The Values of Twentieth-century Management

The Values of Twentieth-century Management

The values of twentieth-century management bureaucrat

There is a big difference between the values and motivations of the nineteenth-century entrepreneur and the twentieth-century management bureaucrat. The entrepreneur was intent on winning his fortune; today's management bureaucrat seeks to discharge the duties of his office.

The attitude of modern managers toward profit is markedly different from that of the entrepreneur of yesteryear. The separation of ownership and control in the large company has given managers a good deal of autonomy. They have been freed from the necessity of pursuing profit single-mindedly in the stockholder's interest. Now they can emphasize other objectives such as their own prestige; the leadership of the company in the industry; and the welfare of employees, customers, and community. Goals associated with the ethic of social responsibility have come to occupy almost as important a place as profit in the objectives of some corporations. Many top managers behave as if they believe that they and their companies are responsible for many of the social and political problems of modern industrial society. Of course not all top managers accept or even comprehend the idea that b lie accountability is part of the modern responsibility of business, but the trend is definitely in this direction.

Most managers still cling in thought to the profit ethic despite the trend toward social responsibility in their behaviour. The legitimacy of profit is a central article of the UK business creed.14 The free enterprise system is a profit system, it is argued, and to question profits is to attack the system. The creed defends profit on the ground that profit recipients deserve what they get because they perform a valuable service to society. Profit, it is claimed, fulfils a necessary social function which otherwise would not be performed so well or so cheaply. The primary justification of profit is that it is earned by giving customers what they want in freely competitive markets. Underlying this view of profit is the assumption that the firm performs only an economic function and that the job of management is to see that this function is performed efficiently. Profit is thus an objective measurement of the firm's efficiency in allocating resources. Managers see themselves as decision makers who are highly rational, realistic, practical, and "hard-boiled." They resist any suggestion that the firm performs noneconomic functions which call for decisions that cannot be made on the basis of the profit ethic.

Thus there is a gap between business practice and business ethics. Most managers claim to accept the profit ethic and to reject the social responsibility ethic. Yet their behaviour departs significantly from profit maximization in the direction of social responsibility. The gap between business practice and the ethical beliefs of managers is the cause of the moral crisis of management.

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