Managerialism (20TH CENTURY)

Ideology of organizational power.

Organizations, both public and private, are best run when power is exercised hierarchically by managers who are distinct from the producers of goods or the providers of services, but have general power to dispose of the organization’s resources.

Managerialism is thus a late 20th-century flexible mutation from the theory of bureaucracy, and is in opposition to theories of collegialism.

Source:
James Burnham, The Managerial Revolution (London, 1941)

Managerialism, involves belief in the value of professional managers and of the concepts and methods they use. Contemporary writers on management such as Thomas Diefenbach^[1] associate managerialism with hierarchy. But scholars have also linked managerialism to control,^[2] to accountability^[3] and measurement, and to an ideologically determined belief in the importance of tightly-managed organizations,^[4] as opposed to individuals or to groups that do not resemble an organization.

Following Enteman’s 1993 classic on Managerialism: The Emergence of a New Ideology,^[5] American management experts Robert R. Locke and J. C. Spender see managerialism as an expression of a special group – management – that entrenches itself ruthlessly and systemically in an organization.^[6] It deprives owners of decision-making power and workers of their ability to resist managerialism. In fact the rise of managerialism may in itself be a response to people’s resistance in society and more specifically to workers’ opposition against managerial regimes. Enteman (1993), Locke and Spender (2011) and Klikauer (2013)^[7] explain Managerialism in three different ways:

Building on Enteman (1993) and Locke/Spender (2011), Thomas Klikauer in “Managerialism – Critique of an Ideology” (2013) defined managerialism thus:^[8][9]

“[….] Managerialism combines management knowledge and ideology to establish itself systemically in organisations and society while depriving owners, employees (organisational-economical) and civil society (social-political) of all decision-making powers. Managerialism justifies the application of managerial techniques to all areas of society on the grounds of superior ideology, expert training, and the exclusive possession of managerial knowledge necessary to efficiently run corporations and societies.” ^[10]

As the simpler yet already highly organised management of Henri Fayol (1841-1925) and Frederick Winslow Taylor (1856-1915) mutated into managerialism, managerialism became a full-fledged ideology under the following formula:

Management + Ideology + Expansion = Managerialism [1]

Two examples of the extension of management into the non-management domain – the not for profit sphere of human existence – are public schools and universities. [2] In both cases, managerialism occurs when public institutions are run “as if” these were for-profit organization even though they remain government institutions funded through state taxes. In these cases, the term new public management has been used. [3] But the ideology of managerialism can even extend into more distant institutions such as, for example, a college of physicians.[4]

Albert A. Anderson summarized managerialism as the ideological principle that sees societies as equivalent to the sum of the decisions and transactions made by the managements of organizations.^[11]

Compare what the historian James Hoopes wrote (2003):

“[…] the main genesis of managerialism lay in the human relations movement that took root at the Harvard Business School in the 1920s and 1930s under the guiding hand of Professor Elton Mayo. Mayo, an immigrant from Australia, saw democracy as divisive and lacking in community spirit. He looked to corporate managers to restore the social harmony that he believed the uprooting experiences of immigration and industrialization had destroyed and that democracy was incapable of repairing.”^[12]

Managerialist Ideology

The managerialist society is not one which responds to the needs, desires, and wishes of a majority of its citizens, but one which is influenced by organizations. The managerialist society responds to the managements of various organizations in relation to their transactions with each other. The needs, desires and wishes of the individual are heard through their membership of an organization. Furthermore, managerialism is both a process and a substantive ideology. Managerialism says that the fundamental social units are not individuals, as capitalism would declare, but rather that the fundamental social units are organizations. Ultimately, managerialism specifically denies that the fundamental nature of society is an aggregation of individuals.^{[13][need quotation to verify]}

Instead, managerialism sees the core building-block of contemporary society as the modern business company or corporation. To further business, companies, and corporations is the ideological goal of managerialism. How managerialism functions as such an ideology has been perfectly expressed by one of managerialism’s main ideological flagships – the Harvard Business Review – when the HBR‘s former editor Joan Magretta (2012: 80-81) made the following stunning revelation:[i]

Business executives are society’s leading champions of free markets and competition, words that, for them, evoke a world view and value system that rewards good ideas and hard work, and that fosters innovation and meritocracy. Truth be told, the competition every manager longs for is a lot closer to Microsoft’s end of the spectrum than it is to the dairy farmers’. All the talk about the virtues of competition notwithstanding, the aim of business strategy is to move an enterprise away from perfect competition and in the direction of monopoly.

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[i] Magretta, J. 2012. What Management Is: How it works and why it’s everyone’s business, London: Profile.

Political

Managerialism in political science is a set of beliefs, attitudes and values which support the view that management is the most essential and desirable element of good administration and government. It follows that in all enterprises and services, both private and public, expertise in management must be taught by training and by incentives to excel. In the political world this may take the form of asserting that much conflict and argument are unnecessary for solving problems. All that is needed is a rational assessment of the problem and this involves gathering and collating information, listing the options, calculating costs of each, evaluating consequences and choosing the best course of action. Recent managerialism has included such devices as “performance indicators” (purporting to measure the relative efficiencies of different managers) and “market testing” (which compares public sector managers’ responsibilities and tasks with those of managers in the private sector in order to assess their pay). Managerialism is criticized for weakening the public-service ethos.^[14]

If one were to conceive of society as a nation, such as the United States, managerialism concludes that there is no single United States and that individual Americans should not be identified as the fundamental nature of the country. Rather, the country is basically composed of numerous groups which collectively make up the country we call the United States. The government is a part of the managerial process. The management of different groups will attempt to influence the direction of government action. Their success or failure will depend upon their ability to pursue their case and upon their ability to blunt the cases of competitors. The success of the subunits depends upon the ability of their managements and other factors such as size, cohesiveness, managerial discretion, and control of resources. Government itself is a collection of governmental units. The government is not state.^[15]

Economic

Economically, managerialism is the application of managerial techniques in businesses. Managerialism in this regard has to do with the strategic approach of goal-setting. In order to achieve previously unimagined levels of accumulation and production, businesses within a capitalist economy needed a way of connecting their strategic plan of actions to desired implementations of those plans. Within an organization, the individuals at the top of the organizational hierarchy determine a mission or set of goals, which is then strategically analyzed by individuals lower on the hierarchy (managers) to devise local goals to carry out the overall mission. Put simply, the managerial standard is to receive goals from above and to create new goals for those below.^[16]

There is a belief that in managerialism, organizations have more similarities than differences, and thus the performance of all organizations can be optimized by the application of generic management skills and theory. To a practitioner of managerialism, there is little difference in the skills required to run a college, an advertising agency or an oil rig.^[17] Experience and skills pertinent to an organization’s core business are considered secondary.^[18]

The term “managerialism” can be used disparagingly to describe organizations perceived to have a preponderance or excess of managerial techniques, solutions, rules and personnel, especially if these seem to run counter to the common sense of observers. It is said^{[by whom?]} that the MBA degree is intended to provide generic skills to a new class of managers not wedded to a particular industry or professional sector.^[19]

There have been mixed reviews on the efficacy of managerialism, explored extensively in university studies of the State. Some have accepted the flaws in the theory, building upon it and putting it forth as a valid theory of the State. Others have outright rejected such a proposition, responding that – regardless of the few similarities – such a system could not be successful on a political level.^{[citation needed]}

The word “managerialism” can also be used pejoratively, as in the definition of a management caste. Robert R. Locke defines it accordingly as:

“What occurs when a special group, called management, ensconces itself systemically in an organization and deprives owners and employees of their decision-making power (including the distribution of emolument), and justifies that takeover on the grounds of the managing group’s education and exclusive possession of the codified bodies of knowledge and know-how necessary to the efficient running of the organization.