
give the impression that there are fewer managers and sometimes people are given
impressive titles, without responsibility and accountability, to imply progress. Fine if the
title also carries and increase in pay and perks but not good when it is a sop designed to
patronize the people working in the organization because at some stage it will rebound.
Little wonder there is less and less loyalty!

The fact of the matter is, again, that what works in one area will not necessarily
work in another, however, there must be structure and organization to enable any
company to maintain direction and the best way of achieving that momentum is, in most
cases, a hierarchical system. But, there are areas of business, mostly in the creative
service sector, where people believe they are all at the same level and will not generally
accept direction. That requires a different form of management based on reaching
consensus but, nonetheless, it still requires decision-making and taking.

Regardless, in future senior managers will have to take a very close look at the
concept of stakeholders because people are likely to demand better working conditions,
greater emphasis on individual motivational factors and for work to move, again, away
from the repetitive jobs that have come about with the introduction of computers, word
processing and message storage and retrieval software programmes.

In addition, employers really are going to have to change their attitude and
approach not just to their employees but also to the local community in which their
company is based. This is re-enforced by a study, in America of all places, which
showed that eighty per cent of Americans believe that it is more important than ever for
companies to support the needs of society. Further, the Cone/Roper Corporate
Citizenship Study, published in November 2001, also showed that seventy-five per cent
of people questioned stated it was paramount for a company to support social issues
and this factor was important in choosing which company to work for.
 As they say, what goes around comes around and senior management are going
to have to learn that since they can no longer meet people’s aspirations through
advancement and a career structure that they will, probably, have to begin to understand
what individuals want in order to achieve or maintain their own life/work balance. For
years, decades even, the needs and wants of the most senior management have been
catered for by individual reward packages and bonuses including share options,
membership of clubs, motorcars, first-class travel and severance packages but little
effort appears to have been made to cater for those lower down the structure. That is
something else that will need to change and the innovative companies will be the ones
to realize they have to attract, motivate and retain people at all levels and not just at the
top.

(5730 including quotations)

KENNETH ARMITAGE

23 December 2001