Classical Management Foundations for the Future of Management Education

1. Classical Management Foundations for the Future of Management Education Ellen S. O’Connor, Ph.D., M.B.A. (ellensoconnor@gmail.com) Philosophie & Management (www.philoma.org) Brussels, June 23, 2014

2. Chester Barnard 1886 - 1961 Mary P. Follett 1868 - 1933 What must bedone? 3. Build on this knowledge 2. Understand Why it was forgotten 1. Recover forgotten knowledge

3. Industrialization & the new organizational form • Unlike familiar forms (church, state & military) • Relating to (discovery) & applying basic science (exploitation) • Converting to scale reliably & continuously (formal organizing) • Spreading quickly

4. More artificial More fictitious New organizationalform More complex More ephemeral Potentially generating massive wealth Potentially Very large scale

5. Education gap for the new industry • “Business” schools: Clerks • Colleges: Gentlemen • Scientific schools: engineers Wealthyindustrialists look for new institutions

6. Accelerating factors Pennsylvania state militiafires 1877 Injunctionsagainstunions 1877 Panic of 1873 1879 Credit mobilierfraud 1870’s Great railroad strike 1877

7. First Collegiate school of business curriculum Modern industry requires us to organize under single leaders… great amounts of capital & numbers of laborers The fruits of organized labor must be properly divided among capitalist, leader & workman The importance of educating men to combine their energies for the accomplishment of any desirable object, and the principles upon which such combinations should be effected Joseph Wharton 1826 - 1909

8. Instillnew values Wharton’s agendas Teachnew subjects Makenew discoveries

9. Regimentation Decentralization New organizationalform (deeper) Uncertainty Suboptimization

10. New organizational form’s consequences • New individual, collectivity & interdependencies • New knowledge But no institutional support for generating & growing that knowledge

11. Missed opportunities: the 4 crises 1890 New York University College 1948Carnegie Graduate School of Industrial Admin. 1881Wharton Collegiate School of business 1919 Harvard Business School

12. Comprenhensiveknowledge transfer(Barnard & Harvard in 1930’s-40’s); Simon’s seminars on Barnard in late 40’s) The Classics’ contribution Generaltheory of organization Barnard (1938) Basic science ofcollective value(s) creation Follett (1924)

13. Exertingcentripetal force The Classics’ Key managerial roles Securingcreative contribution of all Building aninterdependence culture

14. Agenda: Short-Term Wealth Maximization • Microeconomics • Corporate strategy • Shareholder value theory • Neoclassical economics No pursuit of problems & solutions identified by classical management

15. Next steps? • 3. Build on classical management theories & findings • Research • Rigorous testing • Living case method • 2. Understand why it was forgotten • Developing historical sensibility • Recover forgotten knowledge • Educate educators

16. Classical Management for today A workshop Ellen S. O’Connor, Ph.D., M.B.A. (ellensoconnor@gmail.com) Philosophie & Management (www.philoma.org) Brussels, June 24, 2014

17. Purpose of management education Develop members & leaders of formal organization who master the tool of organization, in pursuit of individual & collective value(s) creation at the highest level, continuously, and in the long run

18. Need for a higher-order institution with the knowledge to provide that education • Develop members and leaders of formal organization who master the tool of organization, in pursuit of individual and collective value(s) creation at the highest level, continuously, and in the long run. • This calls for a higher-order institution with the knowledge to provide that education. Need for a consensus on • Vision • Terminology • Tested & proven findings

19. What We Know So Far Names & titles Historical figures Living insights Key findings Educational experiments

20. “Failed” educational experiments: the 4 crises 1890 New York University College 1948Carnegie Graduate School of Industrial Admin. 1881Wharton Collegiate School of business 1919 Harvard Business School

21. Follett (1868-1933) Taylor (1856-1915) Fayol (1841-1925) Wharton (1826-1909) Barnard (1886-1961) Donham (1877-1954) Rowntree (1871-1954)

22. Key findings Key Findings Core knowledge grown piecemeal in a small group of scientifically & developmentally minded executives Science based on individual experience “in the physiological condition of personal responsibility” in formal organization Business schools: so far organized to serve academic & technical specialists

23. Comprenhensiveknowledge transfer(Barnard & Harvard in 1930’s-40’s); Simon’s seminars on Barnard in late 40’s) Living Insights (key classics’ contributions) Basic science ofcollective value(s) creation Follett (1924) Generaltheory of organization Barnard (1938)

24. Discovery v. Exploitation Centrifugal v. Centripetal Management Value(s) creation pivot multiplier, in pursuit of creative tension betweenconflicting forces (sensedwithin) Individual v. Group Individual v. Regimentation Freedom v. Subordination Contributing v. Witholding

25. The Conflicting and Creative Forces Discovery v. Exploitation Centrifugal v. Centripetal • Organization: Centrifugal v. centripedal • Organization: Discovery v. exploitation • Organization: The individual v. the group • Individual: Individualism v. regimentation • Individual: Freedom v. subordination • Individual: Contributing v. withholding Management Value(s) creation pivot multiplier, in pursuit of creative tension betweenconflicting forces (sensedwithin) Individual v. Group Individual v. Regimentation Freedom v. Subordination Contributing v. Witholding

26. (re)invent purposes (re)invent moral codes Executivesexert centripetal force integrate internally integrate externally incarnate through ownperson (Subordination, predictability & sincerity)