Wednesday, May 17, 2006

# Posted 9:39 AM by Patrick Porter  

MANAGEMENT CONSULTING: In this month's Atlantic, Mathew Stewart is scathing about the theorists of management consulting, his former career. The article is here, though you have to subscribe unfortunately.

While he is agnostic about the value of consulting itself, which he thinks is an inexact science, he hammers the theorists for their endless false claims to originality:
At the end of the day, it isn't a new world order that the management theorists are after; its the sensation of the revolutionary moment. They lon for the exhilirating instant when they're fighting the good fight and imagining a future utopia.
So in the 1990's, the gurus prophecied that the world was about to enjoy a new mode of human cooperation, the 'information-based organisation' or the 'learning organisation.' They had been preceded by Rosabeth Kanter in 1983, who argued that rigid corporate bureaucracies were yielding to 'integrative' organisations.

She was preceded in turn by a view decades old, of Tom Burns and G.M. Stalker, who celebrated the overthrow of the old 'mechanistic' organisation for the new 'organic' one, with lateral versus vertical information flows, the fluid redefinition of jobs, etc.

But the flattened management structure was identified by James C. Worthy in the 1940's, and before him Mary Parker Follett, who in the 1920's attacked 'departmentalised' thinking.

Knowing little about the shadowy world of consulting, I consulted (excuse the term) a mate of mine who knows the trade:
the real problem with management theory (in the view of an economist) is that a lot of it falls between the two groups of economic research. The 'theory' stuff isn't as (mathematically) rigorous as economic theory - its more 'common sense' and catchy anagrams. The empirical stuff just doesn't have anywhere near enough data to be rigorous: they just compare 5 companies (with massive questions about selection bias) or look at one company over 4 years or similar - stuff that would make any econometrician's blood turn cold. It's kind of like 'I know all Americans are stupid, cos I once sat next to one on a plane...' Methodologically very unsound. It stems from the problem of trying to have the next new big idea - no-one gets much credit for going back and saying 'actually that idea from 1973 made a lot of sense...' - not unless they can repackage it and market it as sexy with themselves as the new guru.
If all that matters is what is written in the last five minutes, where does that put the cutting-edge theorist in five minutes time?
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