Development Revisited: A Sociological and Managerial Analysis Part 6

It is an undeniable fact that economic development is a function of management. Without effective management, then, no economy can truly develop. Starting with this article, therefore, we will be examining economic development from the second perspective as I stated in the first part of the series; that of the Value Pyramid of Management (VPM).

What is the VPM?

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 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 are human resources which also precede customers/suppliers. Management is next and as mentioned earlier, the shareholder is at the bottom.

This is not meant to play down the importance of the shareholder in any sense. It is simply a holistic view of the relative roles and importance of the six stakeholders of management.

Using this perspective, we want to see how true economic development can come about. But before drawing that conclusion, we need to appreciate what economic development, as is known today, has done to these stakeholders due to setting faulty priorities. We begin with the first most critical stakeholder—Nature.

Nature

The physical universe is truly awesome. Thanks to scientific advancement, we are able to take a peek at what it is like. Currently, the exploration of the planet Mars otherwise known as the red planet is ongoing, hoping that life will be found there.

There’s no doubt that such explorations add to our knowledge and understanding of the universe. However, finding life elsewhere is simply a futile effort. Throughout the universe with its hundreds of millions of galaxies, (which scientific experiment suggests is still expanding) life can be found only on the planet called earth!

Is it not humbling that humans are self-sufficient on earth? All the material things that we really need to survive, and the physical things that add to our enjoyment of life are all derived, no, not from some distant planet or star, but from materials taken right from this earth!

Given this truth, how should we be treating the earth or nature? When we build our beautiful homes and furnish them very well, we make sure that we protect the house itself through proper maintenance. Also, we ensure that the house is constantly cleaned and as much as possible grime from outside does not get into our living rooms and bedrooms. But what about the earth; what have we done to our own home where we live?

Thankfully, the earth has its own mechanisms for recuperation. Thus to a very large extent, if only we can make ourselves good tenants of this earth and use it with its resources wisely and without greed, there would be no need to worry about upsetting its delicate environment. But unfortunately, we are ruining the earth as a result of greed.

In an article titled Consumerism is ‘eating the future’ in the New Scientist, Andy Coghlan made this poignant observation: “More specifically, all we’re doing is what all other creatures have ever done to survive, expanding into whatever territory is available and using up whatever resources are available, just like a bacterial culture growing in a Petri dish till all the nutrients are used up.

“What happens then, of course, is that the bugs then die in a sea of their own waste….But there’s worse. Not only are we simply doing what all creatures do: we’re doing it better. In recent times we’re doing it even faster because of changes in society that encourage and celebrate conspicuous and excessive consumption”. Is that true development? Let’s delve further into how economic development has negatively impacted nature.

Greed

As I stated in the third part of this series, the problem of economics is not scarcity, it is greed. That base instinct that is in all of us can take control of our lives if not curtailed.

In a world of uncertainties and fear of the future, many have sought security in amassing wealth greedily. True, it is not wrong if one works hard and smart and out of it is able to afford a number of material goods to make his life more comfortable and secure his future. What is wrong is when one makes that his/her primary aim.

Even though greed has always been with humanity, it has especially become rife in our time. Here is one of the reasons:

William Rees of the University of British Columbia in Vancouver, Canada has been quoted in the article referred to earlier by Coghlan as saying: “After the second world war, American economists and the government of the day decided to revive economic activity by creating a culture in which people were encouraged to accumulate and show off material wealth, to the point where it defined their status in society and their self-image”.

One of such economists was Victor Lebow who Rees quoted as saying in 1955: “Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfaction and our ego satisfaction in consumption. We need things consumed, burned up, worn out, replaced and discarded at an ever-increasing rate”.

Isn’t this what is exactly taking place? With most of the ‘developing’ world looking up to the American life-style as the ‘real’ life can we appreciate why greed has escalated throughout the globe? And oh, by the way, has it led to true economic development? The present state of the world economy, including America’s, attests to the faulty foundation for economic development that was laid! The earth rather suffers as a result with big corporations backed by governments greedily exploiting earth’s resources!

Andy Coghlan cited Rees and epidemiologist Warren Hern of the University of Colorado at Boulder, as saying that humans, despite considering themselves civilized thinkers, are “subconsciously still driven by an impulse for survival, domination and expansion… an impulse which now finds expression in the idea that inexorable economic growth is the answer to everything, and, given time, will redress all the world’s existing inequalities.”

He further quoted Rees as saying “We’re still driven by growing and expanding, so we will use up all the oil, we will use up all the coal, and we will keep going till we fill the Petri dish and pollute ourselves out of existence.”

Gross Immorality

Greed necessarily leads to immorality. When we talk of immorality, our minds naturally go to illicit sex. Sure, greed is at the heart of such a behavior. And no wonder illicit sex rates rise as economies ‘develop’. With the attendant psychological effects that can lead to low self-worth and also deadly venereal diseases, can’t we conclude that the nature of man is being destroyed in the name of economic development?

However, quite apart from that, immorality is also featured when businesspeople swindle one another and large corporations churn out products that are harmful to the environment and life onto the market with the connivance of some corrupt officials and journalists who pass those products as safe!

Immorality is also at play when professionals who are supposed to help the economy rather rape it greedily in the fashion of Wall Street scandals, driving millions into poverty and despair while they bask in their ill-gotten wealth and take  further advantage of government bail-outs!

Such immorality is further evident in the plundering of earth’s resources as mentioned earlier. A morally upright person would not take environmental issues lightly. Indeed, business owners whose activities harm the environment are more culpable than hardened criminals such as serial killers and armed-robbers! Yet, these are the very ones who are respected in the economy as its movers and shakers, walking about free and luxuriously whereas their activities not only endanger the lives of billions today, but of posterity as well! So much for economic development!

Unbridled Competition

Greed is once again at the heart of the tendency to compete. Yet, artfully, this has been promoted in economics as a saintly quality! But truth is, it is to a large extent to blame for the destruction of the earth.

Spurned on by the theory of evolution, in the name of developing their economies, countries deplete their own resources and then compete among themselves, scrambling for what they term ‘scarce resources’ available in other countries.

According to Coghlan, “Rees cited latest figures, taken from the WWF’s study Living Planet Report 2008, showing that, globally, we’re already in “overshoot”, consuming 30 per cent more material than is sustainable from the world’s resources. At present, 85 countries exceed their domestic “bio-capacities”, compensating for their lack of local material by depleting stocks elsewhere, in countries that have “surpluses” because they’re not consuming as much.

“Perhaps not surprisingly, given the encouragement from Lebow, North Americans are the most consumptive, eating resources equivalent to 9.2 global average hectares per capita.

The world can only supply 2.1 global average hectares per person. So already, Americans are consuming four times what the Earth can sustainably supply.”

He further stated that “The worrying thing is that if everyone on Earth adopted American lifestyles overnight, we would need four extra worlds to supply their needs” Is this the kind of development the ‘developing’ world wants to emulate? Is that a reason why life is being searched for elsewhere on other planets? Is that true economic development?

Garbage

Garbage is now one of the results of economic ‘development’. Cities are struggling to handle it. Throw in e- and nuclear wastes and you’ll appreciate the dire state of humanity and nature!

As one source puts it, taking the waste generated in the United States alone, “an equivalent weight of water could fill 68,000 Olympic-size pools.” Another one says “Some years ago, it was estimated that the residents of New York City alone produced enough garbage each year to bury the city’s huge Central Park under 13 feet [4 m] of refuse! (The park covers an area of 843 acres [341 ha], or about 6 percent of the surface area of the borough of Manhattan)”.

The British newspaper The Guardian puts it succinctly: “Advertisers help us to answer needs we never knew we had.” If we are thus convinced of such needs and we fill them but realize later that ‘new’ ones have come, where ‘new’ means development, ‘modern’, ‘better’ and superior’, what do we end up doing? Throw away! Now nature is suffering!

According to the same source quoted earlier, “An Italian environmental association estimates that a glass bottle thrown into the sea will take 1,000 years to decompose. In contrast, paper tissues will decompose in only three months. A cigarette butt pollutes the sea for up to 5 years; plastic bags, 10 to 20 years; nylon articles, 30 to 40 years; cans, 500 years; and polystyrene, 1,000 years.” Greed, competition, consumerism are all the cause of this situation. And they call it economic development?

Bad economic management is at the core of all of these problems. If nature were considered first as the most important stakeholder in economic development, managing the world economy wouldn’t have taken this turn to ruination. In the next article we shall consider the next stakeholder, Society/Humanity.

The author Jules Nartey-Tokoli is Founder and Group CEO at Groupe Soleil Vision, comprising Soleil Consults, LLC, NubianBiz dot Com and Soleil Publications. He has lived and worked in both Ghana and the United States, having extensive experience in Strategy, Management, Entrepreneurship, Premium Audit Advisory and Web consulting. He has also published several articles on Strategy and Management among others.