Ever wondered why it is so difficult to implement a networked team structure in a traditional business enterprise? The standard reporting hierarchy seems to spring back into place regardless of the number of times you have explained the need for flexibility and agility and rolled out the new arrangement.
Ever wondered why innovation is delivered so painfully when midwifed by helping hands from a corporate bureaucracy? Even brilliant babies, conceived and delivered outside the stultifying confines of large organizations, suffer from high infant mortality rates once brought into the suffocating clutches of a corporate behemoth.
Ever wondered why talk of stakeholder management rings hollow regardless of the stature of the corporate chieftains shouting it?1 Sceptics realize that every established system in the company and amongst its shareholders will create roadblocks as soon as you leave the well-trodden path of profit maximization.
Wonder no more. Like Newton, our answer too involves a tree and a falling apple but goes one better by observing the fallen apple doesn’t go far from the tree on which it grows. The way in which we practice leadership and management in organizations today has a lot to do with the parentage of today’s large commercial enterprises. Unless we can unravel this history, we shall not know why we feel uneasy in trying ways of managing that are essential for the new realities we face and revert to the atavistic responses we have inherited as soon as the new methods meet with the slightest resistance.
There are many glimpses of history that we could use to illuminate why we organize business enterprises the way we do even though our reliance on outmoded mental models and methods cost us dearly. For instance, I never tire of teasing my friends in Marketing that their function has not added much to the idea of fair pricing since the time of St. Thomas Aquinas3 in the 13th century. Even earlier (in fact, before the turn of the last millennium) were the contributions of Muslim scholars to the bookkeeping systems we use in Accounting today. Not to be outdone by other root-diggers, we Indians can trace everything worthwhile in management (and in a host of other disciplines besides) to Kautilya’s Arthshastra. There is, indeed, an endless stream of such origin-connects that we could identify and pursue profitably. Such history "… shows the forces which have fostered the growth of what today are problems … Management, without a broad knowledge of industrial history, is apt to be impressed only with the vivid colors of the present."5
Regardless of the task to be undertaken, whether it is a hunter-gatherer group downing an antelope in the savannah a hundred thousand years ago or a huge corporate entity marshaling the productive efforts of tens of thousands today, there is just one portal for successfully entering the arena of cooperative human endeavor. At its apex is the manner in which an organization makes its decisions. The pillars supporting the arch are the effectiveness and efficiency of the work design on one side and, on the other, the principles governing the distribution of the fruits of the endeavor’s success. Most of today’s organizations have inherited the way they do these three from a forgotten ancestry. Being unaware of their origins makes it that much more difficult to escape from the vice-like grip they have on the way we do things. Yet, free ourselves we must as we face a turbulent and fast-changing world that will penalize us for anachronistic practices with survival-threatening costs. Moreover, unloosening their hold will give us practice and confidence in shaking off other barnacles slowing the pace of organizational transformation.
Chains of command – and servitude
For centuries, monarchies (and, in a few cases, extreme oligarchies) were the only working models for organizing and controlling people on a large scale. It is not surprising then that when commercial enterprises grew vastly in size, the same strict, authoritarian, single (or limited) person rule should have been the preferred way of managing rather than experimenting with any more participative or familial pattern. Starting several centuries ago, most countries have by now moved away (at least in theory) from monarchical absolutism, in many cases with violence directly proportionate to the degree of absolutism that had prevailed. However, authoritarian regimes continue to flourish outside of the political domain. When we look for organizations that approximate most closely today to Filmer’s ideal of respect for the divine rights of rulers,6 we find the corporate world has more than its fair share of determined despots.
Even more impactful on the culture of large commercial organizations is military influence on how they were structured and run. The Multi-divisional (M-form) organization that characterizes most large business enterprises today, owed its origin to7 (or shared its parentage with8) the structure of Napoleon’s army corps, as learned by military graduates at West Point, some of whom landed up managing large railway companies in the US in the 19th century. While blindly following the M-form has its own problems (particularly in managing international operations), its impact is not as pernicious as the absorption of the military’s culture of unquestioning obedience to orders and the strict observance of the chain of command. Perceptive observers have recognized the disastrous consequences this can have within the military itself – most legendarily captured in the story of the Light Brigade’s charge during the Crimean war. While fatalities may be less in the commercial world (other than to the life of the firm) the consequences of questioning authority can be no less career curtailing. Surely this description from Dixon’s 'On The Psychology Of Military Incompetence' sounds familiar to many of us: "A hazard of belonging to any rigidly authoritarian hierarchical organization is that, from time to time, the individual, out of dire necessity or from strong personal conviction, feels compelled to apply pressures to those above him. It is a hazard because the ethos of the organization … demands that pressure always moves in one way only, downwards rather than upwards. To buck the system, by prodding those above, can have unpleasant consequences."9
Unfortunately, what traversed across domains was not the genius of generalship (rare as that might be even in the armed forces) or the courage, fortitude, and presence of mind displayed by individual soldiers and officers. It was the rigidities of military command, with its insistence on 'obey first; ask questions – never', that were the easiest to transmit to and retain in the world of business. Ironically, modern militaries themselves have moved on from their sole reliance on rigid hierarchies in recognizing the need for more flexible structures as they face the asymmetric battle conditions of tomorrow.
A rarely mentioned part of corporate management’s Calibanish ancestry is the Sycorax of slavery. As Bill Cook points out "ante-bellum slavery is demonstrated to have been managed according to classical management and Taylorian principles."10 The Scientific Management credo, that thinking should be left to managers, "was specified thus: '[t]he slave should know that his master is to govern absolutely, and he is to be obey[ed] implicitly . . . he is never for a moment to exercise either his will or his judgment in opposition to a positive order' "10 Change a few words and you have the operating philosophy of many large-scale users of people and the precariat today.
Business enterprises in India have had to cope with another overlay: that caused by colonial rule during the formative years of modern Indian industry. Here too, the railways were among the first large private sector employers but, apart from the osmosis of military as well as plantation structures and the unquestioning obedience they bequeathed, came the deference due to the white man. I have referred to this racial divide in the context of affirmative action earlier in this column.11 "Many of the most lucrative commercial, financial, business and plantation jobs in the modern sector were occupied by foreigners… Even in the Bombay textile industry, where most of the capital was Indian, 28 percent of the managerial and supervisory staff were British in 1925 (42 percent in 1895) and the British component was even bigger in more complex industries.''12 Post-colonial Indian senior managers found it only too convenient to slip into the lavish lunch rooms, cushy clubs, and deferential demeanor of subordinates that the white overlords had created for themselves.
It is not as if voices haven’t been raised before our time against the monarchical-militaristic, voice-from-up-above way of leading. It surprises me enormously that in the midst of our gender awareness, which props those with the slightest achievements to star status, we ignore a woman who was one of the greatest intellectual giants of enlightened management practice: Mary Parker Follet. As her biographer put it: "Without the benefit of modern research methods, Follett developed such original, penetrating analyses of leadership, power and authority, conflict, and group behavior that her ideas form the basis of much of our modern discourse about organizations and management… Warren Bennis, at the University of Southern California, is even more emphatic: 'Just about everything written today about leadership and organizations comes from Mary Parker Follett’s writings and lectures.' "13 Speaking about power nearly a century ago Follet was very clear: "… [I]t seems to me that whereas power usually means power-over, the power of some person or group over some other person or group, it is possible to develop the conception of power-with, a jointly developed power, a co-active, not a coercive power. In store or factory, I do not think the management should have power over the workmen, or the workmen over the management."14 And again: "The ramifications of modern industry are too widespread, its organization too complex, its problems too intricate for it to be possible for industry to be managed by commands from the top alone."15
Unfortunately, corporates still find it easier to follow the Field Manual for Infantry Drill than they do Follet.
You will be told the best way
The lineage of a single best way of doing things is even more ancient than the conviction that we covered in the previous section (that all commands from the top must be obeyed instantaneously). While the latter derives from the divine rights of monarchs, the former is a demand of divinity itself. However, even before societies started upsetting monarchical authority, brave individuals had started asking whether there was just one best way prescribed by God and, if so, whose God had the single best answer. We saw authoritarian rule has continued in corporations long after nations abandoned it politically. The matter is no different when it comes to top management reserving the right to prescribe the sole path and suppressing dissent (and if baby innovation gets flushed with the questioning bathwater, so be it!). Just as obedience to the authority provided fertile soil for military ways to flourish in traditional business organizations, belief in the chosen way was rich manure for the Scientific Management movement.
Frederick Winslow Taylor did not intend to create a movement that would be inimical to questioning and grass-root innovation but the way his 'scientific design of tasks' was taken forward in industry after industry and country after country, it clearly had a chilling effect on workmen thinking for themselves and expressing disagreement when they wanted to. ."[T]he right person for most of the non-managerial jobs Taylor designed was someone with limited imagination, boundless patience and a willingness to do the same repetitive tasks day in and day out."16 A perfect descriptor of Chaplin’s 'Modern Times' – or countless call center, mass production and delivery jobs in India today! Though not derived directly from Taylor, Alfred Krupp exemplified this zeitgeist in Germany when he wrote the General Regulations for his employees with the intent that "no case should occur for many years, for a century, which has not been foreseen in this compilation."17
Once again, it’s not as if Taylor had no critics as soon as his task dissection and prescription method started racing across the US and then the rest of the world. Harrington Emerson, to name just one, believed "… that standards should never be cast in stone: they should alter as circumstances dictate, as new technology becomes available or as workplace conditions change... Standards are there for guidance, not as challenges or methods of compulsion."17 Understandably, the criticism expressed by Samuel Gompers, the founder of the American Federation of Labour, was even more barbed. He felt Taylorism robbed workers of meaning and satisfaction in their work and "transformed them into … 'high speed automatic machines' that were … 'a cog or a nut or a pin in a big machine' "17 Unfortunately, the Taylorism tide was far too strong for these wavelets of opposition. Matters reached such a pass that when innovation had to be genuinely nurtured, it was protectively tucked away from the yours-not-to-question-why atmosphere of the larger corporation into a skunk works.18 This is also why larger corporates have to acquire rule-free start-ups to keep their pipelines filled with brilliant ideas. And why the plants in those hothouses of innovation wilt and die as soon as a know-all HR leader from the acquiring giant decides to extend its standards and procedures to the acquisition.
After a brief flirtation with Kaizen (which, admittedly, did result in lasting marriages in some cases) the tendency even today is to turn to a consulting firm (with claims of access to international best practice) for obtaining the best way to run a process. It is seen as the quicker path rather than training and encouraging people to think for themselves and waiting years for incremental but durable improvements to bring up productivity. And in any case, with growing contractualization, is there a durable core available for training anymore?
Re-framing the portal to collective endeavor
Peter Drucker wrote: "If you want something new, you have to stop doing something old." This column has identified the origins of two assumptions that have outlived their usefulness. This is a necessary prelude to excising them.
Observant readers will have noticed that still leaves out one part of the portal identified for renovation. Readers with good memories will recall, however, that the sacralization of shareholder returns had been critiqued in a previous column.19 The same column sought to give 'people happiness' pride of place instead.
The one-size-fits-all legacy of Scientific Management has also been rebutted in several previous columns. Perhaps the best replacement pillars are contained in a recent column on job enrichment20 and a previous one on craftsmanship.21
That leaves what, in many ways, is the greatest challenge, demanding the most revolutionary recast: the way we take decisions. For too long has the monarchical model held sway in corporates – far after it has been scrapped in most other social agglomerations. That monumental change to the keystone of the management portal demands at least a column to itself. Wait for it.
- David Lazarus, CEOs say they care about customers and workers. Propaganda experts are unimpressed, L A Times, 21 August 2019.
- Daryl Koehn and Barry Wilbratte, A Defense of St. Thomas Aquinas’ Idea of the Just Price, Business Ethics Quarterly, July 2012.
- Sherif El-Halaby and Khaled Hussainey, Contributions of Early Muslim Scholars to Originality of Bookkeeping System, Corporate Ownership and Control, January 2016.
- Dr Balakrishnan Muniapan, Kautilya’s Arthashastra and Perspectives on Organizational Management, Asian Social Science, January 2009,
- Oliver Sheldon, The Philosophy of Management, Routledge, 1924.
- Peter Laslett (ed.), Patriarcha and Other Political Works of Sir Robert Filmer, Oxford, 1949.
- Philip A Talbot, Management Organizational History – A Military Lesson, Journal of European Industrial Training, July 3002.
- Keith Hoskin, Richard Macve and John Stone, The Historical Genesis of Modern Business and Military Strategy: 1850 – 1950, As submitted to Interdisciplinary Perspectives on Accounting Conference, Manchester, July,1997.
- Norman F Dixon, On The Psychology Of Military Incompetence, Pimlico, 1994.
- Bill Cooke, The Denial of Slavery in Management Studies, Journal of Management Studies, 40:8, December 2003.
- Visty Banaji, There is an Elephant in the Room- And the Blind Men of Indostan Can’t See it, 26 September 2018.
- Angus Maddison, Class Structure and Economic Growth: India and Pakistan Since the Moghuls, Routledge, 2010.
- Joan C Tonn, Mary P Follett – Creating Democracy, Transforming Management, Yale University Press, 2003.
- Mary Parker Follett, Dynamic Administration: The Collected Papers of Mary Parker Follett, Martino Fine Books, 2013.
- Mary Parker Follett, The Process of Control, in Luther H. Gulick and Lyndall Urwick (eds), Papers on the Science of Administration, 1937.
- James Suzman, Work: A History of How We Spend Our Time, Bloomsbury Publishing, 2020
- Morgen Witzel, A History of Management Thought, Routledge, 2011.
- Michal Biron, Helen De Cieri, Ingrid Fulmer, Cai-Hui (Veronica) Lin, Wolfgang Mayrhofer, Margarita Nyfoudi, Karin Sanders, Helen Shipton and Jian Min (James) Suni, Structuring for innovative responses to human resource challenges: A skunk works approach, Human Resource Management Review, May 2020.
- Visty Banaji, HR’s business should be happiness raising, 24 September 2019.
- Visty Banaji, "If you want people to do a good job, give them a good job to do", xxxx, 24 June 2021
- Visty Banaji, In Praise of Craftsmanship: Past Perfect – Present Imperfect – Future Tense, 8 June 2018,