A Challenge to Traditional Theory

A playtest to tralatitiousistic oversight hypothesis Ed Weymes Introduction Modern attention theories ar counselinged on how several(prenominal)s tot up to government and corporeal writ of execution succession the execution of instrument of the headsman decision maker is inflictd by the judicatures ? nancial deteriorates and char doinger price. date system of ru olive-sized succeed the principles associated with total quality management, learning mental strainations, high accomplishment organic laws and implement fit s onus cards, the chief executives primary focus is ? ated on retaining book of the geological formation to meet stockholder expectations. As we enter the parvenu millennium the embodied world has been rocked by the s female genitaliadals involving Enron, Worldcom and Adelphia in the USA and in Europe by Parmalat and Mannesmann. These, and a host of other placements, flummox been popularly criticised for fraudulent accounting pract ises or excessive idiosyncraticisedised gain for the chief executive and senior members of the administration plot creating a ? nancial catastrophe for employees and sh beholders. The public no keen-sighteder cusss the corporal world.The World E ascertainomic Forums (2004) global surveys on cartel in 2004 and 2002 indicate that pots send levels in global and large domestic companies remain very(prenominal) low with less than 10 per cent of respondents reporting a luck of trust in these institutions operating in the shell interests of society. (The results for 2004 show most im professionalvement over 2002. ) In Europe, the imagination of corporate t fireer certificate of indebtedness (CSR) is the open(a) of legion(predicate) boardroom discussions and in the USA the Dow J peerlesss publishes a CSR mightiness on the premise that many an(prenominal) investors believe ? ms who hold favorable function bring in better long term ? nancial re moots. The inten t of CSR is to get pass judgment to society, to leave the world in a better slip for our grandchildren by habitusing purlieual and neighborly responsibilities into the conventional sparing equation. proponents of CSR penury that this overture lead restore public trust and respect world power in the corporation, musical composition the non-believers postulate that the concepts of CSR exactly re? ect conquer standards of corporate governance and in that respect is no need for CSR as a interrupt representment.Twenty years ago similar sentiments were expressed about quality skillful at one time the quality movement ensured that the concept is now a undeniable plainly non suf? cient condition for stiff competition. As we enter the twenty-? rst century the concept of corporate citizenship has captured the precaution non unaccompanied of corporate subscribeers that also society. The corporate s quarterdals associated with Enron in the USA and Parmalat in E urope in concert with the collapse of Arthur Anderson, the respecting accounting, auditing and consulting global giant, The author Ed Weymes is Associate professional personfessor at the University of Waikato Management schooling, Hamilton, New Zealand.Keywords Management possible action, Philosophy, Social responsibility Abstract This make-up ch entirelyenges the ism underlying handed-down management thinking. The historic and possibly esoteric usage of business, to maximise sh arholder wealth, is no longer a relevant proposition. Academics and managers need to rethink the philosophic frame go bad of management possibility. For the then(prenominal) 50 years the management literature has espouse a to a greater extent benevolent race approach to the management of administrations that the importance of ashess and process and performance measurers associated with the scienti? c theory of management prevails.With the growing importance of knowledge foot and the corpora te kind responsibility movement it is timely to re? ect on the mathematical function of business as channeling rank to society and rejecting the focus on accumulation of ad hominemizedized wealth. Knowledgecreating enterprises argon ordered on the development of sustainable relationships in spite of appearance the system and with stakeholders and thus require a different philosophical perspective. electronic access The Emerald Research Register for this journal is available at www. emeraldinsight. com/researchregister The menstruum disclose and full text archive of this journal is available at www. meraldinsight. com/1463-6689. htm hypermetropia Volume 6 Number 6 2004 pp. 338-348 q Emerald Group print Limited ISSN 1463-6689 DOI 10. 1108/14636680410569911 338 A ch bothenge to tralatitious management theory expectancy Volume 6 Number 6 2004 338-348 Ed Weymes has signi? pottly rock-bottom worldwide public trust in the corporate association. In the new-spru ng(prenominal)-fangled World Economic Forum (2004) survey on trust, totally 7 per cent of respondents reported that global companies operate in the best interests of society. objet dart this ? gure is a small improvement over the 2002 survey public trust in the corporate community is low.Organisations be seen as pro? t generating and wealth enhancing for the admit few. The scale of the public outcry against unethical doings has turned the spotlight towards the importance of corporate citizenship, ensuring that organisations focus on cordial and purlieual issues as well as the economic returns. Public attention appears to be less focussed on respective(prenominal) wealth creation moreover on the manner in which wealth is occasiond. Individuals who exploit others for personal gain or who exploit society or the environment for their give birth avail entrust non be tolerated.In 2003 a PricewaterhouseCoopers (2003a) survey nominate that 75 per cent of chief executive of? cers (chief operating officers) surveyed tell they would forgo short-run pro? ts in order to implement a sustainability programme. Yet the suck up of the business news body stock foodstuff performance and sh argon price. Despite the move towards a greater focus on nation in the organisation and concern for the environment, organisations remain numbers drive and subject to the vagaries of the ? nancial markets. Chief executives measure their success by their violation on EPS and not their contri besidesion to the social or environmental issues. nevertheless immediatelys chief executive officer also recognises the core competence of the organisation lies in the knowledge and skills of its stack. de varyed argon the days when product design, production process or guest service could create competitive reward. It is the skills and abilities of the case-by-case lag members that dictate the approaching of the organisation. thereof, the organisation must ensure staff a r challenged and suitably rewarded and nowadays we see organisations offering attractive remuneration packages including child c ar and a host of other bene? ts. further are much(prenominal) packages attractive if they are knowing to buy the soul of the employee and not prepare trust among the several(prenominal)s in spite of appearance the organisation? now the chief executive is challenged with the task of building trust and justice in the organisation. When trust pervades the organisation there is committedness from the staff and support from the out-of-door community. Trust is establish on shared value and value systems lie at the pith of humans behavior, behavior that endurenot be controlled done systems and processes, the traditional operating standard for many organisations.If corporate social responsibility is vested in gaining the trust of stakeholders, inwardly and impertinent the organisation, then the central doctrine must be ground on the organisati ons ability to build relationships. Relationships are established in the midst of people and croupnot be mandated by strict adherence to systems and processes. The people in spite of appearance the organisation must subscribe to the determine of the organisation and those outside the organisation must admire those value. The organisation must be values driven. gum olibanum the organisation that espouses corporate social responsibility must develop an environment where people in the organisation tack declare together in a compatible manner and external stakeholders form an activated connection with the organisation while maintaining its dedication to the ? nancial investors. Traditionally, the predicament of the chief operating officer has been described as balancing shareholder demands with achieving longevity or sustainability. Perhaps the dilemma should be rewritten providing an environment that espouses individual emancipation while ensuring the ? ancial and non-? na ncial targets of the organisation are met. Individual emancipation deliver the goodss the root for creativity, mutation and building trust between individuals in spite of appearance and outside the organisation. Critics would argue that in an environment where individual liberty abounds, anarchy prevails. Organisations need control, exclusively controls, when imposed from higher up, fag dictate behaviour and tighten up creativity. Performance criteria will remain see factors in the look of the organisation and the longevity of the CEO.However, the organisation and its senior executives need to shift their focus from one that is numbers base to one vested in the establishment of an environment designed to build trust and to maintain the enchant performance measures which are congenial to its staff. therefrom the dilemma becomes not control or individual freedom further control with the ability for individual egotism-expression. In the East this is seen as the oddme nt between the yang (bright) and the yin (dark). This paper explores how such a balance may be get through in an organisation.Challenging traditional management theory While Descartes (Scruton, 2002, p. 3) is often cited as the father of new-fangled philosophy the roots of philosophy can be traced back to Plato (Scruton, 2002, p. 3) and his pupil Aristotle (Vanier, 2001, p. 2). Their writings on human character, clementness and their search for a human indistinguishability still bear relevance today. Human behaviour is vested in the individual except humaneness, human nature, is presented as happiness, a virtue that cannot be attained in isolation. For Plato, the guiding nature of a relationship is to be anchor in fuck and friendship 39 A challenge to traditional management theory apprehension Volume 6 Number 6 2004 338-348 Ed Weymes with friendship we seek to improve ourselves and help others to improve. Aristotle raise developed this point when he described hum an nature as the unafraid to which all things aim. As human worlds we strive to do good and good actions promote happiness a virtue that Aristotle describes as the come uponstone of human behaviour, the perfect activity. Happiness is the virtue that bestows honour on ourselves and on others. It was Marxs (Scruton, 2002, p. 23) vision of the individual cosmos constituted through social activities, de? ned as labour language, customs and institutions (speci? cally economic institutions), that was to move philosophical theory a bureau from relationships and towards individual material gains. Adam Smith (Scruton, 2002, p. 224) attempt to abut that free exchange and accumulation of private property, under the counselling of self-importance-interest, not lone(prenominal) preserves justice and also promotes the social wellbeing as a whole, satisfying existing needfully and guaranteeing stability. This subtle, but signi? ant, shift in philosophical focus from human relationships t o individual personal gains in? uenced the development of the theory of bureaucracy, whose purpose was to command and control the behaviour of many for the gain of the few, a philosophy in direct opposer to that of Aristotle and others. The social landscape of the westboundern economies in the prematureish 1900s was being modify as the industrial revolution gained momentum and the capitalist society emerged. Organisations were, and to nearly extent remain, characterised by a hierarchy of license, impersonal rules that de? e duties, valuate procedures, promotion based on achievement and specialised labour. Those accountable for the operating theatre of these facilities required a system to control behaviour. Weber opined that bureaucracy was subject of attaining the highest degree of ef? ciency and the most rationally cognize government agency of exercising authority over human beings. F. W. Taylor (1911) adopted this philosophy, development the scienti? c approach to management, which stated that jobs could be speci? ed, work methods improved and rationalised through careful study and scienti? c analysis.The driving force of the organisation was ef? ciency, increasing output and the wealth of the owners. Employees were not to be trusted and required stringent controls to ensure their behaviour was focussed on increased productivity. The era of command and control had arrived and the robber barons prospered with personal fortunes being amassed by the select few. Human rights were ignored as were environmental concerns with many factories polluting the land, water and air in their vicinity. As early as the 1950s the Tavistock Institute in England and the bore of Working Life inSweden were intriguing this mechanistic approach to organisation structure. Douglas McGregor (1960) challenged the scienti? c approach to management in his book The Human fount of Enterprise. Theory X postulated that people had to be driven by extrinsic rewards, by punis hment or by bureaucratic control. Theory Y opined that individuals could be intrinsically motivated by interesting work and could be directed and managed by their own behaviour. For the side by side(p) 40 years, theory Y was to be treated as the comfortable side of management while real ? ms, whose motive was to maximise shareholder wealth, sought operational ef? ciencies through speci? ed procedures and rigid controls. The period 1945 to early 1970 was one of growth and expansion in the West. Markets were growing and the multinational ? rm became established. Pro? ts grew, not by gains in market share but by increasing market size. Inef? ciencies and poor management practices were hidden. Then in the mid-1970s the ? rst oil colour shock occurred. Poor management practices were let ond. The good times were over and the West struggled to readjust to the new market conditions.The new approaches to management The mid-eighties axiom the introduction of the total quality management movement, founded by W. E. Deming (1982), which promoted a participative armorial bearing of management. Although Deming was a statistician he believed that a new approach to management was required to substitute the scienti? c approach to management with its associated systems and procedures. At the end of WWII, he volunteered to travel to Japan to assist in the reestablishment of Nipponese Industry. here he could implement his new concepts that were willingly adopted by the Japanese ? rms.In 1979, Demings work in Japan was broadcast on the Statesn television and overnight TQM became the saviour for American industry. By the early 1980s productivity in the West was abysmal and the US Government introduced the Baldridge Quality Awards in 1987 to promote the importance of quality. These quality awards deport since been adopted aboutwhat the world and are based on the 14 criteria speci? ed by Deming. In 1990, Peter Senge (1990) published his book The one-fifth Discipline whic h was to challenge the scienti? c theory of management by introducing the concept of systems theory to organisational design.While the scienti? c theory was founded on the assumption that an organisation was a closed system, where activities within organizations could be broken down into discrete activities, systems 340 A challenge to traditional management theory foresight Volume 6 Number 6 2004 338-348 Ed Weymes thinking was suggesting the organization should be considered as an open system and not a series of discrete parts. The writings of Charles Handy, Margaret Wheatley, Peter Drucker and a plethora of others have support the work of Senge.By the mid-1990s, the concept of the high performance organisation had emerged. Every CEO wanted to be a HPO but there was no universal de? nition of high performance. Like quality this was something that could be treasure but which escaped de? nition. However, Edward Lawler (1996) did present six principles that captured the essence of the HPO (1) organisation can be the ultimate competitive expediency (2) involvement can be the most ef? cient form of control (3) all employees must add signi? cant value (4) lateral processes are the make out to organisational ef? iency (5) organisations should be designed around products and customers (not functions) and (6) effective malarkeyership is the key to organisational leadership (Lawler, 1996, p. 22). For over 20 years organisations have espoused the principles of TQM, they have re-engineered the organisation and purported to be high performers. Organisational theory appears to be spurning the scienti? c approach to management. Cloke and Goldsmith (2002) titled their book The termination of Management and the Rise of Organizational Democracy Autocracy, hierarchy, bureaucracy and management are gradually being replaced by democracy, ? t, collaboration and self managing teams. Permanent, stockpiled, one -size-? ts-all policies are giving way to innovative, just-in-time , evolving, made to order initiatives. Silos and competitive departments are being deconstructed into living evolving webs of association. Isolated, cynical, immature, apathetic employees are being transformed into connected, motivated, value driven, responsible employee owners (Cloke and Goldsmith, 2002, p. 4). Today the social evolutionary process appears to be increasingly henpecked by values and emotions and less by individual goal- orientated rationality.As the chairman of Phillips (2002, p. 2) states expression sustainable development into our business processes is the ultimate opportunity. By its very nature the journey towards sustainability requires the kind of breakthrough thinking that results in sure transition. It calls for partnerships and true cooperation as well as open ingenuous dialogue with stakeholders inside and outside the company. The command and control environment was designed to modify or control behaviour and not to build trust between individuals thro ugh the formation of sustainable relationships. Relationships develop when there is a sharing of alues, attitudes and beliefs between the people in the organisation. Those within the organisation subscribe to the values and those outside the organisation admire the values. Thus relationships are established between people and cannot be mandated by systems and processes. At the turn of the twentieth century, competitive advantage was in? uenced by an organisations ability to produce goods ef? ciently the production era. The production miserliness was followed by the market economy, the service economy and today competitive advantage is determined by an organisations ability to develop smart property the knowledge economy.When knowledge creation becomes the key to competitive advantage an organisation needfully to foster an environment where individual creativity and innovation can ? ourish. Such an environment can be established when the individuals in the organisation are committ ed to the purpose of the organisation, when the organisation is driven by common values and shared beliefs, when the fear of failure has been eliminated and the individuals within the organisation do not feel constrained by rules and regulations, systems and processes.But organisational performance remains vested in key performance indicators. For public companies, shareholder expectation drives performance and the future of the CEO. The ? nancial press remains focussed on stock market performance and corporate ? nancial results remain the highlights of the business news. When an organisation is numbers driven, systems and processes are designed to ensure that targets are achieved. But such measurers in? uence and constrain individual behaviour, thus limiting the opportunity for creativity and innovation.If the reader accepts the above three premises the move to a people focused organisation, the move to support creativity and the restoration of public con? dence, then the dilemma of the chief executive can be rewritten to, providing an environment that espouses individual freedom and bene? ts society while ensuring the ? nancial and non-? nancial targets of the organisation are met. If such an approach is adopted the focus of the organisation must be transformed from the traditional concepts associated with bureaucracy, to a philosophy vested in humaneness.A people focused organisation that facilitates the generation of new and innovative approaches, fosters a harmonious works environment and builds trust and integrity for all stakeholders. A new philosophical approach is required to provide the foundation of management theory, one which is not based on the Marxist perspective, that individuals are focussed on materialism and seeking self ful? lment, but one 341 A challenge to traditional management theory foresight Volume 6 Number 6 2004 338-348 . . Ed Weymes focussed on a social perspective vested in the norms and values of society.Thus we appear to be faced with a dilemma. Human nature is vested in individual freedom and the need for the individual to receive their disembodied spirit according to their own values but society, in which the individual lives, can only be managed through the ad weft of systems and procedures. Since both arguments are correct no one wiz Hesperian philosophy can be applied to manage todays society which requires a perspective that balances the need for individual freedom with rules and regulations required to ensure an orderly society. . . To love men the equivalent of benevolence.Only the man of humanity knows how to love people and to hate people to hate evil. To be respectful in private look, be serious in intervention affairs and to be loyal in dealing with others. To master oneself and return to propriety is humanity. To overcome the sel? sh desires within ourselves, to cultivate the soul and heart within ourselves so it can be extended to every aspect of our life allowing good will to ? ow to others. Eastern philosophy While there is no one dominant Eastern philosophy the region has provided a photomosaic of philosophical perspectives on life and the meaning of life.From Hindu to Dao, from Islam to Tao from Buddhism to Confucianism there may be few common themes and while all are religions, Confucianism is considered to be more of a philosophy than a belief. Master Kung (Confucius) was born into a poor noble family in 552BC in the State of Lu in China. This was a period on Chinas history known as the hundred schools with teachers wandering from town to town expounding their theories on how the various rulers could improve their ? efdom. Sun Tzu taught the art of warfare and strategy while Kungs teachings were of a more philosophical nature.Popular Confucianism emphasises family values dignity, diligence and education, where there is no disparity between the self-cultivation of the individual and the interests of the community. The individual and the community are part of one harmonious whole represented in Confucian philosophy as Li (rituals) and Ren (benevolence or humaneness). Chief executives are faced with the balance between individual freedom (Ren) and the need to achieve shareholder expectations through the application of systems (Li).Traditionally, the focus has been on the development of systems but perhaps it is time to turn our attention to the people in the organisation. The work of Confucius adapted this approach to govern an ordered ad sustainable society. Confucius considered Ren (humaneness) to be at the centre of his teaching while many of his scholars, including Mencius, placed follow emphasis on the Ren and Li. Ren is not considered to be a virtue but the central virtue that de? nes human nature.Translations of Ren let in benevolence, perfect virtue, human heartedness and humanity. While the concept was never clearly de? ned by Confucius the following are considered exemplar de? nitions (Liu, 1998, p. 17) Confucius pre sents a perspective similar to the early Western philosophers, from the writings of Aristotle (Vanier, 2001, p. 7), who encourages us to look within ourselves to ? nd that inner structure to act powerful and speak the truth, to Kant (Scruton, 2002, p. 155) who opined that we are all of equal importance to others around us.In Confucianism, humaneness can only be depicted inside a relationship, the humane man, desiring to establish himself, seeks to establish others desiring himself to succeed, helps others to succeed. To judge others by what one knows of oneself is a method of achieving humanity (Liu, 1998, p. 18). Similar sentiments are re? ected in the work of Plato and Kant who encourage us to improve ourselves by helping others to improve. Thus Ren can be de? ned as . a benevolent attitude towards people . the actualization of the intrinsic value of each individual life and . resolute commitment to an ideal principle. Confucius developed this humanistic approach to how a ruler should lead his people (or how an organisation should manage its staff) arguing that the moral even off of the self and the well being of the people cannot be separated. He suggested that when the people are governed by law and punishment they will avoid haywiredoing but will have no sense of honour or shame. But when the ruler leads with virtue and governs by the rules of propriety they will have a sense of shame and more over set themselves right.From the organisational perspective while staff may conform to official systems and processes they may lack the commitment to the organisation that is required to allow innovation and creativity to ? ourish. Confucius recognised that individuals live within a society governed by the rules of propriety (Li). However, these rules should not be imposed from above, as in a bureaucratic organisation, where rules are designed to modify and control behaviour. The rules of society or an organisation should be vested in Ren so that the members o f society or the organisation accept the rules and laws as those that de? e acceptable behaviour. 342 A challenge to traditional management theory foresight Volume 6 Number 6 2004 338-348 Ed Weymes Eastern philosophy provides a perspective where the behaviour of the individual is seen as a harmonistic balance between the individual and how that individual interacts in social relationships. Confucianism provides a philosophy that unites the individual right to choose their own destiny while allowing for the appropriate controls and regulations associated with a intricate and technologically driven society.The textile, associated with the bureaucratic organisation and traditional management theory, was designed to control behaviour. Modern management theory and practice has demonstrated that bureaucracy is no longer an effective model. Similarly the end of the market economy, posited by Marx has also proved to be in binding. Today we cannot avow on one philosophical model to pr ovide a fashion model for organisation design, since individual freedom must be tempered with bureaucratic controls. The relationship between Ren and Li possibly provides a model that may resolve the dilemma.East meets West Great thinkers from opposite ends of the earth interested in the same question What constitutes right and wrong and what behaviours contribute to a good society? The similarities in their conclusions are remarkable . the value and importance of ideals visions and visions . the love of learning . the need for self improvement . out attitude towards and preaching of other people is important . to understand others we must understand ourselves humaneness . we improve ourselves by improving others . pursuit of recognition and virtue will lead to the good life and . elationships are the key to happiness goodness Confucius and the early Western philosophers including Aristotle, Kant and Shaftsbury perceived the need for a relationship between the family and the state and argued that shared values and ideals were central to all relationships. The role of education was recognised as the key to self-improvement and living a virtuous life. both(prenominal) Eastern and Western philosophers believed that individuals seek to do good and that by adequate more virtuous a person could improve their life.Similarly there was an transcription that individuals must seek the courage to do the right thing. Through education, wisdom is attained and the starting point for attaining wisdom is self knowledge. Recognising not only what we know but also what we do not know is the key to the appropriate use of knowledge and to prevent errors caused by ignorance. Confucius considered goodness or humaneness to be an individual quality present in, but rarely earn by, the individual. The distractions and enticements of life prevent us from attaining our full authorization.We want to be good, to be seen to be good but the temptation to be sel? sh often overpowe rs our intentions. unsloped as the CEO wants to create a socially responsible company but a little creative accounting will just increase the share price and thus make the task so much easier and the personal rewards so much greater. While there are many similarities in the teachings of Eastern and Western philosophers there is one fundamental difference. Aristotle believed personal behaviour humaneness is focussed on the individual with her own responsibility for selfdiscipline.Personal behaviour did not extend into the social relationships encountered by the individual. This concept remained valid until the writings of Marx when there appears to be a shift from a social focus to focus on material gains. Recent Western philosophical writings Taylor (1991) are returning to the societal focus with an emphasis on the concept of authenticity. Conversely, Confucius opined that the rules for correct behaviour were social controls, which maintained the social graces resulting in the appropriate manners and conduct of the individual.In the West we value the individual and require that the individual has control over her behaviour. The net result of the behaviour dictates how social relationships and society behave. Max Weber took this approach to the extreme with his social philosophical writings a century ago that culminated in the rise of bureaucracy and the foundation of management thinking. While modern management thinking has challenged this approach for the past 50 years a philosophical manikin has yet to be established to justify the theoretical foundations associated with building an organisation based on values and relationships.The Eastern philosophies provide a perspective where the behaviour of the individual is seen as a harmonistic balance between the individual and how that individual interacts in social relationships. The original writings of Plato and more recent Western philosophers would not dis bear with this approach but it is a philosoph ical framework that contradicts the work of Max Weber and challenges the foundation of traditional management theory. 343 A challenge to traditional management theory foresight Volume 6 Number 6 2004 338-348Ed Weymes patterning an organisation on values and relationships the implications (the humane organisation) The concepts of CSR, together with modern management thinking and particularly the move to a knowledge economy is moving management thinking away from the bureaucratic structured organization, relying on systems and processes towards a management style vested in relationships. Thus, if the key success factor for a successful organization is its ability to build relationships and not primarily to generate (excessive) pro? s the foundation for management theory should start with the pre-requisites necessary for the development of relationships and emotions lie at the heart of relationships. Table I Constructive and destructive states of mind Constructive states of mind Bu ild Create Self-respect Con? dence Self-esteem Responsibility honor Trust Compassion Passion Commitment Honesty Benevolence want Generosity Motivation Loyalty Love Destructive states of mind Build Create Low self-esteem Over-con? dence Jealousy Irresponsibility Dislike distrustfulness Sel? hness Negativity Meanness Deceit Hatred Self-ambition Alienation Complaints Source Flanagan, cited in Goleman (2003, chapter 3). Emotions and relationships The rood de? nition of emotion can be traced back to motion and direction to every force there is an equal and opposite force. Thus emotions can be good and bad, positive and detrimental, constructive and destructive. Professor Owen Flanagan (Goleman, 2003, p. 59) argued that bad, negative or destructive emotions are those that are harmful to oneself or others inauspicious to human nature.He also supports the philosophical view, which goes back to the time of Plato and Confucius, that emotion and temperament are constantly pulling us in d ifferent directions. Take, for example, the movement of the demise of Barings Bank Nick Leeson the Barings Bank futures trader based in Singapore enjoyed the good life and was soon earning a signi? cant inducement on futures trading in Asia. But as the markets changed Leeson needed bullion to cover his exposure. By establishing Error Account 88888 he was able to expose the bank to debts of eight hundred million British Pounds.Personal greed and a lack of compassion together with poor systems in the Bank caused one of the greatest banking scandals of all times. Throughout ? ? the debacle Leeson did not see anything wrong with his behaviour. His values and beliefs supported his actions but the only bene? ciary was Nick Leeson (Gapper and Denton, 1997). converse occurrence is depicted in William Goldings (1959) skipper of the Flies with its basic themes being that society holds everyone together, and without these conditions, our ideals, values, and the basics of right and wrong a re lost.Without societys rigid rules, anarchy and savagery can come to light. On the island we hold open mistrust, self-ambition, deceit and irresponsibility destroying the social norms that once bonded the group of schoolboys. Jealousy, dislike and nearness destroyed a society. As human beings we have a choice. We can attempt to work alone in the pursuit of our own personal happiness and success or we can work with others. The easy option is to work alone but we will not inspire con? dence or trust in those around us in the long term. We will have joined the schoolboys on their desert island.Building relationships is every individuals social responsibility. The foundation for constructive relationships Emotions are determined by attitudes, beliefs, values and feelings, which are re? ected in personality and dictate the individuals ability to form relationships. Accepting the premise that envisages and goals can best be attained by working with others the ? rst key lesson in deve loping a sustainable organization is for all staff to be alert of their own strengths and limitations, of how they react in certain slips and understand why they bring forth particular emotional reactions in particular situations.As part of the self-discovery process individuals are able to de? ne their own personal inspirational dream to convey their purpose in life. thither are many examples of personal dreams Martin Luther tabbys famous speech I have a dream, or J. F. Kennedy, . . . this nation will land a man on the moon forrader the end of the decade. Kennedy had no idea of how America was going to put a man on the moon but his challenge provided the impetus for the NASA scientists to exceed their personal best. There is always the temptation to take the easy way out but is it the right way?Emotional responses drive individual feelings and dictate the nature of relationships in society. Flanagan has classi? ed these positive and negative emotions as constructive and destr uctive states of mind which have been summarised in Table I. Individuals who are seen as con? dent, responsible and responsible possess integrity, selfesteem and compassion. They are people who are committed to a dream or a vision that is focussed on improving the life of those around them. The 344 A challenge to traditional management theory foresight Volume 6 Number 6 2004 338-348 Ed WeymesThe process of identifying and formulating a personal dream (see Figure 1) requires insights into individual values and identi? es the strengths to build upon. The dream represents the individuals purpose and destiny in life with its magnitude only limited by ambition, by passion and con? dence of that person. Once the dream is identi? ed it must be shared with others. seldom can we achieve our dream single-handed. Thus the dream should create purpose and meaning for others. Sel? sh dreams, dreams that are designed to promote the dreamholder alone are less likely to be adopted by others sinc e there is little in it for them.Dreams that go beyond the individual and represent a challenge for others are more likely to be shared. Albert Schweitzer is credited with the following statement on visions or dreams I do not know what your destiny will be, but one thing I do know. The only ones among you who will be truly happy are those who have sought and found how to serve. The process of self-discovery provides an arrest of how and why individuals react in certain situations. mess with a high level of selfawareness recognise the danger signs associated with disruptive emotions and are more likely to keep these emotions in check.These are the people we turn to in a moment of crisis knowing that they will give a Figure 1 Identifying and formulating a personal dream careful and profound response to the situation, not an impulsive reaction. They are the people we trust, people of integrity. They do not criticise but ask questions, gather the facts and seek advice before making a measured response. They are re? ective thinkers. They are the people we admire and interact with. They may be parents, lovers, mentors or ordinary individuals who we turn to in time of need. slew who possess a clear understanding of their emotions and their impact on others also possess the ability to recognise the emotional state of those around them. They are people who are skilled in class period body language and recognise the impact that particular circumstances and situations can create in those around them. They understand the mood and the pulse of the situation and are able to bring forth the best from those around them. The characteristics of self-awareness, self worth and social worth provide the drivers for the attainment of high levels of emotional intelligence (see Goleman et al. 2002) and provide the foundation for sustainable relationships. They also provide the basis for establishing a dream and a destiny but more importantly providing the ability to share the d ream and have others buy into the dream. Some writers may argue that these characteristics provide the skills to motivate people but motivation is a process that causes people to 345 A challenge to traditional management theory foresight Volume 6 Number 6 2004 338-348 Ed Weymes act in a particular way. Thus an individual may be motivated to undertake a particular task by the auspicate of a reward or to avoid an unpleasant consequence.Individuals may be motivated to obey rules through a system of reward or fear of punishment (the foundation of theory X). Thus an individual may be motivated to perform a task to which they have no commitment. Commitment is achieved when the individual believes in the task and is inspired by the potential results (the foundation for theory Y). Thus inspiration is more important than motivation. People are inspired when they believe in the cause they are working towards. To be inspirational required the individual to share their dream and the wider t he ground of the dream the greater the potential for people to buy into the dream.Dreams that promote an individual or an organisations stakeholders alone will have little meaning for many of the people employed in the organisation. While a pro? t maximising goal may inspire the award funds and individual stockholders it does little to motivate the individual on the patronise ? oor who will receive the same compensation irrespective of share price. But an organisational dream that seeks to promote a better society has meaning for all those connected with the organisation and thus creates a purpose that can be shared by all in the organisation.An example of such a dream or vision can be foun in Merck and Co. s organisational vision (www. merck. com/overview/philosophy. html) Mission The mission of Merck is to provide society with superior products and serve innovations and solutions that improve the quality of life and satisfy customer needs to provide employees with important work and advancement opportunities and investors with a superior rate of return. Our values (1) Our business is preserving and improving human life. All of our actions must be measured by our success in achieving this goal.We value above all our ability to serve everyone who can bene? t from the appropriate use of our products and services, thereby providing persistent consumer satisfaction. (2) We are committed to the highest standards of ethics and integrity. We are responsible to our customers, to Merck employees and their families, to the environments we inhabit, and to the societies we serve worldwide. In discharging our responsibilities, we do not take professional or ethical shortcuts. Our interactions with all segments of society must re? ect the high standards we profess. 3) We are devote to the highest level of scienti? c excellence and commit our research to improving human and animal health and the quality of life. We strive to identify the most unfavourable needs of consumers and customers, we devote our resources to meeting those needs. (4) We expect pro? ts, but only from work that satis? es customer needs and bene? ts humanity. Our ability to meet our responsibilities depends on maintaining a ? nancial position that invites investment in leading-edge research and that makes possible effective delivery of research results. 5) We recognize that the ability to excel to most competitively meet societys and customers needs depends on the integrity, knowledge, imagination, skill, diversity and teamwork of employees, and we value these qualities most highly. To this end, we strive to create an environment of mutual respect, encouragement and teamwork a working environment that rewards commitment and performance and is responsive to the needs of employees and their families. The organisations dream or vision creates passion and pride in those working for and associated with the organisation.Collins and Porras (1994, p. 55) suggest that companies, which only focused on pro? tability, did not perform as well as those whose focus transcended economic considerations Pro? t is a necessary condition for existence and a means to more important ends, but it is not the end in itself for many of the visionary companies. Pro? t is like oxygen, food, water and blood they are not the point of life, but without them there is no life. Pro? ts do not inspire the individuals in the organisation and they reward only the select few.Visions or dreams that go beyond the economic considerations inspire those in the organisation and those associated with the organisation. Visions that encompass environmental and social concepts as well as economic considerations. A revised philosophical perspective for management theory PricewaterhouseCoopers (2003b) de? nes a sustainable business enhances long-term shareholder value by addressing the needs of all its relevant stakeholders and adding economic, environmental and social value through its core busi ness functions. A sustainable organisation has . a clear purpose beyond pro? . is driven by shared values and . and supported by systems and processes. Proponents of sustainable organisations argue that these organisations require breakthrough thinking that results in true innovation. It also calls for partnerships and cooperation as well as open honest dialogue with stakeholders inside and outside the company (Philips, 2002). They argue that these are not organisations driven by pro? t 346 A challenge to traditional management theory foresight Volume 6 Number 6 2004 338-348 Ed Weymes maximisation but are organisations that will forego short-run pro? to ensure longer-term shareholder value. They are organisations that build trust and create an aura of authenticity, building a harmonious and family-like work environment. They are organisations driven by a purpose, values and beliefs that can be accepted by a wide range of societal interest groups and they are organisations that encourage innovation. Such characteristics are not unique to sustainable organisations but are the criteria that have been referenced by many of the writers of modern management theory. There is a danger that the sceptics of sustainable organisation will focus on the pro? ability criteria arguing that an organisation will always be driven by a pro? t perspective. Return on investment has always been a signi? cant performance criterion and many organisations have found to their detriment that cost reduction increases short-term pro? tability but does little for long term sustainability. While the concept of the sustainable organisation sharpens the focus of modern management thinking the key issue concerns the relevance of traditional management thinking. Traditional management theory has been create on the command and control model developed by Frederick Taylor and based on the work of Max Weber.For Weber the purpose of business was to maximise shareholder wealth. This strategy cou ld be achieved by viewing the organisation as a closed system, subdivided into discrete units with each unit focussed only on its own activities. Staff were required to follow speci? ed procedures and innovation was not encouraged. Systems and processes, rules and regulations, dictated the pulse of the organisation. Return on investment, economic value added and share price are the metrics that dominate discussions relating to corporate performance yet modern management theories have focussed on the human side of the business for the past 50 years.Most authors and corporate leaders agree that the age of the bureaucratic organisation is past. Yet the numbers still dictate performance. The daily business reports focus on share price ? uctuations and pro? t warnings and rarely do they report on an organisations performance on environmental or social issues. In 1999 Dow Jones launched a sustainability index to proctor the performance of ? rms engaged in sustainability projects. The rati onal behind this move was based on the premise that more investors are seeking to diversify their portfolio to include ? rms that have long term environmental and social issues as part of their philosophy.While it is unlikely that ? nancial performance measures will be replaced in the short term, organisations and investors now recognise that while pro? ts are important, how the pro? ts are obtained is a greater concern. A singular focus on pro? t maximisation is driven by a rigid adherence to prescribed systems and processes, requiring a highly disciplined workforce prepared to follow orders without question. discourse is uni-directional and innovation discouraged. Mistakes and errors are ascribed to individuals and a climate of fear pervades the organisation.Performance targets are speci? ed and the attainment of the targets dictates individual performance. The Kaplan and Norton (1996) balanced score card is used to prescribe individual and organisation performance standards. Suc cess is de? ned as an organisations ability to make the numbers. But individual and corporate valued performance targets focus the organisation, and the individuals in the organisation, on personal, self centred, goal orientated approaches, which do little to foster the development of harmonious relationships in the organisation.Over the past 25 years management theory and practice has become more humane with a focus on people in the organisation and by an increasing focus on the importance of values, emotions and social mores. Organisations are attempting to implement the theories of modern management but appear to be defiant to give up the controls associated with the bureaucratic organisation. Yet modern management theorists and the proponents of sustainable organisations are convinced that the key ingredient to organisational success is the development of trust throughout the organisation.But the fundamental premise underlying Webers bureaucracy and Taylors scienti? c approach to management is the assertion that the workers are not to be trusted. Tasks must be prescribed and individual performance measured. Thus the basis for performance evaluation lies in the development of effective systems and processes. plastered adherence to prescribed systems and processes will no longer guarantee success. Today the organisation must be ? exible in order to meet the needs of a rapidly changing environment, a discerning customer and a sceptical public.An organisation is still required to make a pro? t but society is now concerned with how those pro? ts are attained. The strategies of the robber barons, supported by the philosophy of Max Weber, are no longer acceptable. Organisations are expected to adopt an ethical and morally acceptable approach to the creation of pro? ts. In the 1980s, the TQM movement focussed on the importance of quality, yet quality was not a new concept. However, it was a characteristic that many organisations were either ignoring or failing to concentrate on.The TQM movement focussed on quality so that today it is considered a necessary but not suf? cient condition for competing. Likewise the 347 A challenge to traditional management theory foresight Volume 6 Number 6 2004 338-348 Ed Weymes sustainability movement is focussing on the need for more organisations to focus on the environmental and social impacts of their organisations and strategies. The message is that organisations must pay as much attention to the environmental and social impacts of their business as they do to the economic impact.The traditional approach to management does not focus on these concepts. Successful sustainable organisations are founded on open communication and trust. Thus the basis for performance lies in the ability of the individuals within and those interacting with the organisation to form meaningful relationships. Management teaching and practice must now replace the fundamental assumption of traditional management theory tha t the worker cannot be trusted with a focus on building and developing relationships.The organisations focus should now be based on understanding the relationships between individuals and not on the design and development of rigid and complex systems. While systems and processes are still required to support the organisation they no longer drive the organisation. A corporate vision statement or inspirational dream that encompasses the three pillars of sustainability provides a purpose for everyone in the organisation by integrating individual dream with the dream of the organisation.Through a meaningful purpose or inspirational dream commitment, trust and integrity are built between individuals who work together in a harmonious manner. There is a commitment to exceed ones personal best and to pay attention to the detail. New ideas can emerge from anywhere. The organisation creates its own future. Quantitative measures are still required to provide breeding on how the organisation is performing and to provide staff with information that can be used for improvements and innovations but these KPIs should not be used to discipline individuals.The concept of sustainability has focussed attention on the need for all organisations to demonstrate a commitment to the environment and society as well as their own economic wellbeing. Yet the concept of sustainability is still considered to be a fringe movement in the corporate community. However, the survival of the movement is rectangular because all organisations have recognised that that the key competitive advantage lies in the creation of new knowledge. New knowledge cannot be created in an environment constrained by systems and processes and where there is a fear of failure.Knowledge can only be created in an environment where individuals are committed to the organisation and a high level of trust and integrity pervades the organisation. The concept of sustainability or corporate social responsibility provides a framework for the establishment of such an environment. The framework comes in two parts, the yin and the yang, and it is the role of the CEO to balance the tension between the need to create a focus for the realisation of individual dreams and an environment where innovation and creativity ? urish with the necessity for systems and processes to ensure order and the attainment of the ? nancial goals. Traditionally, the CEO has focussed on the design and development of systems and processes while paying some attention to the people in the organisation. Today that focus must change so the people in the organisation control the systems and processes and not have the people controlled by the systems. References Cloke, K. and Goldsmith, J. (2002), The End of Management and the Rise of Organisational Democracy, Jossey-Bass, San Francisco, CA. Collins, J. C. and Porras, J. I. 1994), Built to destination Successful Habits of Visionary Companies, HarperCollins, London. Deming, W. E. (1982), Quality, Productivity and Competitive Position, MIT Press, Cambridge, MA. Gapper, J. and Denton, N. (1997), All that Glitters The Fall of Barings, Penguin, Harmondsworth. Golding, W. (1959), Lord of the Flies, Penguin, New York, NY. Goleman, D. , Boyatzis, R. and McKee, A. (2002), Primal Leadership Realizing the Power of Emotional Intelligence, Harvard avocation School Press, Boston, MA. Goleman, G. (2003), Destructive Emotions A Dialogue with the Dalai Lama, Bloomsbury, London. Kaplan, R. and Norton, D. 1996), The Balanced Scorecard Translating Strategy into Action, Harvard Business School Press, Boston, MA. Lawler, E. E. III (1996), From the Ground up, Jossey-Bass, San Francisco, CA. Liu, S. -H. (1998), Understanding Confucian Philosophy, Praeger, Westport, CT. McGregor, D. (1960), The Human Side of the Enterprise, McGraw-Hill, New York, NY. Philips (2002), Annual Report on Sustainability, Philips, Amsterdam. PricewaterhouseCoopers (2003a), 6th Annual CEO hatful, Pricewaterhous eCoopers, London. PricewaterhouseCoopers (2003b), Presentation to EFMD Annual Conference, PricewaterhouseCoopers, London.Scruton, R. (2002), A Short History of Modern Philosophy, Routledge, London. Senge, P. M. (1990), The Fifth Discipline The Art and Practice of the Learning Organization, Random House, London. Taylor, C. (1991), The Ethics of Authenticity, Harvard University Press, Cambridge, MA. Taylor, F. W. (1911), The Principles of Scienti? c Management, Norton, New York, NY. Vanier, J. (2001), Made for Happiness, The House of Anansi, Toronto. World Economic Forum (2004), Survey on Trust, World Economic Forum, Geneva, available at www. weforum. org 348