Week 1
Chapter 1: management in context
Management practices influence and are influenced by their present context. A profession is an
occupation that serves society and the world, whereas a professional practice serves society and
the world in professional conduct. Unprofessional practices and practicing unprofessionally have
the potential to do much harm. For this reason most professions have a professional conduct.
Professional management requires both to be carried out in service of society and the planet, and to
be carried out with professional conduct.
1. Old-world management: unprofessional old-world management practices at best ignoring,
but more often contributing to a world in crisis and upheaval
2. Transition-world management: innovation of professional management practices addressing
the world’s pressing issues, often in conflict with old-world management practices
3. New-world management: management has ousted old-world management practices and
become a profession in service of a slowly re-stabilizing world
Richard Arkwright is often credited to be the management innovator who invented factory
production -> machine-aided flow production: the item flows through the production process while
being transformed into the end product. This broke with past production by skilled craftsmen.
Factory production centres on division of tasks that require only lowly or semi-skilled workers ->
influx of low-skilled workers worldwide. This innovation was in a way the invention of modern
management itself, as factory production required supervision of semi-skilled labor by a manager.
Factory-produced goods boosted global trade as it was required to ship the massive amounts of
goods produced in factories to wherever they were in demand around the world. Factory production
drove down the costs of products -> possibility of consumerism beyond the basic needs of people.
Due to a stable income from factories, compared to the income derived from the previously
dominant agriculture, a sizable middle class emerged, which engaged in consumerism and which
could be influenced by consumerist marketing -> SDG 1,8,10.
On the one hand, without factory production, many of those living middle-class lives might still be
caught in poor living conditions. On the other hand, we would not have today’s overconsumption.
Factory production produced a world with a tension between capitalist and communist systems.
Capitalist practices are centred on the belief in human opportunities for people to work their way up
by accumulating private property and in efficient market-exchange of produced goods by
entrepreneurs. Communist practices aim to free and empower the workers enslaved in factory
production by commonly owned factories, abandoning property and a state controlled exchange of
goods.
Examples of how managerial practices are linked to serious problems we now face:
1. Continuous company growth -> economic system that continuously produces more than the
Earth is able to support while continuing to function as a suitable habitat for humanity
, 2. Consumerist marketing -> unnecessary wants have led people to overconsume, population
increases and an increase in the number of people having money to over consume now
exceed what our planet can support
3. Maintaining growth-consumption requires practices of low-cost production -> need for the
cheapest-possible -> exploitative (ab)use of workers in low-labor-cost countries
4. Take-make-waste production management -> mountains of waste and islands of plastic
waste floating in the oceans
5. Management evaluation practices based on quarterly reporting emphasize short terms and
make long-run sustainable management practices unfeasible
6. Exploiting resources -> collapsing ecosystems and a species extinction crisis
7. Shareholder-value-based management practices give priority to company owners, leading
managers to treat all other stakeholders as being of lower-importance
8. Executive payment practices, related to high-level pay, produce and reproduce economic
inequality
9. Paying women less than men for the same job done maintain gender inequality
10. Strategic human resources management looking for only the best and brightest -> exclusion
from the labor market, unemployment and poverty
11. Globalized supply chain management -> collapse of local industries and their communities
and contributed to climate change
12. Finance and accounting practices centred on financial costs and value create a management
system that at best is ignorant about social and environmental cost an value, and at worst
harms society and the environment
These are examples of old-world management, which are not in the best interest of society and
Earth as a whole. Engaging in these makes a manager an unprofessional manager.
To go through a transition from old-world to new-world management, we need subversive
management that eliminates inadequate management theories and practices and promotes new
theories and practices aligned with the needs of the troubled world we live in. Transitions are
understood as co-evolving processes in economy, society, ecology and technology that
progressively build up toward a revolutionary systematic change. We are now in a transition to
become a force restoring and restabilizing the world -> SDG 10,13,14. This is characterized by
varieties of ethical, social and environmental issues and by a tension between old and new world
management.
Research has identified nine planetary boundaries, which are
ecological thresholds that threaten humanity’s subsistence on
Earth when overstepped (global catastrophes highly likely).
Currently we are overstepping four, including climate change
and species genetic diversity.
Humanity’s global footprint is a way of measuring how much
of our planet’s resources are used for human production and
consumption. Our footprint is 1.75: humanity’s resource
,consumption exceeds the reproductive capacity of our planet. This overconsumption is enabled by
our economic system, which in turn is enabled by our (un)professional management practices.
The Sustainable Development Goals (SDGs) are goals addressing humanity’s social, environmental
and economic issues, developed by the UN. Addressing one or several of those is a step towards
professional management practice. These influence management practice and education.
CEOs often mention that their personal motivation is the main driver for
their companies’ sustainability initiatives. There are three broad change
mechanisms that may be triggered by a change in individual managers or
groups of managers towards truly professional management. First,
managers have the power to change business in their respective spheres of
influence, regardless of their hierarchical position. A frontline manager may
create a sustainable, responsible and ethical bubble in managing her or his
own team. A top-level manager can do the same for the company as a
whole. Secondly, once the business has demonstrated success in
transforming to more professional ways, its industry peers are likely to follow for competitive
reasons. Companies from other industries and ultimately the economy as a whole could also follow
the lead of innovative companies. Third, while the economy is changing, the impact on society of
the overall economic system of industries and single companies becomes visible.
Peter Drucker states that normal ways of doing management have become an institution: the
emergence of management as an essential, a distinct and a leading institution is a pivotal event in
social history. Rarely has a new basic institution emerged as fast as has management since the turn
of this century.
One type of institutional work refers to work that people realize in order to change what is normal,
respectively institutionalized. A second type is to try to maintain the old normal. The third type is to
create new institutions to an entirely new normal (SDG 16,9).
There are four drivers of professional management (SDG 7,13):
1. Main stakeholders (customers, employees, governments and civil society) are increasingly
expecting managers to contribute to society and the world through their companies
, 2. There are many business opportunities in professional management in the service of society
and the planet. Professional management is attractive to employees and customers, and
there is a multi-billion dollar market for sustainable products around the world related to
LOHAS (lifestyles of health and sustainability). Using less resources produces considerable
cost savings. Business case -> lower energy costs, higher competitive threats and new
revenue opportunities
3. With social media and mobile devices, it is impossible to hide unprofessional behavior ->
transparency, otherwise higher brand risks and business improving external rating
4. Professional management practices in service of society and planet are increasingly
institutionalized: expectations around potential legislation/regulators and fines/penalties
5. A gradual convergence of systemic environmental and economic issues, causing more
access to raw materials and higher carbon costs
On the other hand, there are inhibitors of professional management:
1. Profit arguments: the Friedman argument implies that the only responsibility of managers is
to make money (or to improve reputation), thus not spending money on responsible
business activities. One can only contribute to society and the planet in times of high profits
2. Tensions and paradoxes between old-world and new-world management. Management in
service of society and the planet often requires prioritization. The paradox is rooted between
commercial business logic and the professional logic of serving society
3. Stakeholders might accuse a manager of greenwashing when creating a misleading
impression of the social, environmental or ethical performance of a product or company. To
avoid this, professional managers aim to avoid exaggeration and misleading communication
4. Operational inhibitors: lack of managers’ professional management skills, difficulties to
engage with external groups and high complexity in integrating professional management
practices throughout all business functions
5. Ongoing economic crises
6. There is an argument that sustainability is only applicable for large corporations, already
developed nations, and end-consumer businesses
The renegades made recommendations for a new-world management. The first three all relate to
management’s role in society:
1. Ensure that the work of management serves a higher purpose. Management, both in theory
and in practice must orient itself to the achievement of noble, socially significant goals
2. Fully embed the ideas of community and citizenship in management systems. There’s a need
for processes and practices that reflect the interdependence of all stakeholder groups
3. Reconstruct management’s philosophical foundations. To build organizations that are more
than merely efficient, we will need to draw lessons from such fields as biology, political
science and theology
Reinventing management cannot happen in a vacuum. It is a co-evolution with the economic system
that makes management, and a co-evolution of the economic system made by management. What
all of them have in common is a rupture with the mainstream neoclassical and neoliberal economic
thought that the previously dominant form of capitalism was built on.
Chapter 1: management in context
Management practices influence and are influenced by their present context. A profession is an
occupation that serves society and the world, whereas a professional practice serves society and
the world in professional conduct. Unprofessional practices and practicing unprofessionally have
the potential to do much harm. For this reason most professions have a professional conduct.
Professional management requires both to be carried out in service of society and the planet, and to
be carried out with professional conduct.
1. Old-world management: unprofessional old-world management practices at best ignoring,
but more often contributing to a world in crisis and upheaval
2. Transition-world management: innovation of professional management practices addressing
the world’s pressing issues, often in conflict with old-world management practices
3. New-world management: management has ousted old-world management practices and
become a profession in service of a slowly re-stabilizing world
Richard Arkwright is often credited to be the management innovator who invented factory
production -> machine-aided flow production: the item flows through the production process while
being transformed into the end product. This broke with past production by skilled craftsmen.
Factory production centres on division of tasks that require only lowly or semi-skilled workers ->
influx of low-skilled workers worldwide. This innovation was in a way the invention of modern
management itself, as factory production required supervision of semi-skilled labor by a manager.
Factory-produced goods boosted global trade as it was required to ship the massive amounts of
goods produced in factories to wherever they were in demand around the world. Factory production
drove down the costs of products -> possibility of consumerism beyond the basic needs of people.
Due to a stable income from factories, compared to the income derived from the previously
dominant agriculture, a sizable middle class emerged, which engaged in consumerism and which
could be influenced by consumerist marketing -> SDG 1,8,10.
On the one hand, without factory production, many of those living middle-class lives might still be
caught in poor living conditions. On the other hand, we would not have today’s overconsumption.
Factory production produced a world with a tension between capitalist and communist systems.
Capitalist practices are centred on the belief in human opportunities for people to work their way up
by accumulating private property and in efficient market-exchange of produced goods by
entrepreneurs. Communist practices aim to free and empower the workers enslaved in factory
production by commonly owned factories, abandoning property and a state controlled exchange of
goods.
Examples of how managerial practices are linked to serious problems we now face:
1. Continuous company growth -> economic system that continuously produces more than the
Earth is able to support while continuing to function as a suitable habitat for humanity
, 2. Consumerist marketing -> unnecessary wants have led people to overconsume, population
increases and an increase in the number of people having money to over consume now
exceed what our planet can support
3. Maintaining growth-consumption requires practices of low-cost production -> need for the
cheapest-possible -> exploitative (ab)use of workers in low-labor-cost countries
4. Take-make-waste production management -> mountains of waste and islands of plastic
waste floating in the oceans
5. Management evaluation practices based on quarterly reporting emphasize short terms and
make long-run sustainable management practices unfeasible
6. Exploiting resources -> collapsing ecosystems and a species extinction crisis
7. Shareholder-value-based management practices give priority to company owners, leading
managers to treat all other stakeholders as being of lower-importance
8. Executive payment practices, related to high-level pay, produce and reproduce economic
inequality
9. Paying women less than men for the same job done maintain gender inequality
10. Strategic human resources management looking for only the best and brightest -> exclusion
from the labor market, unemployment and poverty
11. Globalized supply chain management -> collapse of local industries and their communities
and contributed to climate change
12. Finance and accounting practices centred on financial costs and value create a management
system that at best is ignorant about social and environmental cost an value, and at worst
harms society and the environment
These are examples of old-world management, which are not in the best interest of society and
Earth as a whole. Engaging in these makes a manager an unprofessional manager.
To go through a transition from old-world to new-world management, we need subversive
management that eliminates inadequate management theories and practices and promotes new
theories and practices aligned with the needs of the troubled world we live in. Transitions are
understood as co-evolving processes in economy, society, ecology and technology that
progressively build up toward a revolutionary systematic change. We are now in a transition to
become a force restoring and restabilizing the world -> SDG 10,13,14. This is characterized by
varieties of ethical, social and environmental issues and by a tension between old and new world
management.
Research has identified nine planetary boundaries, which are
ecological thresholds that threaten humanity’s subsistence on
Earth when overstepped (global catastrophes highly likely).
Currently we are overstepping four, including climate change
and species genetic diversity.
Humanity’s global footprint is a way of measuring how much
of our planet’s resources are used for human production and
consumption. Our footprint is 1.75: humanity’s resource
,consumption exceeds the reproductive capacity of our planet. This overconsumption is enabled by
our economic system, which in turn is enabled by our (un)professional management practices.
The Sustainable Development Goals (SDGs) are goals addressing humanity’s social, environmental
and economic issues, developed by the UN. Addressing one or several of those is a step towards
professional management practice. These influence management practice and education.
CEOs often mention that their personal motivation is the main driver for
their companies’ sustainability initiatives. There are three broad change
mechanisms that may be triggered by a change in individual managers or
groups of managers towards truly professional management. First,
managers have the power to change business in their respective spheres of
influence, regardless of their hierarchical position. A frontline manager may
create a sustainable, responsible and ethical bubble in managing her or his
own team. A top-level manager can do the same for the company as a
whole. Secondly, once the business has demonstrated success in
transforming to more professional ways, its industry peers are likely to follow for competitive
reasons. Companies from other industries and ultimately the economy as a whole could also follow
the lead of innovative companies. Third, while the economy is changing, the impact on society of
the overall economic system of industries and single companies becomes visible.
Peter Drucker states that normal ways of doing management have become an institution: the
emergence of management as an essential, a distinct and a leading institution is a pivotal event in
social history. Rarely has a new basic institution emerged as fast as has management since the turn
of this century.
One type of institutional work refers to work that people realize in order to change what is normal,
respectively institutionalized. A second type is to try to maintain the old normal. The third type is to
create new institutions to an entirely new normal (SDG 16,9).
There are four drivers of professional management (SDG 7,13):
1. Main stakeholders (customers, employees, governments and civil society) are increasingly
expecting managers to contribute to society and the world through their companies
, 2. There are many business opportunities in professional management in the service of society
and the planet. Professional management is attractive to employees and customers, and
there is a multi-billion dollar market for sustainable products around the world related to
LOHAS (lifestyles of health and sustainability). Using less resources produces considerable
cost savings. Business case -> lower energy costs, higher competitive threats and new
revenue opportunities
3. With social media and mobile devices, it is impossible to hide unprofessional behavior ->
transparency, otherwise higher brand risks and business improving external rating
4. Professional management practices in service of society and planet are increasingly
institutionalized: expectations around potential legislation/regulators and fines/penalties
5. A gradual convergence of systemic environmental and economic issues, causing more
access to raw materials and higher carbon costs
On the other hand, there are inhibitors of professional management:
1. Profit arguments: the Friedman argument implies that the only responsibility of managers is
to make money (or to improve reputation), thus not spending money on responsible
business activities. One can only contribute to society and the planet in times of high profits
2. Tensions and paradoxes between old-world and new-world management. Management in
service of society and the planet often requires prioritization. The paradox is rooted between
commercial business logic and the professional logic of serving society
3. Stakeholders might accuse a manager of greenwashing when creating a misleading
impression of the social, environmental or ethical performance of a product or company. To
avoid this, professional managers aim to avoid exaggeration and misleading communication
4. Operational inhibitors: lack of managers’ professional management skills, difficulties to
engage with external groups and high complexity in integrating professional management
practices throughout all business functions
5. Ongoing economic crises
6. There is an argument that sustainability is only applicable for large corporations, already
developed nations, and end-consumer businesses
The renegades made recommendations for a new-world management. The first three all relate to
management’s role in society:
1. Ensure that the work of management serves a higher purpose. Management, both in theory
and in practice must orient itself to the achievement of noble, socially significant goals
2. Fully embed the ideas of community and citizenship in management systems. There’s a need
for processes and practices that reflect the interdependence of all stakeholder groups
3. Reconstruct management’s philosophical foundations. To build organizations that are more
than merely efficient, we will need to draw lessons from such fields as biology, political
science and theology
Reinventing management cannot happen in a vacuum. It is a co-evolution with the economic system
that makes management, and a co-evolution of the economic system made by management. What
all of them have in common is a rupture with the mainstream neoclassical and neoliberal economic
thought that the previously dominant form of capitalism was built on.
