WHEN CORPORATE INFLUENCE FALLS BETWEEN THE CHAIRS!

WHEN CORPORATE INFLUENCE FALLS BETWEEN THE CHAIRS!

James R. Fisher, Jr., Ph.D.

© April 20, 2014

 

REFERENCE:

Another vignette from Six Silent Killers: Management’s Greatest Challenge (2014)

 

The complex organization is a twentieth century phenomenon. If society doesn’t have it quite right regarding the relationship between workers and managers, it is because the organization is still in a learning mode.

Once management was tapped to be surrogate owner as operator, the relationship between workers and managers changed. Managers took on the responsibility for the organization’s success. From that sense of duty, it is easy to see how management might take advantage of workers or take them for granted. Management became the stick that stirred the drink. Wrong or right, that is what evolved.

Workers went along with it, to a point. Then the unions stepped in to complain that all wasn’t quite kosher. The union movement was meant to look out for the interests of workers. It contributed instead to the current dilemma by surrendering to management the control of work in exchange for wage and benefit concessions. Unions are disintegrating at an alarming rate because that function is no longer necessary.

That said workers are adrift psychologically, however, and remain essentially reactive, hurting spiritually, if not only or always economically.

They hunger for the nostalgia of work when they controlled what they did.  To understand this shift, consider William H. Whyte, Jr.’s The Organization Man (1956).  Whyte profiled a new breed of elite managers dedicated to the goals of their leaders without question.

 

[Sloan Wilson, about the same time, came out with THE MAN IN THE GRAY FLANNEL SUIT, a novel about the American search for purpose in a world dominated by business.  Tom and Betsy Rath share a struggle to find contentment in their hectic material world while several others are fighting essentially the same battle, but differently.

The novel was made into a film in 1956, starring Gregory Peck and Jennifer Jones, as Tom and Betsy Rath, with Frederic March (actor Lee J. Cobb) as Tom Rath’s boss.

In the end, it is a story of taking charge, taking responsibility for one’s own life.  The book was largely biographical, drawing on Wilson’s experiences as assistant director of the U.S. National Citizen Commission for Public Schools. 

The title of the book became part of the American vernacular, as the book was breaking new ground at looking at conformity in the executive suite, and its toll on marriage, family, and, indeed, culture as the company came to believe it “owned” executives when they reached a certain pay grade.

Such notable as presidential candidate (1956) Adlai Stevenson described the organization man culture as “a collectivism colliding with American individualism.”  Professors of sociology used the book in their courses addressing corporate discontent, while executives across the country claimed to have learned “an important lesson” from the book and film.

Alas, not only did nothing change, but that the problem today, nearly sixty years later, is exponentially greater.]  

 

These managers sacrificed family, personal comfort, and ego for the company. The organization man was loyal, obedient, conforming, hardworking, dutiful, and dedicated. He put the concerns of the company ahead of his own.

Over time, a peculiar thing happened. The organization man came to feel “he was the company!”—that the company belonged to him because he had more of a stake in it than anyone else. As organization men moved up the ladder, they perpetuated the myth of ownership.

Leaders, such as Lee Iacocca, were custodians of the myth. With the shift in the knowledge base of the organization in the 1990s, and with knowledge base being much more critical to success, this arrogance has often found organization men literally running their respective companies into the ground.

The organization man mentality persists in Fortune 500 companies. It is revealed every time a reporter asks a senior manager how he can justify an eight figure income.  A typical response: “When I came into this company, the company had lost money for five years, the stock price and market share had been cut in half. We just had our second record year in a row, the stock price is at an all-time high and we have regained our position in the market. Considering that, I am underpaid.”

An organization man thinks he does it alone and feels little guilt for doing whatever to put the company back on its feet.

Nor does he apologize for taking the compensation derived for his efforts. He sees his obligation to stockholders, not stakeholders—not the workers. Yet the role of the organization man has faded. His influence has shifted to institutions that manipulate the symbolic economy. Money, credit, and capital are no longer tightly bound to the real economy of produced goods, services, and trade. We are seeing the collapse of traditional power and the introduction of synthetic power.

Who would have thought that multibillion-dollar corporations could end up on the trading block or be driven to criminal activities for survival? Archer-Daniels-Midland was fined $100 million for price fixing of lysine, a feed additive. Meanwhile, Texaco agreed to a record $176 million settlement for racial biases. It is relevant to this discussion as to how that came about.

Richard Lundall, a senior personnel executive, lost his job in a Texaco cutback in 1994. In 1996, he released tape recordings of a Texaco senior management meeting, which took place in 1994. These recordings depicted him and other company officers belittling black employees and plotting to destroy evidence in a race discrimination suit. It became the basis of the nine-figure settlement. Now, it seems portions of these tape recordings were erased, reminiscent of the famous 18-minute gap in the Watergate tapes.

The plot thickens! Indeed, who would have thought the Age of Capitalism would descend to such vulgarity? But it may be happening in your own backyard. In the Tampa Bay area, Publix Supermarkets, Inc., which dominates the food supermarket business in the Southeast (Florida in particular) and enjoys a reputation of being a first-class, first-rate employer, agreed to pay its 150,000 women employees $81.5 million to settle a sex and race discrimination lawsuit brought on by 12 former and current female store employees.

With Texaco and Publix alike, senior management first took the class action suits as a joke and behaved badly. Senior management overrated its importance, while it underrated the impact of modern workers once they get their dander up.  Profits have taken on the appearance of imagined power.

Organizations are either more or less profitable, so traditional leaders are either enhancing or losing their imagined power base.  The frantic search for profits finds many companies surviving on the basis of how well they play the money market.

Kenneth Galbraith predicted this catastrophe many years ago, envisioning capitalism giving way to a mandarin like technocracy, where moving money would take precedence over making things.  Sony Corporation chairman Akio Morita, addressing the 1990 graduating class of the Wharton School of Business of the University of Pennsylvania, warned that America will never get back on course if its best continue to “chase the buck” instead of producing quality goods.

Only 50 out of an MBA graduating class of 840 planned to get into manufacturing, keeping Galbraith’s prophecy extant.  Peter Drucker, while more philosophical than Galbraith, sees the world economy in a state of flux, with classical economic theories no longer applying. “The new symbolic economy of financial flow,” he says, “outweighs by a ratio of more than 35 to 1 the real economy of traded goods and services.” 

What is causing the demise of the real world economy is the uncoupling of the primary products economy from the industrial economy and of the industrial economy from employment. The result is that capital movement rather than trade is driving the economy.

Moreover, information technology and services are taking precedence over traditional labor. In light of these shifts, we are seeing a steady shedding of blue-collar jobs, with more than 7 million such jobs disappearing in the United States since 1975. America is experiencing what the world economy will eventually experience, and that is an accelerating substitution of knowledge and capital for manual labor. “Without such a substitution,” Drucker argues, “no modern nation can remain competitive.”  Yet, the obsessive attempt to first preserve blue-collar jobs and then to treat all workers as if they are blue-collar workers has become a prescription for disaster.

The problem, then, is that the professional worker, who has made both the blue-collar worker and the organization man obsolete, continues to be treated as if it is still 1945. While professionals have an edge on the knowledge curve and, therefore, influence, and managers are now the equivalent of co-workers, the cultural biases of organizations insist on treating management as if it still has the power. The result is the donnybrook we see and the reason why the six silent killers are thriving. Management valiantly attempts to exercise control and cannot, so influence falls between the chairs.