Robert R. Locke and J.-C. Spender Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance Zed Books, 2011.
Confronting Managerialism offers a scathing critique of the crippling influence of neoclassical economics and modern finance on business school teaching and management practice.
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.
From a British perspective, managerialism is an alien curse, completely inappropriate to organisations that rely on ‘real’ professionals, particularly where judgment or innovation are called for. The book supports this view, and shows that it is even a disaster when applied to mass-production on managerialism’s home ground.
The review above notes the role of the mis-use of mathematics. Here I comment on the book’s treatment of this problem.
[T]he balance was disturbed by the obsessive preoccupation with numbers … . For people in [the] immediate postwar generation, numbers implied objectivity and accuracy. … [But] at the point where outcome cannot be modelled, where numbers no longer suffice and the manager’s rationality is evidently bounded, there human agency or judgment enters in to counterbalance the messages numbers convey.
The irony is that the real value of training in the use of numbers springs not from denying the relevance of management’s judgment, but from those managers who … fully appreciate the limitations of numbers.
Ultimately the value of measuring and modelling lies in how it helps the entrepreneurial manager focus his/her imagination on what remains: the are of uncertainty … into which entrepreneurial agency must be projected.
[P]eople who know nothing of their limitations do not know anything useful.
The experience of being a member of something beyond the self, a certain result of being together under fire, creates a special relationship with those who shared the relationship that has no match in any other sphere of life.
Just as it is the love of money, rather than money as such, that seems to be a problem, it is not numbers as such but an obsession with numbers that is being accused. Mathematics is the study of numbers (among other things), and the appreciation of the limitations of then use of numbers, as is being called for, requires some familiarity with mathematics. That is, if mis-apprehensions about numbers and rationality are a part of the problem, mathematics should be a part of the solution.
The last quote above introduces an extra dimension, well beyond the experience of ordinary mathematicians. But the experience of ‘boffins’ in the Second World War and later shows that there is no fundamental problem:
- People who ‘know what they know and its bounds’ may not have had the experiences cited, but there should be no conflict.
- There is no reason why people shouldn’t be both mathematicians (or logicians) and experienced.
Indeed it seems to me that there is much exciting mathematics that has come out of a meeting of the above two worlds, although it seems not to have impacted upon many managers.
The principal issue raised in this study, then, has not been whether people in management should learn mathematics, technology and/or science, but whether management, as a general function, can be treated as a rational science in management praxis or in business schools.
The problems with operations research … increased doubts circa 1980 about the usefulness of mathematical model building and mechanical analysis in decision making.
People in [finance] confused theory with reality … committing their businesses to rationality, epitomized in market modelling, the rapid spread of mathematics in finance, and the rise of the institutional investor.
This book considers US managerialism to be a principal cause of wealth maldistribution and a chief promoter of bad management in finance and industry.
I am intrigued by the phrase ‘rational science’. According to my copy of the Concise Oxford Dictionary rationality simply means ‘well reasoned’, so ‘rational science’ would seem to be an oxymoron: ill-reasoned science is bad science, and arguably not science at all. But I see that wikipedia requires that the conclusion be optimal, and hence that the problem be quantifiable and – even – that the method be ‘mechanical’. Its seems to me that in this sense, ‘rational science’ is an antimony: that is, if it is any science must recognize the provisional nature of its findings and hence deny its own rationality. Thus, while 2+2=4 is rational, number theory is not, as witness the variations in axiomatizations and key theorems.
It seems to me that some managerialists believe in decision-making by numbers, a belief that a study of either mathematics or science would have cured them of. Others may recognize the limitations of decision-making by numbers but nonetheless regard it as pragmatic. It is here that the book is most useful, in showing the consequences of such pragmatism. But this gives rise to another hypothesis. Maybe managerialists, and others, tend to focus on the short-term, disregarding the long term. Indeed competitive pressure between managers and organisations would seem to favour those who focus on the short-term. From a mathematical perspective the book’s criticisms of ‘decision making by numbers’ focus on long-run factors. In the short-run, the assumptions of conventional utility theory and of what the book describes as the rational scientific approach seem reasonable, certainly pragmatic. So perhaps the problem is not rationality, but undue competitive pressure and hence a focus on the short-term?