Title: Beyond Managerialism: Towards an Ethical Approach Author: Shih-Wei Hsu Affiliation: Business School, University of Newcastle upon Tyne Under

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1 Title: Beyond Managerialism: Towards an Ethical Approach Author: Shih-Wei Hsu Affiliation: Business School, University of Newcastle upon Tyne Under Dr Norman Jackson s supervision Contact Details: Room 2, Flat N, Easton Flats, Eskdale Terrace, Newcastle upon Tyne, NE2 4DY Tel: BILL197112@yahoo.com.tw Shih-wei.hsu@ncl.ac.uk (this one will be invalid by November)

2 By the 1940s, there were, at least, three clusters of theories of history predicting our future society. The first of these predicted that capitalist society would be replaced by socialist society. The second predicted that capitalism will continue for an indefinite, but long, time, if not forever. The third predicted that capitalist society would be replaced by managerial society (managerialism) (Burnham, 1941: 29; see also Weil, 1987). Nowadays, with the diminishing of communist societies, it can be assumed that the first prediction might be invalid. In light of our ontological status, recent years have seen a rise of managerialism (Grey, 1996), or new managerialism (e.g. Ball and Carter, 2002). The rise of managerialism is, indeed, not at odds with MacIntyre's (e.g. 1990: 26) view that in the 20 th century the ruling ethics are the manager s attitude (his metaphorical usage). Although opinions concerning the theoretical meaning of managerialism are not completely consistent, it is possible to identify two defining characteristics of managerialism or the manager s ethics. Firstly, in MacIntyre's sense, the major concern of the manager is with technique, with effectiveness in transforming: e.g. raw materials into final products, or unskilled labour into human resources (ibid: 30). Namely, s/he pays most attention to the converting processes, and, in any case, efficiency is central to him/her. Secondly, managerialism, particularly in relation to public administration, suggests that there is objective knowledge on which decisions and policy processes should be based (Ryan, 1999). Clearly, managerialism captures Weberian tradition that views gaol rationality as the way in which humans organise their external environment, and this also highlights the importance of technocracy. Without doubt, efficiency, as well as goal rationality, is the premise and the transcendental goal of managerialism. In this regard, managerialism has provided a fertile soil for the elaboration of critical studies of both management and other social sciences. However, as Grey (1996: ) points out, it has not proved to be easy ground to work, and, even, contemporary forms of managerialism are typically rendered seductive by the deployment of much of the language which was hitherto associated with critique. In order to understand this, a recent business event, the crash of WorldCom, offers the best starting point. Since the last year, there has been a general fall of telecoms companies, and

3 telecoms firms, as a whole, have run up total debts of around $1 trillion. WorldCom, amongst others, also contributes to this; however, there is something different. To conceal the scale of huge losses, WorldCom misclassfied $3.8 billion in net-work-maintenance costs as capital spending so as to hide the truth. Although this might be the biggest failure in business history (The Economist, 20 July 2002: 11), the fraudulent tricks are by no means new to capitalist society. The point here is: how is managerialism at work? In July 2002, Michael Powell, America s telecoms regulator, signalled that he would consider allowing one of the Bells to buy WorldCom the Bells are now prohibited from fully entering the long-distance market by antitrust rules (ibid: 11). Meanwhile, the Bells are also pushing for regulatory concessions that would let them establish new monopolies in high-speed broadband Internet access, and they have won a number of victories (ibid: 11). Here, it is possible to identify, at least, two attitudes represented by Powell: managerialism and capitalist liberalism. By the managerialist ethics, when the old organisation (capitalist) is proved to be not efficient enough, it should give way to a more efficient organisation (capitalist). By capitalist liberalism, the principle of laisser-faire is at work. Indeed, under the premise of efficiency, monopolies are less harmful than inefficiency. The problems with capitalism and capitalist behaviour have been recognised more than a hundred years. Yet, it is usually ignored that managerialism is equally dangerous, if not more dangerous. In Burnham s (1941: 252) sense, managerialism inherits large spirit from New Dealism, which, in turn, contributes to establishing what Foucault might term the capitalist regime of truth (e.g. Foucault, 1980: 132). In 1941 Burnham paraphrased New Deal bureaucrats (administrators, or technicians) in this way: [They] are doing the actual running of the extending government enterprises: in short, managers. Though many of them have some background in Marxism, they have no faith in the masses of such sort as to lead them to believe in the ideal of a free classless society..they are.scornful of capitalists and capitalist ideas.they believe that they can run things, and they like to run things. (Burnham, 1941: 255) Clearly, in 2002 the New Dealist spirit is not invalid, but appears in the form of managerialism. It should be noted that although managerialism is a complement to capitalism, they have distinct interests. Capitalism is based on

4 the assumption: money can be made to make more money (e.g. Jackson and Carter, 2000), and therefore capitalists major concern is with the accumulation of capital (money). Managerialism, on the other hand, is based on an assumed superior and objective premise (efficiency), and, as such, managerialists central interest is in the process of building wealth supposed for the benefit of all. This manner, as discussed in this paper, then provides managerialism with an eclectic sense. For Marx, in capitalist societies the ruling class must be capitalists (as in feudal societies the ruling class must be landlords). In order to maintain the ruling status, capitalists must establish the ruling ideas/ideologies (based on capitalist interests) (Marx, 1977: 64-66). However, capitalist ideology is hollow, and it has been ethically condemned, for its end is to accumulate money. Managerialism, in contrast, not only corresponds much better to capitalist interests, but also provides capitalism with powerful means, though, in a sense, the managerial class and capitalist class are competitors for the ruling status (Burnham, 1941: 9). Returning to our business domain. The collapse of positivist orthodox in social science, together with the increasing emancipatory interests, had made the 1970s qualify as an anti-capitalist era. But this was then suppressed in the 1980s a period might qualify as an anti-managerial era. What happened in the business world was that the old owner-manager (with MBA education) got back in the saddle. The proliferation of critical studies in the 1990s is usually seen as a new chic in management. Along with this is a re-appearance of interest in business ethics deriving from the late1970s and early 1980s (Jackson and Carter, 1994), which may include serious awareness of environmental crises (Hobsbawm, 1994: 551). However, nowadays business ethics still belongs to the realm of hyper-reality (Baudrillard, 2001): the gap between the real and the symbolic is a happy irrelevance (Jackson and Carter, 1994). The recent fashion of critical management studies (CMS), as Grey and French (1996: 6) noted, is anti-managerial in its orientation. Notwithstanding, this new anti-managerial position is caught between the Scylla of a Marxist tradition in crisis and the Charybdis of a postmodernism mired in relativism (Grey, 1996). In addition, some CMS terms are abused by new managerial rhetoric, such as autonomy, or emancipation. If these are not enough, there is also the problem that environmentalism is absorbed by managerialism (and mires in the capitalist

5 post-normal science approach). For example, the green house effect became a major preoccupation of both specialists and politicians in the 1980s (Smil, 1989), but the global warming has been even more serious today. Corporate greening, as such, usually appears in the form of managerial rhetoric which, in essence, is a process of amoralisation, if not transferred into a new staple of marketing jargons the customer is the benchmark of goodness (Fineman, 1998: 243; Crane, 2000). For Critical Theorists (in the sense of Frankfurt School), the ethical problems of managerialism/capitalism should be understood in terms of oppression (our resistance to managerialism), and their utopian vision suggests that there is an untouched rationality to guide action toward a desired goal a non-oppressive civilisation, or, at least, a less oppressive one (e.g. Wray-Bliss and Parker, 1998: 50). Meanwhile, they may disagree on postmodernists happy acceptance of the cultural logic of late capitalism (in Jameson's (1991) phrase). Yet, as argued in this paper, the postmodern playfulness (Goodchild, 1996: 2) has indeed challenged civilisation per se, or reduced what Marcuse (1969) termed necessary oppression. But, surplus oppression is by no means abolished, but increased. Paradoxically, this increase is partly contributed by critical studies. On the one hand, CMS is somewhat transferred into managerial interest, and, on the other, postmodernists have represented themselves as the authoritative voices of our times (Grey, 1996). Moreover, with regard to our environmental problems, it seems that the emancipation of oppression and postmodern playfulness are not able to relieve the crises. In any case, alternative and non-abused critical approaches should be articulated. This paper will focus on two issues. Firstly, drawing on a poststructuralist view, it problematizes the ethics of (new) managerialism and the its abuse of CMS concepts, and argues that its eclectic manner makes managerialism more dangerous than capitalism. Secondly, this paper suggests how the possible moral stances could be adapted, such as Taoism and poststructuralism. (1489 words) References Ball, K. and Carter, C. (2002) The charismatic gaze: everyday leadership practices of the "new" manager. Management Decision, 40 (6), pp

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