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Management in the 21st century: a modest proposal.


At the turn of the century, the challenge of understanding the duties of managers arose from the need to separate the management function from that of ownership. The first generation of managers were both owners and employers. These individuals assumed multiple roles in running their businesses. On the one hand, they were responsible for giving birth to new ideas in the form of services and products, upon which the fledgling organizations could rely. On the other hand, they were also responsible for marketing and customer relations, as well as financial control and supervision of workers.

As the industrial revolution took hold in the U.S. and these small, entrepreneurial organizations gave way to large manufacturing and industrial enterprises the true essence and legitimacy of the management function began to emerge. While it was impossible to argue with the right of entrepreneurs to administer the businesses they had created, observers of the business scene were making a strong case for a unique area of organizational responsibility that was exclusive of both the owner and worker roles.

The first attempts to legitimize and define the role and responsibility of a manager were ushered in through the work of Frederick Taylor and his approach to making management "scientific." (Taylor, 1911) To Taylor, the objective of management was obvious. Managers were first and foremost responsible for ensuring the integrity of the production setting, and this translated into the efficient use of both human and technical resources. From this perspective, the human actor in the production setting was, with minimal training and incentives, assumed to be infinitely adaptable and subordinate to the ever present and robust technology of the time.

Later in the 20th century still others sought to define the manager's role. After a lengthy career as an executive with a major U.S. corporation, Chester Barnard in 1938 published his comprehensive treatise on The Functions of the Executive (Barnard, 1938). Barnard summarized his perceptions of the role of management and the qualities of a good manager. As the mid-point of the century came and went, still others with expertise in such diverse areas as economics, psychology, and engineering all seemed to conclude that the field of management and managers could profit from their approaches.

More recently, respected individuals from a variety of orientations have cautioned practicing managers and students of management that the job was going to be very different as we approached the 21st century (Drucker, 1980; Peters and Waterman, 1982; Toffler, 1981; Raymond, 1986). For various reasons, these authors suggested that much of what we know, or think we know, about the practice of management would no longer be appropriate in the next century's post-industrial society.

This author strongly supports the notion that during the mid-1970s this country and its business institutions took a dramatic and irreversible turn. The new course was in both obvious and subtle ways completely different from that which had gone before it. The remainder of this paper is about this change, the decades that preceded it, the social forces that gave birth to it, its specific character, and most importantly within the context of the next century, how the management function must change.

Management and its Historical Roots

The industrialization of any society, whether in Western Europe, the U.S. or South America, presents monumental challenges and may strain the society and its institutions to their very limits. One challenge is associated with integrating the individual as a source of energy and skill into the highly demanding technology of industrialization. This technological-individual relationship is by no means natural, but must be consciously and systematically planned and instituted. In the industrialization of the U.S., this integrative responsibility was viewed as the primary function of the professional manager and seemed to be built on a critical assumption regarding people and the technology that they used. The assumption was that technology, as it was applied in the industrial setting, should be without restraint. The clear imperative of this period was the necessity of exchanging human skill and effort in favor of the machine. The machine and its technology were designed to make the worker redundant, and the triumph of technology was its ability to displace the worker from routine jobs in favor of the machine--a machine that was more predictable, accurate, and ultimately cheaper. Dramatic changes were made in our society largely as the result of putting this technology to work to win wars, improve the standard of living, and assure a position for the U.S. as a formidable military and economic power.

This basic assumption seemed to guide the development of our industrialized society for the first seventy years of this century. It provided for the efficient transformation of an agrarian society into a major industrial and economic power in record time and with minimum trauma. This rapid advancement was accompanied by a good deal of social arrogance and isolationism. The commonly held notion was that the U.S. should serve as a model for the rest of the world. Manufacturing was the society's foundation and nowhere in the world could manufactured goods be designed, engineered and built better than in the U.S. Huge industries such as consumer goods, household appliances, and automobiles prospered between the end of the Second World War and the early 1970s, and nations around the world battled for the "Made in U.S.A." mark on the products they purchased.

The Changes of the 1970s

After reviewing this scenario, one might ask why things today are so dramatically different. The early 1970s witnessed a number of significant departures from the industrialization period of our society, which are discussed next. * Labor

Inexpensive labor, primarily in the form of unskilled and craft workers, was the staple of our industrialization. The resource seemed inexhaustible. Hundreds of thousands of unskilled farm workers migrated to the commercial centers during the first part of the century, and largely as the result of Taylor's teaching, were easily integrated into the factories and industrial settings of the time. Still later in the 20th century population expansion and immigration continued to provide individuals who were more than willing to do the work of the industrial society at prevailing wages.

In the early 1970s, however, a new value was associated with skilled and unskilled labor. The baby boomer generation was not willing to do the physical work of the industrial society. These individuals attended colleges and universities en masse and graduated with degrees in the sciences, humanities, business, and engineering. The unwillingness of America's youth to assume traditional manufacturing jobs served to inflate the value of unskilled labor. During this same period, immigration quotas reduced the inflow of potential workers from foreign shores to fill this labor vacuum. Clearly, many of today's salient trends such as off-shore manufacturing, inflated costs of domestically manufactured goods, and the huge increase in imports may be explained to some degree by this labor disequilibrium. * Energy

Until the 1970s, the 20th century basked in an abundance of inexpensive oil. As the world's largest consumer of this form of energy, the U.S. not only had the luxury of large domestic resources but also had favorable relations with nations with even greater reserves. Our consumption norms were rooted in a seemingly bottomless barrel, and energy availability was a non-issue in most industrialization discussions.

The '70s brought profound change in our attitude toward oil. We woke up one day to find that the energy barrel did have a bottom and that a portion of the world unknown to many of us could not be counted on to help keep the barrel filled. One aspect of the energy crisis was to slow down and, in some instances, halt forever the production wheels of our industry. As a society, we found that we could do without some things, derive greater utility and longer life from others, and generally become more discriminating regarding the level of efficiency we expected from energy-intensive production. Now, almost two decades later, we can see that many production settings that were highly dependent on fossil fuels have become considerably more efficient. They have shifted to other forms of energy or have packed up and moved to foreign shores to take advantage of cheaper labor. * A World Economy

The '70s brought a need to recognize and understand the global nature of business activity, in contrast to the pre 1970s notion that the U.S. stood alone as a world political and industrial power.

The energy shortage and the increasing presence of developing nations in Europe, Asia, and South America helped make us aware that we were hardly alone in the world. Since then, the evidence has become increasingly convincing, and today we must admit our dependent status as a world nation.

Not too long ago, political or economic actions taken by a third world country thousands of miles from U.S. shores was of little consequence to business in this country. However, today the devaluation of a currency or a struggle for political control in even the most remote of countries may be watched with keen interest by the management of a Fortune 500 company and may require dramatic and timely action by the company's management team. * The Knowledge Worker

Twenty years ago Peter Drucker pointed out the importance of a new breed of worker who would replace the skilled worker as the most valued member of the work force. "Knowledge workers" were employees who were valued not for what they created with their hands but for what they created with their intellect (Drucker, 1968). Drucker's prediction became increasingly true in the 1970s. Technological developments, advancements in science, and the rising educational level of our society have placed the knowledge worker at the center of most business activity today.

The transformation was that skilled and unskilled workers would no longer hold the preeminent positions in U.S. business and would be replaced by workers with intellectual abilities. Symptomatic of this transition has been the plight of blue collar unions, whose membership peaked at 9.5 million in the late 1960s. However, for a variety of reasons including the deemphasis on domestic manufacturing during the 1970s this membership figure has slipped to 8.5 million. During this same period white collar unions representing professional and technical employees have grown substantially (Sikula & McKenna, 1990 pg. 243). * Level of Competition

In retrospect, it seems clear that the first seven decades of this century presented comparatively modest business challenges. Only recently have we come to understand how difficult practicing business can be and the true meaning of "competition."

Many U.S. industries that grew to world class stature during the 1900-1970 period--automobiles, steel, apparel, the air lines--failed the test of the seventies. In each case these industries floundered, lost market share, and perhaps failed when faced with challenges from foreign manufacturing, deregulation, labor and energy shortages, and obsolete technology.

Today's case books on business strategy are replete with examples of one time highly successful businesses that were never really tested for the first forty or fifty years of their history. These corporations enjoyed largely favorable conditions such as general economic growth, benign regulatory control, and limited competition. The 70s presented a far less favorable scenario for many of these businesses; failures, retrenchments, and extensive reorganizations have been the watchwords of recent years.

Management in the 21st Century

We now turn to the highest risk portion of this paper: speculation about what managers will be managing at the beginning of the 21st century. This risk is associated with the knowledge that this period will undoubtedly take on a character which may bear only a slight resemblance to the past. With this caveat, the following is offered as an "informed guess." * Managing in the Future

In recent years we have seen new industries created and others lost forever through legislation, new product development, and technological innovation. In such cases, the past may be of only minimal value in establishing strategy for the future performance of the enterprise. If the past no longer guides managerial decision makers, then they must rely on new information and speculation regarding the future for their strategic planning. However, the more important challenge to managers of the 21st century is to pry themselves and their organizations from valueless histories. This must be done even when the past represents highly successful products, procedures, and personnel. Managers will have to recognize that the very aspects of their businesses that produced so well for them in the past may actually be negatives in the future; they may need to abandon formerly successful methods and areas of operation.

In a sense what is being advocated is a form of "zero-based" management. This view of management requires regular re-evaluations of programs, products, people, and budgets within the context of the organization's future direction. If longstanding methods and budget allocations are found to be superfluous, then it is management's responsibility to make sure resources are re-directed to new ventures and challenges which will assure the future of the business.

In his recent book, Thriving on Chaos, Tom Peters (Peters, 1988) echoes a theme suggested by Peter Drucker over twenty years ago (Drucker, 1968). Both authors present convincing evidence for the idea that managers must become more effective administrators in uncertain environments. The true test of the manager will be his or her track record in increasingly fluid political, social, and economic times. * Management of Technology

In 1971, Toffler alerted readers to the implications of rapid advances in technology in general and industrial technology in particular (Toffler, 1971). As mentioned, improvements in production technology were critical aspects of our society as it industrialized; and technological innovation is now accepted without question.

As the 21st century approaches, there are considerably more reasons to take Toffler's concern to heart. In recent decades, technological advances have acquired the capacity to change the course of human society. Such new scientific and commercial ventures as genetic engineering, nuclear energy, and medical and communications advances all have the potential to reshape the course of our society and its institutions. The new course may solve or prevent debilitating social problems or produce devastation. We must realize that managers will not necessarily be able to fully understand the ultimate impacts of these technological advancements. However, at a minimum they should question their application within their own organizations and also their value of society. Such efforts will certainly require managers to play a dramatically different role than that of their earlier counterparts. Placing conscious limits on technological development and application may, in the short-run, translate into compromises in efficiency and profitability for the institutions they are administering. * Management of Growth

Like technological development, growth has been historically viewed as a hallmark of a successful business. We should remember that this attitude developed during a period of substantial economic growth in our country. Since the 1970s, we have seen reports of slowed growth, declining productivity, and even retrenchment among certain U.S. businesses.

While almost limitless industrial growth was a norm during most of this century, more structured, consciously planned, and controlled growth may be required in the next. The nature of this growth will be a critical question for managers. These individuals will need to understand that, as in human development, some business growth is muscle and contributes directly to the institution's ability to perform, while other forms are simply fat and in the longer run add little to performance. Finally, our manager will need to recognize that a third form of growth is cancerous and detrimental to a healthy organization.

In some instances managers will need to consciously limit and even reverse the growth of their businesses to assure both the short- and long-term prosperity of the organizations entrusted to their care. * Management of Information

Possibly one of the major challenges to the manager of the 21st century relates to the management of information--often viewed as an infinite organizational resource.

Managers in coming decades must appreciate their roles as information brokers. They will stand directly between vast depositories of valuable information and their organizations. It will be their responsibility to select the appropriate new sources of information to aid the decision-making processes, and also act as information gatekeepers, deciding which information is valuable to their organizations and which is peripheral. Finally, these managers will need to be concerned with the access, storage, and presentation of complex but crucial data. It is simply not enough to bring forward valuable information; it must also be presented in such a manner that the medium of delivery will complement, and even enhance, the message.

Clearly, information management in the coming decades will demand the talents of both the technician and the artist. Crafting the proper strategies for information acquisition and delivery systems must parallel shrewd evaluation of this infinite resource.

Final Comments

In Through the Looking Glass, Alice and the Red Queen run at a remarkable pace, but the buildings and trees seem to move right along with them. Finally Alice exclaims, ". . .in our country, you'd generally get to somewhere else if you ran very fast for a long time as we've been doing." The Red Queen exclaims crossly, "A slow sort of country. Now, here, you see, it takes all the running you can do to keep in the same place." As we approach the end of one century and the beginning of another, Lewis Carroll's classic lines take on new meaning in the context of an economic, technological, and political environment that seems to thrive on change. We have, consciously or not, created a society in which the landscape moves by us at a frightening pace and all of our intellect and energy will be needed to keep from falling behind.

This paper is not suggesting that the 1970s was our first encounter with rapid change. Certainly, this country owes its very existence to the fact that its leaders over two hundred years ago were not willing to accept a future that looked like the past. The industrial revolution which ushered in the 20th century also reflected a society that resisted stability. However, we argue that the early 1970s began a critical evaluation of many standards of doing business that have successfully served our institutions for many decades. Since then, our country and its business institutions have faced a radically altered business environment. It is this environment that will demand new theories and practices of management.


Barnard, C. (1939). The Functions of the Executive.

Cambridge: Harvard University Press. Drucker, P. F. (1968). The Age of Discontinuity. New York:

Harper & Row. Peters, T. J. (1988) Thriving on Chaos: Handbook for a

Management Revolution. New York: Harper & Row. Peters, T. J. & Waterman, R. H. (1982). In Search of

Excellence: Lessons From America's Best-Run

Companies. New York: Harper and Row. Raymond, H. A. (1986). Management in the Third Wave.

Glenview, Ill: Scott-Foresman Sikula, A. F. & McKenna, J. F. (1984) The Management of

Human Resources: Personnel Text and Current Issues.

New York: John Wiley and Sons (pg 243). Taylor, F. W. (1911) The Principles of Scientific

Management. New York: Harper. Toffler, A. (1971). Future Shock. New York: Bantam

Books. Note: An earlier draft of this paper was presented at the

Western meeting of the Academy of Management,

Spring, 1986. Dr. John F. McKenna, Professor, California State University, Chico, has published numerous journal articles and conference papers, contributed chapters to textbooks, and written a text on human resource administration.
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Author:McKenna, John F.
Publication:SAM Advanced Management Journal
Date:Sep 22, 1991
Next Article:Productivity improvement: changing values, beliefs and assumptions.

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