The traditional economic model of business operations seemed to have indeed served business well – up until recent times at least. Businesses and their managers needed to make no apology for their ‘profound’ roles in bringing economic prosperity to many parts of the world, or so we thought. All seemed well until everything went bust post 2008 (Global Financial Market Crises, Enron, WorldCom, Freddie Mac, Fanny Mae et al); leaving many asking what in the world went wrong with the system.
One realisation which remains clear from the experiences of the last few years, and more so against the backdrop of today’s dynamic global socio-economic context, is that businessmen aren’t going to solve tomorrow’s problems with yesterday’s celebrated theories!
Enter the traditional perception of management which has long held sway: “The ‘process’ of working with and through individuals and groups and other resources (such as equipment, capital and technology) to accomplish organisational goals. This definition applies to all forms of organisation. The management function involves planning, organising, motivating and controlling…”
As fundamental and valid as such approach to defining management is, it has, however, become clearer at this time than ever before that a paradigm shift in the approach to management as a discipline, and management education especially, is urgently needed – if at all the discipline of management is going to continue to be reckoned with as capable of driving sustainable institutions going into the future.
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Apparently, many companies around the globe have responded to the attendant consequences of the economic crises by now resorting to the practice of updating written codes of conduct as a result of past corporate scandals. It is not uncommon for many a company to make it a point of duty to conscientiously update this document on a yearly basis.
However, inasmuch as managers must follow the same codes of conduct as employees, it has become clear that they have additional obligations, especially as role models for the organisational rank and file.
Particularly in the developing world, which forms the context in which I have situated this, one is greatly appalled at the extent to which the debased nature of ethics in business and public management remain starkly manifest. In recent time, in Nigeria, the private sector, which seemed to have successfully retained its ‘sanctity’ for so long, has finally also taken a hit, having had its fair share of compromise, particularly with such developments as the deplorable accounting irregularities which forced Cadbury Nigeria in 2006 to restate its financials and subsequently culminated in the sanctioning and eventual dismissal of key executives who had hitherto been celebrated and hailed as leading lights, captains of industry, astute managers. As a matter of fact, the indicted CEO had only the year before been named by PwC as the country’s most respected CEO, after a keen contest!
Coming shortly on the heels of the shock and outrage which greeted the Cadbury scandal was the banking crises of 2009, which saw five equally celebrated bank CEOs jailed and their institutions left to be bailed out by the CBN, while the fortunes of many hapless investors plummeted to all-time lows.
From a public sector perspective, one only needs to witness the extent of infrastructural decay despite previous years of massive investments to realise what the real cost of corruption and managerial ineptitude is to our society.
Again, in most parts of Africa, rife corruption across the breadth of the public and private sectors has virtually held the market hostage and, as a scholar put it recently, “removed its freedom and hand-cuffed its unseen hand (a la Adam Smith’s familiar coinage)”.
At this juncture, against the backdrop of all the foregoing, a sceptic is wont to rhetorically ask: in all of these, what has been the role of managers? Really, what has management been good for after all?
In attempting to proffer an answer, I believe that this is where the emphasis on a new managerial paradigm comes to the fore. It is right at this juncture that we need to clearly delineate the traditional notion or perception of management which has long held sway from the new management paradigm which pathfinders like Peter Drucker and Charles Handy have advocated and tirelessly championed to see instituted. I believe the unfolding of events on the global scene has invariably vindicated these gentlemen.
Viewed against the backdrop of the massive upheaval in the global economy, now and going forward, I opine that the management function will be looked upon to rebuild the eroded trust which stakeholders had in institutions such as government and business organisations. This essentially boils down to one key realisation, which is that managers will necessarily need to re-shape their values as custodians of trust within the contexts of both private corporations and, importantly, public service – ethical professionals to which customers, shareholders, investors, employees and indeed a multitude of other stakeholders can look up to again and endow a privileged trust.
To this end, a very fundamental, important and defining lesson which managers will have to re-learn in these trying times is that business organisations no longer exist for the sole purpose of making profit for shareholders alone. The ideal organisation is that which has a social purpose for which profit-making is essentially the by-product of fulfilling a larger social purpose.
In effect, a good company is not one which posts bumper profits celebrated by managers despite the fact that it harms the larger interest of other stakeholders and general societal welfare. From this new perspective, an ideal company would be that firm which is able to balance the interests of all of its stake-holding groups of customers, shareholders, the state and its expanded publics.
Tomi Ogunlesi
