The decline of Anglo-American management

2009

The current crisis of confidence in the business world demonstrates not just a problem with the financial underpinning of economies, the ghosts of money that have been propping up growth, but the limitations of our ideas about how business should be managed.

Management is a whole new area of thought, and it still has a long way to go to reach maturity. We may think that the current dominance of the Anglo-American model of business represents the "end of history", that we have found the best or most effective way to run organisations, but this idea is yet to be properly tested.

The failure of the Anglo-American model so far has been its inability to engage with the bigger and broader issues of governance of a business operation. Everything is toolkit-based, focused on the specialist activities of hr, finance, marketing etc, in order to increase efficiency and maximise financial benefits.

What's needed from people within organisations – particularly now, when faced by threats to the existence of firms – is an ability to take more of a holistic view of what the organisation is, and how it should be run.

The future will see alternative ideas coming through from other cultures which will challenge and change. And the changes will have major consequences for hr in its role of developing, motivating and acclimatising people to different organisational cultures.

For example, there is the legal, contract-based nature of all business activity in the UK. In the Middle East and parts of Asia it is more common to have commercial relationships based on trust, without any form of written contract. The role of human dynamics, of person to person trust, a positive and mutual respect, is seen as being more powerful than any piece of paper and the accompanying threats.

The amazing success of the micro-credit organisations in Bangladesh are a good example of this, where small amounts of money are loaned to huge numbers of customers. Or there's Africa's "merchant ladies" who travel around communities providing loans to local businesses when they need them.

In these schemes, quite unlike in our own banking system, the default rate is very low, because the contact and operation is local, there is a personal element involved.

In contrast, how much of an outpouring of support and sympathy has there been for our banks? The combination of large organisations which are based on genuinely local relationships and trust could make a big difference to the nature of business.

China will also emerge as a leader in contributing new ideas. However much the country may have seemed to have fully embraced capitalism, its philosophical approach is basically different, emphasising the importance of the collective over the individual. China has always had doubts, for example, about how banks operate and the role of bonuses.

A South African business school has already begun to try and prick the bubble of managers, who often come from privileged backgrounds and with fixed ideas. Part of their development involves learning from prisons and townships about real lives, rather than treating communities purely as markets.

In the noise and hurry of the rush to efficiency and maximisation of profit, the idea of what business is for and its place in society has been lost along the way. While Adam Smith is seen as the father of capitalism and the benefits of the free market, it's usually forgotten that his real interest and preferred work was in moral philosophy, where he insisted on the crucial role of social relationships and ethics as a pre-condition to there being any advantages from capitalism.

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About The Author

James Fleck
James Fleck

James Fleck is the Dean and Professor of Innovation Dynamics at the OU Business School in the UK. He has achieved a substantial research reputation in the analysis of technological development and the management of innovation and knowledge.

Older Comments

What goes around comes around!

The decline of the US has been around for some time. How can a country survive with a 'central bank' system like what is operating in the US. Have I falsely thought the incoming President may remedy this outlandish situation but hen he appoints a member of the Federal Reserve to his inner circle????

When can too much greed be barely enough?

For a more informed explanation of why the US will relinquish its period of leadership to the BRIC countries just look at 'the MoneyMasters.com' and 'MoneyasDebt.com' and understand how the New World Order will get into power by people who will remain ignorant all their lives and by good people doing nothing.

The most worrying after seeing this presentation is the formation of the European Union along with the Euro falling into the hands of just what they (The New World Order') want so they control domination of all peoples.

One can only make decisions based upon what knowledge one has at one's disposal so it would stand to reason that the more education one receives the more informed decision one can make for the whole and betterment of mankind.

Socrates said The less I know the more certain and precise I can be in my decisions. The more I know, the more I realise the limitations of being certain and precise.

John

john sheeran Australia