Development Revisited: A Sociological and Managerial Analysis–Part 10

Prologue

It is an undeniable fact that economic development is a function of management. Without effective management, then, no economy can truly develop. In this fifth part (tenth in all) of examining economic development from the perspective of the Value Pyramid of Management (VPM) we turn attention to management. Our goal is to analyse the extent to which management has impacted economic development and the effect thereby on management itself.

Over the centuries, management has largely been shaped by the interests of the capital owner. Shareholder value maximization, therefore, has been the pursuit of management. This has often led to trampling other more important stakeholders in management.

The VPM which was propounded by this author seeks to correct the erroneous view that has been held over the years by management and that has significantly held back true development. It holds that, rather than the shareholder being at the top of the pyramid as the most critical and important stakeholder, his place is really at the bottom!

At the apex, we have nature, followed by society/humanity. Next is human resource which also precedes customer/supplier. Management is next and as mentioned earlier, the shareholder is at the bottom.

                     Fig.1.The Value Pyramid of Management (VPM)

Management and Economic Development

Management is a basic human activity. Both at the micro (individual) and macro (corporate/national) levels we all make decisions as to what, how, when, whom and why. This is basically what management does, and it is the concern of economics as well.

However, in this context, the focus is on the macro level; how corporate organizations and nations manage the resources available to them; human and material.

Defective Management

Over the centuries, management has been in the hands of the elite—the highly educated, the rich, the powerful and the like.

At the corporate level, management is positioned as the strategists and the most knowledgeable. This has led to making fetish of the work of management and making it aloof from the real challenges on the ground. And members of management have become tin gods as a result.

Also, the primary goal of management has been shareholder interest maximization. Decisions made are therefore driven mainly by what will be in the best interest of investors with less regard to the other stakeholders. What have been the consequences of this tendency? Basically, this has led to the trampling of those stakeholders.

Nature is being abused at an alarming rate to fill the pockets of shareholders. Land degradation, deforestation, pollution are all but a few of the consequences.

Human society and its values are being destroyed. In the name of profits, families—the very foundation of society—are being disintegrated. Some large organizations do not balk at corrupting politicians and other officials in order to have their way.

In some jurisdictions, even where traditionally religious ethics were what propelled them to prosperity, management now ridicules religion, the very institution that should provide spiritual and moral guidance for its human resources.

At the other extreme end of the pendulum, this institution has been reduced to materialism by management in other lands; making the search for God seem like a prerequisite to material success.

As a result, the have-nots are made to feel that they don’t have enough faith and are disregarded in religious activities while business tycoons with questionable characters are held in high esteem. Hence, many do not see anything wrong with committing crimes for money, so far as they can launder it with a ‘blessing’ from God by donating a token to religious bodies.

Furthermore, with emphasis being on educational qualification rather than on competency on the job, management has unwittingly contributed to making the educational institutions become places to acquire knowledge for money, fame, prestige and power (selfish ambitions) instead of instilling in students their responsibility of contributing to make society a better place. And that explains the falling educational standards the world over which has had a direct negative effect on production and employment.

Thus instead of their aggregate activities leading to improved societal stability and cohesion and adequate material well-being for all, inward-looking management has rather deepened the woes of society, making life more unbearable.

This has led to the situation that Lucky Dube sums up in his track Celebrate Life: “We’re living in the world with a lot of crazy people. We’re living in the world with psychopaths. Every one of them wants to rule the world. Some people have the front row seat at the top of the world. Some people have nothing but just a life. Problems are there left and right. Liars, cheaters, politicians and backstabbers making life a little bit more unbearable. It is a give or take world. So you got to take what you can when you can. Make the best of it.” (From the album Respect).

Just as the main focus of management at the corporate level is driven primarily by figures and the shareholder interest, so it is at the national level.

In the pursuit of economic prosperity, a charade of solutions is all that we see: family well-being and cohesion is ‘compensated’ with national family welfare institutions that hardly deal with the real issues; the values that hold society have given way to value relativism and pluralism; morals are replaced with alternative lifestyles; nature is being raped under the pretext of providing for the poor; contentment is despised in favour of consumerism that drives the economy; and so on. Human society is thus crumbling slowly but sure!

The development and management of human resources at both the corporate

and national levels are equally faltered. And the customer has become a victim of exploitation and deceit. All this is designed to make the rich (capital owner) richer and the poor (human resources) poorer. Can this be true economic development?

What Management Should Be Doing

All of the problems of human society are caused largely by management. To reverse the situation thus calls for the re-invention of management at both the corporate and national levels.

Due to the power imbalance between management and human resources as well as the condescending nature of the former, the latter are not being fully engaged. Management is unable to create a market of ideas, creativity and innovation at the workplace, operating as if human resources only know one thing and that is all they can do to aid production. This has to change if organisations would produce at full capacity and wealth is to be more equitably distributed.

It is also important for management to humbly submit to the will of nature and approach the utilization of natural resources with awe and with responsibility. If that is done, not only will there be enough for everyone, but the environment will be preserved to serve posterity.

Management should also appreciate and respect more fully societal values and norms. It is not enough to provide educational facilities and other amenities for society and not concern the organization with its impact on what hold society together.

For example, should organisations continue to separate spouses and tear parents form their children for the sake of satisfying the shareholder’s value? Isn’t that course taken by management what is boomeranging at it in less quality human resources and crime in society?

What about the customer? Apart from providing quality goods and services to satisfy customer demands, management should not have it as its goal creating ‘needs’ for customers which are actually wants. While that might fill the shareholder’s pocket, what will be the effect on the environment? Is it feasibly sustainable?  

Reaping what Was Sown

It is simply unnatural to sow corn and expect to reap cocoa; neither can a dog give birth to a lion. Nature thus teaches us that what we are rewarded with is what we give out. So that which management gives to nature, society, its human resources and customers is what is coming back at it and society at large by way of pollution, climate change, crime, corruption, low productivity and all.

Is this true development? I leave it to each one of us to answer honestly for himself/herself.