Career Counseling: Increased Stress Due to Job Insecurity

Carole M. Saylor, MC, NCC, LAC, DCC, LISAC

In today’s world, we are more and more defined, not by who we are, but by what work we do. Work plays a powerful and increasing role in people’s lives. As it makes more and more demands on our time and energy, our chosen work or career path impacts every facet of our lives. A strong relationship develops between our work and our mental and physical health. Stress in any of these areas, especially work, will affect all other areas of our lives and this is when career counseling can be helpful.

Stress is an interaction between individuals and any source of demand (stressor) within their environment. A stressor is the object or event that the individual perceives to be disruptive. Stress results from the perception that the demands exceed one’s capacity to cope. Different people react differently to the same stressors because of their backgrounds, experiences and values. Elevated stress levels in employees are associated with increased turnover, absenteeism; sickness, reduced productivity, and low morale.

Work stressors are related to depression, anxiety, general mental distress, heart disease, ulcers, and chronic pain. Many people are distressed by efforts to juggle work and family demands, such as caring for sick or aging parents or children. Any exploration of the relationship between work conditions and mental distress, which is the hallmark of career counseling, must take into account individual factors such as sex, age, race, income, education, marital and parental status, personality, and ways of coping.

Although the rewards of work can offset some of its stressful aspects, the physical environment and the psychosocial conditions of employment can have adverse effects on a worker’s mental and physical well-being. Lack of control over work, the work place, and employment status have been identified both as sources of stress and as a critical health risk for some workers. Employees who are unable to exert control over their lives at work are more likely to experience work stress and are therefore more likely to have impaired health. Many studies have found that heavy job demand, and low control, or decreased decision latitude, lead to job dissatisfaction, mental strain, and cardiovascular disease.

Today, stress and its resulting illnesses impact workers in almost every comer of the world. In Australia, stress claims by government workers increased by 90% between 1990 and 1993. A French survey showed 64% of nurses and 61% of teachers were upset over the stresses associated with their jobs. Another study found that stress-related diseases such as high blood pressure and heart attacks cost the U.S. economy $200 billion a year in absenteeism, compensation claims and medical expenses.

In today’s economic upheavals caused by downsizing, layoffs, mergers, and bankruptcies have cost hundreds of thousands of workers their jobs. Millions more have been shifted to unfamiliar tasks within their companies and wonder how much longer they will be employed. Adding to the pressures that workers face are new bosses, computer s

urveillance of production, fewer health and retirement benefits, and the feeling they have to work longer and harder just to maintain their current economic status. Workers at every level are experiencing increased tension and uncertainty, and are updating their resumes, hoping to find jobs, that in many cases, no longer exist.

The loss of a job can be devastating, putting unemployed workers at risk for physical illness, marital strain, anxiety, depression, and even suicide. Loss of a job affects every part of life, from what time you get up in the morning, to whom you see, and what you can afford to do socially. Until the transition is made to a new position, stress is chronic.

In many instances it has been found that the restructuring, reengineering, layoffs, outsourcing, and offshoring performed by companies did little to improve productivity and nothing to improve morale. A review of 52 studies of corporate restructuring involving several thousand companies found that on an average, organizational downsizing had little if any positive impact on earnings or stock market performance. And regrettably, 70% of U.S. companies report serious morale problems caused by years of upheaval and restructuring.

Workers who survive corporate downsizing also find their lives impacted by the vast changes sweeping their work environments. The Lancet, a British medical journal, recently reported increased illness among employees who survive job reductions. Mark Braverman, the founder of Crisis Management Group in Newton, Massachusetts, states «Often times, the people who remain after the cuts are made, wind up feeling demoralized, overworked, stressed, and fearful that they will be targeted the next time around.»

A feeling of powerlessness is a universal cause of job stress. When you feel powerless, you’re prey to depression’s traveling companions, helplessness and hopelessness. You feel you cannot alter or avoid the situation because you feel nothing can be done.

Many employees find themselves worrying about survival rather than a new car or new home. People’s dreams are fading fast with the reality that they could be jobless at any time in today’s workplace. What was once taken for granted now leads to worry and insecurity. Troubling thoughts flood some people’s minds such as: the loss of their home, retirement, pensions, and health benefits, leading to greater insecurity.

Workers are struggling to adjust to downsizing. In a poll conducted in 1995, workers said they would work more hours, take fewer vacations, or accept less benefits in order to keep their jobs. Desperate for some job security, people are willing to work harder and longer with fewer benefits to maintain their occupational status.

Loss of control over one’s future work role can lead to mental health issues along with devastating consequences to other life roles including family life, friends, and societal relationships. It can also lower self-esteem, which often leads to depression. This loss of job control can have devastating effects on every aspect of not only the individual but of their family’s lives.

In general, job control is the ability to exert influence over one’s environment so that the environment becomes more rewarding and less threatening. Individuals who have job control have the ability to influence the planning and execution of work tasks. Research has found that it is the influence resulting from participation, rather than participation itself, which affects job stress and health.

The following strategies for reducing work-related stress may assist you in gaining a feeling of job control.

Alter the working conditions so that they are less stressful or more conducive to effective coping. This strategy is most appropriate for large numbers of workers working under severe conditions. Examples include altering physical annoyances such as noise levels, or changing organizational decisionmaking processes to include employees. These alterations could be attempted by large numbers of employees working together such as a labor or union group. It could also be addressed by upper management in corporations who truly have a regard for their employees.

Help individuals adapt by teaching them better coping strategies for conditions that are impossible or difficult to change. A limitation to this strategy is that it is costly to deal with each individual’s unique transaction with the environment. Intervention strategies could include individual counseling services for employees, Employee Assistance Programs, or specialized stress management programs, such as cognitive behavioral interventions (Long, 1988). Many Employee Assistance Programs address these issues within the company, however, some employees are reluctant to participate for fear of being labeled as trouble makers or have their names appear at the top of the next layoff list. If an individual is feeling inordinate stress at work, it would be advised to seek counseling on an individual basis or find stress reduction classes outside the corporate environment.

Identify the stressful relationship between the individual or group and the work setting. Intervention strategies might include changes in worker assignment to produce a better person-environment fit, or it could involve teaching coping strategies for individuals who share common coping deficits (e.g., training in relaxation skills). Again these interventions would require support from upper management in the Company. Or an individual would have to pursue learning coping strategies on their own time and at their own expense in order to insure confidentiality.

A good tactic to make you feel you are in control and being proactive about the situation is to re-evaluate what is truly important in your life. Decide what status level, economic level, and comfort level you have to maintain to be able to survive and be happy within yourself. When people do this evaluation, they frequently discover they can make much less money and live much differently than they do currently and still be happy. Take a look at other careers where you might be as happy or happier and pursue the education or training necessary to work in that field. It would be advisable to obtain this training while you are still employed at your old job, before looking for a new job becomes imperative.


Work stress is constantly affecting us and our families and seems to be growing in leaps and bounds. This stress can be the harbinger of job dissatisfaction, mental strain, and physical maladies. If you find yourself experiencing increased levels of job stress due to job insecurity, you need to take action and prepare for the future. You must be your own safety net, you cannot depend on your company to have your best interests at heart. You cannot be an ostrich with your head stuck in the sand. You need to see the handwriting on the wall and prepare accordingly, especially if that handwriting is saying you will probably be unemployed within a few years.

International Journal of Economic Sciences and Applied Research 3 (1): 8995 Volume 3, Issue 1 (July 2010)

Differences in Management accounting between family enterprises and nonfamily enterprises: A Statistical Approach

Christine Duller


Management accounting deals with the subject family enterprises rather little in spite of its high economical relevance. This paper questions, weather general objectives of family enterprises differ from those of non-family enterprises. Based on the hypothesis that family enterprises aim at humane objectives to a greater extent and at inancial objectives to a lesser extent than non-family enterprises the results of an empirical study for the region Upper-Austria are presented. The conclusion is that apart from the extent of return on equity objectives of family enterprises do not differ much from those of non-family enterprises. The second point of interest is to analyse differences in objectives between medium and large sized enterprises.

Keywords: Business administration, empirical research, correspondence analysis

  1. 1. Introduction

According to the deinition for SME (small and medium sized enterprises) given by the European Union only 0.5 % of the Austrian enterprises are classiied as large enterprises (Commission of the European Communities, 2003, p. 39). Therefore the vitality, custom ization and competitiveness of the national economy are borne by small and medium sized enterprises. Moreover these enterprises are of special importance for the national labour market, because 65.5 % of the Austrian employees are part of those enterprises.

Most of the small and medium sized enterprises costitute family enterprises simultaneously. In Austria about 75% of all enterprises are family enterprises, and approximately 70% of all employed persons are working in family enterprises (Pichler, Bornett, 2005, p. 125; Feldbauer-Durst müller et al., 2007, p. 428; Hasch et al., 2000, p. 62).

In spite of the high economical relevance management accounting deals with the subject family enterprises in empirical research rather little. Theoretical research in management accounting in family enterprises is focused either on foundations or successions of enterprises or on the special socio-economic aspects given by the combination of enterprise and owner family (FeldbauerDurstmüller et al., 2007, p. 428; Klein, 2004, p. 54 f.).

This paper questions, weather general objectives of family enterprises differ from those of non-family enterprises. Based on the hypothesis that family enterprises aim at humane objectives to a greater extent and at inancial objectives to a lesser extent than non-family enterprises the results of an empirical study for the region Upper-Austria are presented.

  1. 2. Prior literature

Besides, practical orientated articles (e.g. Schröder, 1998; Schäfer-Kunz, 2006) there are only few scientiic and theoretical orientated papers or books dealing with the topics small and medium sized enterprises, management accounting and family enterprises simultaneously.

This work is based on following theoretical approaches: Hahn argues that due to serious changes in business environment more coordination and management in medium-sized family enterprises is needed. Controller ship — seen as management assistance — is suitable to perform this task (Hahn, 1994,

p. 125 f.). Horváth uses the Three-Circle Model built up by Tagiuri & Davis, developed by Gersick et al., to describe the management system in medium sized family enterprises as an extensive interaction of business, family and ownership (Tagiuri, Davis, 1992, p. 49; Gersick, Davis, McCollom Hampton, 1997, p. 5 f.; Horváth, 1999, p. 121 f.). Based on Horváth’s conception for controller ship Feldbauer-Durstmüller and Haas elaborated a system for information, planning and controlling in medium sized family enterprises (Horváth, 2009, p. 91 f.; Feldbauer-Durstmüller, Haas, 2008, p. 107 f.).

Neither Hahn nor Horváth have conducted empirical research to verify their theoretical work, but empirical research on this topic is published for Germany (e.g. Ossadnik, et al., 2004, p. 622 f; Berens, Püthe, Siemes, 2005, p. 186 f.).

For Anglo-American countries empirical research usually deals either with objectives of enterprises in general or micro and small enterprises (e.g. Upton et al., 2001; Peel, Bridge, 1999; Gibson, Cassar, 2002; Stonehouse, Pemberton, 2002), but there is no empirical research in the special context of management accounting in small and medium sized family enterprises so far (Duller, Haas, 2009, p. 33f.).

  1. 3. Hypothesis Development

Previous research indicates that business objectives in family enterprises are less infuenced by monetary objectives, but more determined by interests of stakeholders and human objectives (Fröhlich, Pichler, 1988, p. 95 f.). Moreover, descriptive empirical research for Germany indicates that in family enterprises liquidity protection, employee satisfaction and entrepreneurial independence are more important objectives than in non-family enterprises (Günther, Gonschorek, 2006, p. 7).

Using exploratory qualitative empirical methods Spence and Rutherfoord looked at social responsibility and proit maximisation in small irms in UK. One result out of twenty face-to-face interviews was the conclusion, that most small irms are likely to be dominated by objectives concerning subsistence or social issues (Spence, Rutherford, 2002, p. 137 f.).91

Due to the fact, that the distinction between family and non-family enterprises differs and the classiication concerning size is ambiguous, research results from other countries and samples are possibly not adequate for Austria.

Therefore, the following hypotheses will be tested in this survey: Family enterprises aim at humane objectives to a greater extent than non-family enterprises.

Family enterprises aim at inancial objectives to a lesser extent than nonfamily enterprises.

Medium sized enterprises aim at humane objectives to a greater extent than large sized enterprises.

Medium sized enterprises aim at inancial objectives to a lesser extent than large sized enterprises.

Furthermore, Fröhlich and Pichler argue that family enterprises’ biggest interest is to survive (Fröhlich, Pichler, 1988, p. 98). For this reason it is indicated that family enterprises aspire to a smaller return of equity than nonfamily enterprises. This will be tested with the hypotheses:

Family enterprises aspire to a smaller return of equity than non-family enterprises.Medium sized enterprises aspire to a smaller return of equity than large sized enterprises.

  1. 4. Research method and results

The research method is based on a standardized questionnaire, which was available via internet. All enterprises in Upper Austria with 50 or more employees (1180 enterprises) were invited to take part in the survey. Each enterprise got an individual link, which ensured that the completion of the questionnaire was possible for interesting enterprises exclusively. After completion the individual link was locked automatically to guarantee once-only participation.

The usable return was 236 enterprises or 20%, 189 of them declared themselves as family enterprises (80.1%). Due to the fact that the proportion of family enterprises in Austria is about 70-80%, the sample can be treated as representative.

The main point for further discussions is how a family enterprise is deined. There are many different approaches to deine it. Some of the popular criterions are the following (Feldbauer-Durstmüller et al., 2007, p. 430):

Level of equity held by a single family

Degree of implication of the family in the management structure More than 50% of ownership is held by a family

A family group controls the business

In this survey the enterprises had to decide themselves weather they are a family enterprise or not according to (at least one of) the following criteria:

Arbitrary legal structure More than 50% ownership is held by family members or family close foundations

Family members are part of management Syndications of families or branches of families

In order to verify the given hypotheses concerning management accounting classical statistical tests were used (Chi-squared-Test, Fisher Exact Test). Family enterprises are more often than not small and medium enterprises, too. Therefore, each of the above hypotheses was tested with respect to structure and size.

Testing the given hypotheses with respect to structure (family versus nonfamily enterprises) and size (medium enterprises versus large enterprises) had the following results:

There was no signiicant difference in human objectives, neither for structure nor for size.

The same result was found for inancial objectives in general. Only the aspired return on equity showed signiicant differences for structure (p = 0.023) and size (p = 0.007).

This means that there is a signiicant difference in the aspired return of equity between medium sized and large enterprises (Figure 1 and Table 1) and also between family and non-family enterprises.

The correspondence analysis extracted two factors, the irst factor was mainly determined by size (number of employee), the second factor was less important and was mainly determined by size (turnover of enterprise). The structure (family business or non family business enterprise) was nearly completely determined by the irst factor. So the most important variable for prediction of the aspired equity rate is the size of an enterprise expressed by the number of employee.

  1. 5. Conclusions

Apart from the extent of the aspired return on equity the objectives of responding family enterprises do not differ from those of non-family enterprises. Moreover multi-variate analyses showed that for the aspired return of equity the determining factor is not structure, but size.

This result does not verify common theoretical research. Assuming the correctness of the theoretical statements at least two possible explanations can be given for the mismatch:

The situation for family enterprises has changed, because nowadays their owners are better educated in business administration than some years ago. Therefore more and more family enterprises act in a similar manner like nonfamily enterprises to keep up their chances in the market.

The sample size in this work is very small, especially for multivariate analyses.

Splitting the sample according to structure and size causes small frequencies in some categories, in particular large family-enterprises are very rare in the sample (and in Austria). So it is hard to ind evidence for any complex statement. More and even more detailed results could be found in a bigger sample.

To clarify the results a second survey has started in August 2009. This time the population is given by all medium and large enterprises in Austria. Moreover in cooperation with universities in Germany data for some federal states of German will be compared with Austrian data.


Berens, W., Püthe, T., Siemes, A., (2005), ‘Ausgestaltung der Controllingsysteme im Mittelstand — Ergebnisse einer Untersuchung’, Zeitschrift für Controlling und Management, 49 (3), pp. 186 — 191.

Commission of the Eurean Communities (Ed.), (2003), ‘Commission Recommendation of 6 May 2003 concerning the deinition of micro, small and medium-sized enter-prises’, Oficial Journal of the European Union, L 124, 46, pp. 36 — 41.

Duller, C., Haas, T., (2009), ‘Unternehmensplanung und Controllinginstrumente im Mit-telstand. Empirische Kontingenzfaktoren der Unter neh mens größe und Unterneh-mensform (Familien unternehmen versus Nicht-Familienunternehmen)’, Lingnau, V.; Becker, A. (Ed.), Mittelstandscontrolling, Lohmar, pp. 25 — 50.

Feldbauer-Durstmüller, B., Wimmer, B., Duller, C., (2007), ‘Controlling in österreichischen Familienunternehmen — dargestellt am Bundes land Oberösterreich’, Zeitschrift für Planung und Unternehmens steuerung, 18 (4), pp. 427 — 443.

Feldbauer-Durstmüller, B., Haas, T., (2008), ‘Controlling-Konzeption für kleine und mit-tlere Familienunternehmen, Feldbauer-Durstmüller, B. et al. (Ed.), Familienun-ternehmen: Controlling, Finanz manage ment, Unternehmensrechnung und Wirt-schaftsprüfung, Steuern, Wien, pp. 107 — 136.

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Gersick, K. E., Davis, J. A., (1997), McCollom Hampton, M., Generation to generation: Life cycles of the family business, Boston.

Gibson, B., Cassar, G., (2002), ‘Planning Behaviour Variables in Small Firms’, Journal of Small Business Management, 40(3), pp. 171 — 186.

Greenacre, M., (2007), Correspondence Analysis in Practice, 2nd edition, Boca Raton, Fla.

Greenacre, M., Blasius, J., (2006), Multiple Correspondence Analysis and Related Methods, Boca Raton, Fla.

Günther, T., Gonschorek, T., (2006), Wert(e)orientierte Unternehmensführung im Mittelstand. Erste Ergebnisse einer empirischen Untersuchung, Dresdner Beiträge zur Betriebswirtschaftslehre, Nr. 114.

Hahn, D., (1994), Controlling in mittelständischen Familienunternehmungen, Hinterhuber, H. H., (Ed.) Die mittelständische Familien unter nehmung: Die Integration der beiden Subsysteme Familie und Unternehmung in den 90er Jahren, Frankfurt/M., pp. 125 — 153.

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Pichler, J. H., Bornett, W., (2005), ‘Wirtschaftliche Bedeutung der kleinen und mittleren Unternehmen (KMU) in Österreich’, Schauer, R. et al., (Ed.) Mittelständische Unternehmen: Probleme der Unter neh mens nachfolge, Linz, S., pp. 117 — 150.

Schäfer-Kunz, J., (2006), ‘Controlling in Familienunternehmen: Zwischen Intuition und Navigation’, Böllhoff, C., et al. (Ed.) Spitzen leistungen in Familienunternehmen: Ein Manage ment handbuch, Stuttgart, pp. 85 — 100.

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Outsourcing: The Advantages And Disadvantages Of Outsourcing By F. John Reh, About.com Guide

Outsourcing occurs when a business secures (purchases) products and/or services from a third party, as opposed to producing them in-house. There are several advantages and disadvantages to outsourcing.

Advantages of Outsourcing

One of the biggest advantages can be lower personnel costs. By outsourcing job duties to non-employees, a business does not have to pay consistent wages or offer additional employee benefits. The company may pay lower taxes because independent contractors, the people who complete the outsourced projects, pay their own withholding, social security, and other taxes. This can add up to substantial savings.

Some businesses choose to take their outsourcing one step further by choosing a vendor, located in another part of the world. Doing so typically saves them more money because they end up paying a much lower wage than would be necessary in their home country. The disadvantage is that these vendors may not understand English and communication is more difficult

Many times, outsourcing speeds up production time. Since the third-party vendor will only be concentrating on one specific task, instead of numerous office duties, actual production time can be greatly increased.

Outsourcing gives a business the flexibility to change third-party vendors whenever necessary. This process is not as time-consuming as the normal employee hiring process, because they are not screening individuals, they are considering established companies with proven track records.

An excellent example of this is customer service. When a business outsources its customer service department, it does not have to hire and oversee thirty individual operators. Instead, it can hire one call center, which will perform all needed tasks.

Recent studies show that information technology-related tasks are outsourced more than anything else. Other common department functions that are outsourced include: human relations, training, accounting and supply management.

Whether a business chooses to outsource on a temporary basis or permanently, the advantages are well worth the decision to do so. Most businesses, which set out to outsource temporarily end up making an ongoing commitment.

Disadvantages of Outsourcing

One of the biggest disadvantages of outsourcing is undesirable results. This is especially true when a company hires a third-party vendor to mass produce a product. In the event that the finished products do not meet quality standards, the manufacturing process must be repeated by a different vendor.

Not only is this a waste of time and materials, it can also be very costly for the company who outsourced the project. They are essentially paying twice for the same job. In addition there is always the possibility that the company may lose sales, during this same period because of the lack of available product.

Another disadvantage of outsourcing is a loss of jobs. Many times work is outsourced simply as a means to save money. Outsourcing to a foreign country typically saves a company a great deal in wages. So, the choice is made to reduce their local workforce, at the expense of the laid-off employees.

In turn, it can cause community uproar and even a decrease in business and profits. This happens when local consumers make the decision to shop elsewhere, as a way to voice their disdain.

Outsourcing customer service jobs, to foreign countries, is on the rise. Many large corporations including credit card companies, shopping networks and computer manufacturers are making this change.

The problem with this is a lack of communication. It can be very frustrating for a consumer who is calling in with a customer service issue. When this individual cannot understand the customer service representative they are speaking with, it just causes more frustration and does little to solve the problem.

Management 101

By F. John Reh, About.com Guide

What is management? What do managers do? How do I manage?

These are standard questions that most of us in the management profession have been asked more than once. And questions we asked once in our careers too. Here, then, is a basic look at management, a primer, Management 101 from my perspective.

Art and Science

Management is both art and science. It is the art of making people more effective than they would have been without you. The science is in how you do that. There are four basic pillars: plan, organize, direct, and monitor.

Make Them More Effective

Four workers can make 6 units in an eight-hour shift without a manager. If I hire you to manage them and they still make 6 units a day, what is the benefit to my business of having hired you? On the other hand, if they now make 8 units per day, you, the manager, have value.

The same analogy applies to service, or retail, or teaching, or any other kind of work. Can your group handle more customer calls with you than without? Sell higher value merchandise? Impart knowledge more effectively? etc. That is the value of management — making a group of individual more effective.

Basic Management Skill #1: Plan

Management starts with planning. Good management starts with good planning.

And proper prior planning prevents… well, you know the rest of that one.

Without a plan you will never succeed. If you happen to make it to the goal, it will have been by luck or chance and is not repeatable. You may make it as a flash-in-the-pan, an overnight sensation, but you will never have the track record of accomplishments of which success is made.

Figure out what your goal is (or listen when your boss tells you). Then figure out the best way to get there. What resources do you have? What can you get? Compare strengths and weaknesses of individuals and other resources. Will putting four workers on a task that takes 14 hours cost less than renting a machine that can do the same task with one worker in 6 hours? If you change the first shift from an 8 AM start to a 10 AM start, can they handle the early evening rush so you don’t have to hire an extra person for the second shift?

Look at all the probable scenarios. Plan for them. Figure out the worst possible scenario and plan for that too. Evaluate your different plans and develop what, in your best judgement, will work the best and what you will do if it doesn’t.

TIP: One of the most often overlooked management planning tools is the most effective. Ask the people doing the work for their input.

Basic Management Skill #2: Organize

Now that you have a plan, you have to make it happen. Is everything ready ahead of your group so the right stuff will get to your group at the right time? Is your group prepared to do its part of the plan? Is the downstream organization ready for what your group will deliver and when it will arrive?

Are the workers trained? Are they motivated? Do they have the equipment they need? Are there spare parts available for the equipment? Has purchasing ordered the material? Is it the right stuff? Will it get here on the appropriate schedule?

Do the legwork to make sure everything needed to execute the plan is ready to go, or will be when it is needed. Check back to make sure that everyone understands their role and the importance of their role to the overall success.

Basic Management Skill #3: Direct

Now flip the «ON» switch. Tell people what they need to do. I like to think of this part like conducting an orchestra. Everyone in the orchestra has the music in front of them. They know which section is playing which piece and when. They know when to come in, what to play, and when to stop again. The conductor cues each section to make the music happen. That’s your job here. You’ve given all your musicians (workers) the sheet music (the plan). You have the right number of musicians (workers) in each section (department), and you’ve arranged the sections on stage so the music will sound best (you have organized the work). Now you need only to tap the podium lightly with your baton to get their attention and give the downbeat.

Basic Management Skill #4: Monitor

Now that you have everything moving, you have to keep an eye on things. Make sure everything is going according to the plan. When it isn’t going according to plan, you need to step in and adjust the plan, just as the orchestra conductor will adjust the tempo.

Problems will come up. Someone will get sick. A part won’t be delivered on time. A key customer will go bankrupt. That is why you developed a contingency plan in the first place. You, as the manager, have to be always aware of what’s going on so you can make the adjustments required.

This is an iterative process. When something is out of sync, you need to Plan a fix, Organize the resources to make it work, Direct the people who will make it happen, and continue to Monitor the effect of the change.

Is It Worth It

Managing people is not easy. However, it can be done successfully. And it can be a very rewarding experience. Remember that management, like any other skill, is something that you can improve at with study and practice.

Performance Management is NOT an Annual Appraisal

A Performance Management System That Makes a Difference By Susan M. Heathfield, About.com Guide

Performance Management System Defined

Performance management begins when a job is defined. Performance management ends when an employee leaves the company. Between these points, the following must occur for a working performance management system.

Develop clear job descriptions.

Job descriptions are the first step in selecting the right person for the job, and setting that person up to succeed. I do not mean traditional job descriptions that ended with «and whatever else you are assigned by the manager.» I believe job descriptions provide a framework so the applicants and new employees understand the expectations for the position. I much prefer to see these expressed as outcomes.

Select appropriate people with an appropriate selection process.

People have different skills and interests. Jobs have different requirements. Selection is the process of matching the skills and interests of a person to the requirements of a job. Finding a good job «fit» is exceptionally important. Use a selection process that maximizes input from potential coworkers and the person to whom the position will report. See What Great Managers Do Differently for more discussion about selection.

Negotiate requirements and accomplishment-based performance standards, outcomes, and measures.

Ferdinand F. Fournies, in his long-lasting book, Why Employees Don’t Do What They’re Supposed to Do and What to Do About It, clearly states the first reason why people sometimes fail to meet your expectations. He says employees don’t know what they’re supposed to do.

Provide effective orientation, education, and training.

Before a person can do the best job, he or she must have the information necessary to perform. This includes job-related, position-related, and companyrelated information; an excellent understanding of product and process use and requirements; and complete knowledge about customer needs and requirements.

Provide on-going coaching and feedback.

People need ongoing, consistent feedback that addresses both their strengths and the weaker areas of their performance. Effective feedback focuses more intensely on helping people build on their strengths. Feedback is a two-way process that encourages the employee to seek help. Feedback is usually more effective when requested. Create a work environment in which people feel comfortable asking, «How do you think I’m doing?»

Conduct quarterly performance development discussions.

If supervisors are giving employees frequent feedback and coaching, performance reviews can change from negative, evaluative, one-sided presentations to positive, planning meetings. Held quarterly, employees always know how they are performing and their next goals and challenges.

Design effective compensation and recognition systems that reward people for their contributions.

The power of an effective compensation system is frequently overlooked and downplayed in some employee motivation-related literature. I think this is a mistake. It is often not so much about the money as it is about the message any reward or recognition sends to an individual about their value. Money has become a metaphor for value.

Provide promotional/career development opportunities for staff.

The supervisor plays a key role in helping staff develop their potential. Growth goals, changing and challenging job assignments and responsibilities, and cross-training contribute to the development of a more effective staff member. Help to create an environment in which people feel comfortable to experiment and make mistakes.

Assist with exit interviews to understand WHY valued employees leave the organization.

When a valued person leaves the company, it is necessary to understand why the person is leaving. This feedback will help the company improve its work environment for people. An improved work environment for people results in the retention of valued staff. If your environment truly encourages discussion and feedback, you will learn nothing new in an exit interview.

The impact of the Human Resources professional on this performance management system is powerful.

You can encourage managers and supervisors to take responsibility for managing performance in their work area and cooperating for performance improvement across the organization.

You can promote the understanding that even if one individual’s work area, shift, or department is successful, this will not result in a well-served customer. Because all components of your organization are part of a system that creates value for your customer, all components must be successful.

So, too, in your performance management system, all components must be present and working to create value for each employee and the organization.

How To Be A Better Manager

By F. John Reh, About.com Guide

Need For Good Managers Increasing

The need for good managers is not going away. It is intensifying. With ‘flatter’ organizations and self-directed teams becoming common; with personal computers and networks making information available to more people more quickly; the raw number of managers needed is decreasing. However, the need for good managers, people who can manage themselves and others in a high stress environment, is increasing.

I believe anyone can be a good manager. It is as much trainable skill as it is inherent ability; as much science as art. Here are some things that make you a better manager:

As a person:

You have confidence in yourself and your abilities. You are happy with who you are, but you are still learning and getting better.

You are something of an extrovert. You don’t have to be the life of the party, but you can’t be a wallflower. Management is a people skill — it’s not the job for someone who doesn’t enjoy people.

You are honest and straight forward. Your success depends heavily on the trust of others.

You are an includer not an excluder. You bring others into what you do. You don’t exclude other because they lack certain attributes.

You have a ‘presence’. Managers must lead. Effective leaders have a quality about them that makes people notice when they enter a room.

On the job:

You are consistent, but not rigid; dependable, but can change your mind.

You make decisions, but easily accept input from others.

You are a little bit crazy. You think out-of-the box. You try new things and if they fail, you admit the mistake, but don’t apologize for having tried.

You are not afraid to «do the math». You make plans and schedules and work toward them.

You are nimble and can change plans quickly, but you are not flighty. You see information as a tool to be used, not as power to be hoarded.

Take a look at yourself against this list. Find the places where you can improve and then get going. And , if you need help, remember that’s what this site is all about —

Helping new managers get started and experienced managers get better. Management Pros Share Their Secrets

By F. John Reh, About.com Guide

Who better to offer tips and insight to someone just starting their management career than the seasoned professional manager. We are fortunate to have such a group of management professionals frequent the Management Forum on this site. Recently, I asked them this question:

«Remember way back when — when you got your first management job. What do you wish someone had told you then? What would be the one tip you would give to a manager just starting out?»

Their answers reflect the character and style of these individuals; their wisdom; their experience.

Here’s a list of Ten Top Tips:

(M) Consult, consult, consult.

(A) You are managing people, not projects or product development or customer service or any other departmental mission. People are complicated and messy. They aren’t machines any more than you are; they won’t be the same every day, no matter how much you’d like them to be. So stay alert to what’s going on with them.

(K) For the first couple of days, sit down and get to know your staff. Find out what they do, what their goals are, what they like to do in their free time, etc. Several years ago, I watched a new manager start with a company and for the first month or so, didn’t talk to any of his staff. A month later, he wondered why people were handing in their two week notices.

Get to know your staff!!

(R) Learn how to deal with problem or resentful employees. I was promoted into my position over a longer-term employee. She was made my assistant. (Before everyone raises the sexism issue, I was the ONLY male manager and was promoted on performance.) She had a great deal of resentment and worked against me at every turn. After floundering around for a while, I finally took her into the office and calmly explained the facts of life to her, that I was the manager and if she couldn’t work with me one of us would be leaving and it wouldn’t be me. She straightened out after that and we eventually developed a good relationship.

Avoid re-inventing the wheel.

Everything doesn’t require your unique hand-print. Some things probably work just fine already. Also don’t think or act like you know everything, nothing breeds resentment more than arrogance. You may be smart, but there’s always someone smarter.

(MC) You are responsible for everything that happens in your scope of authority. Don’t ever think that just because you may not be doing the actual work, you are not responsible---you *are*. Unless you are comfortable with this basic fact, management is *not* for you.

The rewards come at a price. You will have to make decisions that will benefit the company as well as your staff....and quite often they are in direct conflict with each other. (You cannot be all things to all people....)

You do have a right to be human. Just because you are now management, does not mean that you can (or should) throw emotion out the window.

Laugh with your people....let them know that you are not a humorless troll Be honest with your people...you expect the same from them. Even if it’s bad news, honesty does help lessen the blow.

Defend your people! They will reward you with their loyalty.

As exciting and as insightful as these tips for new managers are, there is one more we should add. Management is not for everybody. As (A2) put it «it’s never too late to say thanks but no thanks....I’m happy where I am.»

David Ruth

Low-status leaders are ignored

How a leader is picked impacts whether others will follow

People who are deemed social misfits or «losers» aren’t effective leaders, even if they are crusading for a cause that would benefit a larger group, according to new research from Rice University, the University of Texas and Universitat de Valencia.

The study’s authors observed the contributions of 80 participants in a repeated public-goods game and found that players were more likely to mimic the actions of a leader they perceived as a high-status individual; they ignored leaders perceived as low-status and, when they had a chance, punished them for trying to lead.

«In a team, naming someone a leader is not sufficient to create effective leadership,» said Rick Wilson, co-author of the study and professor of political science and statistics and psychology at Rice. «The status of the leader — the way in which the leader is chosen — determines the extent to which the rest of the subjects will follow.»

In each round of the research experiment, players were given 50 experimental currency units (ECUs) and had to decide what portion to keep for themselves and how much to contribute to a group account. Whatever was put into the group account was doubled and then split equally by the group of four. For any individual, this meant that it was better to retain everything for their private account, since each ECU put into the group account would yield only a .5 ECU return. However, if everyone in the group put in everything, they would each double their ECUs — hence the public-goods problem.

Each group had a leader whose contributions everyone could see. The leader was determined by scores on an arbitrary trivia quiz. In half the experiments, the leader was the player who had the highest score (high status); in the other half, the player who had the lowest score (low status) was designated as the leader. The group members were told how their leader was chosen.

At the end of each of the 20 rounds, each follower observed his or her own earnings and the leader’s contributions. The leader observed the contributions of each of the followers. On average, players allocated between 40 and 50 percent of their ECUs to the public pot, whether they had a highor low-status leader. However, contributions from followers with low-status leaders dropped off in later rounds even though their leaders began giving more and more, crusading for followers to make greater contributions to the public pot that could benefit everyone in the group.

Groups with high-status leaders showed greater stability, and the followers were more likely to imitate their leaders — even though those leaders maintained the amount of their initial contributions.

«In teams with high-status leaders, followers are more likely to go along with them, even though the leader does not necessarily set a good example,» Wilson said. «A high-status leader should be willing to risk making unilaterally high contributions to the public good, because the followers will do the same.»

Wilson and his co-authors, Catherine Eckel of the University of Texas and Enrique Fatas of the Universitat de Valencia, also studied the effect of punishment. In the 21st round of the game, followers were given the option to punish the leader by issuing points that decreased a player’s profits in the experiment, and vice versa. Punishment was costly both for the person initiating the punishment and for the person punished.

Once punishment was introduced, contributions increased significantly for the groups with a low-status leader and only slightly for those with a high-status leader. However, low-status leaders punished others and, in turn, were punished more. They made significantly less money in the experiment than any other player.

«Punishment, while important to enforcing cooperative norms in many social dilemmas, does not boost contributions in all instances,» Wilson said. «The bottom line is that high-status leaders don’t need to punish because they are followed. Low-status leaders need to rely on punishment to motivate followers, but it is costly for everyone. It’s like they are the Rodney Dangerfields of the world — they get no respect. When they use punishment to boost contributions to the public good, their followers retaliate.»

Managing the Holiday Season

By F. John Reh, About.com Guide

Does it seem like everyone around you is getting into the Holidays, but you are too busy to join in? Do you feel like you are the only one doing any work anymore. Would you like some help getting through the Holiday season?

(Note: Retail business have their own special situation at this time of the year, so many of the thoughts below won’t apply to them. Instead, here’s a list of holiday management tips for the Retail Industry.)

Concentrate on what is important

The first rule of getting through the year end craze, without seeming like Ebenezer Scrooge and without losing your mind, is to concentrate your efforts on the important tasks.

What really has to be done? Do you have production deadlines to meet. What customer satisfaction issues require attention? Does a specific project need to be completed this year or would you get more creative work if it slips into January?

Focus your management effort on those things that have to get done this year. Encourage as much production as you can get, but make sure you are applying that effort to the issues where it will make a difference. This is a classic case of the 80/20 rule. (If you don’t know that rule or how to apply it, read Pareto’s Principle — The 80-20 Rule.)

Make last minute fiscal «adjustments»

Think about your financials. Should you accelerate income for this year to meet stakeholder expectations, or should you defer it into next year to reduce taxable income for this year. You plan your financials all year long, but this is your last chance to «buff them up».

Plan and budget

If you haven’t already done your planning and prepared your budgets for next year you had better get busy. (Here’s some help on building your annual budget.) It’s hard, especially in smaller companies, to take time away from more immediate issues in order to deal with planning, but it is essential.

If your budget planning cycle is done already, this is still a good time to review your plan. Have your secretary block out all your appointments for half an hour and just sit and think. Are we heading in the right direction? Do we know how to get there?

Reflect on the good things

This is also a great time to think back on all the good things you have accomplished this year. Take the time to congratulate yourself for these successes, whether they are financial successes or inter-personal successes.

Reward Key Employees

This is also another good time to recognize key employees and reward them for their contributions during the past year. Remember, that the behaviors and accomplishments for which you reward these employees are the behaviors you are encouraging for all your employees for next year.

If you pay holiday bonuses to the employees with the highest production you encourage everybody to produce. If you acknowledge those with the fewest errors, people will focus next year on reducing their errors. And if you praise the employees who excelled at customer service,... well you get the idea.

Thank all employees

Finally, thank all your employees. They all contributed in some measure to your success. Depending on your position in the organization, and your budget, this recognition may vary. It can be a hand-written note, a small gift, or a company party.

Set Specific Goals to Increase Success

Small Business Success Program: Business Success Lesson 2 By Susan Ward, About.com Guide

What one change can you make to increase your success ten fold? Learn how to set specific goals when goal setting and use specific goals in all your business planning. Goals need to be specific if we have any chance of accomplishing them. Setting specific goals when we’re goal setting sets us up for success rather than failure.

Setting Specific Goals

A specific goal is a goal that incorporates an action plan that outlines how you will achieve the goal, and a performance measure that tells you how you will evaluate the goal.

This is the goal setting formula for ensuring that you’re setting a specific goal:

«I will (goal + performance measure) BY (specific actions).»

The performance measure in the goal is often a date or a length of time, but it could be any objective criteria that you can use to determine whether or not you’ve accomplished the specific goal that you’ve set.

Suppose you’re goal setting because you want to lose weight. An example of a specific goal to help you meet this objective is:

«I will lose 10 pounds in two months BY running on a treadmill for half an hour six days a week.»

Setting Goals For Business Success

Before you can set specific goals designed to increase your business success, you need to know what you mean by success. I personally think that success means enjoying what you do, to the point that your work energizes you and creates happiness that spills over to your personal life. But what does «increased business success» mean to you?

Is it working less hours so you have more time to spend with your family? Is it having more energy to tackle your many tasks? Is it developing more confidence so you can sell your product or service more successfully or try something new?

Examples of Specific Success Goals

Depending on what the purpose of your goal setting exercise is, you might decide to set specific goals such as:

«One month from now, I will spend entire weekends with my family BY reorganizing my work schedule and learning how to delegate.»

«I will develop enough confidence to present my business plan to the bank BY faithfully completing every assignment in the «Increase Your Business Success in 10 Weeks» program.»

Goal Setting Tips

Success isn’t just a matter of a healthy bank account; think about what you really want to accomplish, no matter how outlandish it seems at first thought and set your goals accordingly.

A goal doesn’t have to be sweeping to be valuable; small goals are worth working on, too, because they can lead to big changes. For instance, «One month from now, I will work three hours less a week BY becoming better organized», is a perfectly acceptable specific goal.

Use this same specific goal setting formula in all your business planning, and you’ll quickly see an increase in the number of goals you accomplish!

Online Management Science PhD: Career Info

An Online Management Science PhD is an ideal option for mid-level and senior managers who wish to advance their careers and become leaders in their chosen field. Professionals working in government and higher education can also help their career advancement opportunities with an Online Management Science PhD.

Basics of an Online Management Science PhD

Online Management Science PhD programs are often self-directed research programs or online courses which focus on such subjects as mathematical modeling, forecasting, operational analysis and evaluation models. Other skills taught in these programs include detecting management fads, evaluating proposals and learning methods.

What Can I do with an Online Management Science PhD?

Graduates with an Online Management Science PhD are prepared for upperlevel positions in a variety of for-profit, non-profit and government organizations. Graduates are also qualified to enter the field of management and operations research. First developed by the military, operations research analysts use mathematics, science and engineering to find solutions for project goals and define problems.

Job Outlook for Careers Relating to an Online Management Science PhD While the highest ten percent of management and operations analysts earn

above $128,000 annually, the median wage is approximately $69,000 per year. The Bureau of Labor and Statistics (www.bls.org) estimates that job prospects will increase, but so will the competition.

Master of Network and Communications Management

A Master of Network and Communications Management program deals with advanced practices in networks, wireless devises and telecommunications. During your program you will study advanced techniques and theories for information security, telecommunication law, operation and management of networks, and communication systems for wireless components. Upon receiving your Master of Network and Communications Management degree you can go on to advanced levels in management as a network systems analyst, communications systems analyst or a computer software engineer. Please read on to find out more.

Reasons to Earn a Master of Network and Communications Management Technology within networks and communications are increasingly changing.

If your interest lies in being able to plan and coordinate network technologies, including voice and data communications, for different levels of organizations, a Master of Network and Communications Management program is for you. Upon graduating, you have the potential to become a leader as it relates to planning and designing networks, budget development and analysis of new technology trends.

Master of Network and Communications Management Career Opportunities.

Occupational Outlook

With rapid changes in technology, those in the network and communications industry should see good job opportunities. According to the Bureau of Labor Statistics, the field of network systems and data communications is said to be one of the top 10 fastest growing fields over the next five years.

Salary Information

According to the Occupational Outlook Handbook of the Bureau of Labor Statistics, the average salary for network systems and data communication analysts was a little over $60,000 in 2004.

Master of Network and Communications Management Degree Specifics Required Courses

Much of what you will learn in your Master of Network and Communications Management program will be theory-based. It is assumed that you will have basic knowledge of techniques, though some Master programs will build on those skills as well. Specific coursework that you will learn through may include:

Information Security

Telecommunication Law

Operation and Management of Networks

Communication Systems for Wireless Components Skills You Will Learn

You will develop skills in a variety of networking and communications scenarios. These skills will help you on your way to becoming a leader in your field. Upon completing a Master of Network and Communications Management program, you should be able to:

Design communication networks

Develop budgets and maintain finances for relevant equipment and services

Maintain security for networks and have an understanding of trends in the industry

Bachelor of Management and Leadership

A Bachelor of Management and Leadership teaches students the communication, organizational, and business skills they will need to begin working in the fulfilling world of management leadership. Individuals with a Bachelor of Management and Leadership go on to work in a variety of fields, including personnel recruitment, management analysis, and engineering management. Read on to find out more about how Bachelor of Management and Leadership degree programs work.

Why Earn a Bachelor of Management and Leadership?

If you’re looking for a way to use your leadership skills to create an efficient work environment and are interested in the management aspect of business, a career in management leadership could be for you. A Bachelor of Management and Leadership degree program sets the stage for success in the field by teaching students how to analyze and resolve conflicts, negotiate and communicate in a business setting, and make effective financial plans. Individuals with a Bachelor of Management and Leadership can choose from jobs in virtually any industry, including engineering, electronics, pharmacy, and mass communications.

Career Possibilities

Occupational Outlook and Demand for These Careers

The outlook for individuals in the management leadership field is good. According to the Occupational Outlook Handbook, employment of financial analysts and personal financial advisors, management analysts, and human resources managers is expected to increase faster than the national average through 2014. In addition to this growth, many opportunities will come about from the need to supplant employees who transfer to other professions or leave the work force.

Salary Information

According to the U.S. Department of Labor, the median yearly income of operations research analysts was $60,190 in May 2004. Engineering managers averaged $97,630, while office and administrative supervisors earned $41,030 in 2004.

Degree Specifics Coursework Requirements

In order to become eligible for graduation, students must complete coursework designed to help them succeed in their careers in the management leadership industry. While course names vary, classes typical of a Bachelor of Management and Leadership degree program include the following:

  • Conflict Resolution
  • Interpersonal Communication
  • Budget Planning
  • Ethics of Management
  • Human Resources and Leadership Skills You Will Learn

Individuals seeking a Bachelor of Management and Leadership must master certain skills before obtaining their degrees. In addition to an understanding of basic communication skills and management methods, students will also acquire knowledge and skills in the following areas:

  • Interpretation of data
  • Information synthesis and evaluation
  • Appropriate usage of media
  • Team building with diversity and equality
  • Theory of accounting and budget planning

The Management Myth

Most of management theory is inane, writes our correspondent, the founder of a consulting firm. If you want to succeed in business, don’t get an M.B.A. Study philosophy instead

By Matthew Stewart

During the seven years that I worked as a management consultant, I spent a lot of time trying to look older than I was. I became pretty good at furrowing my brow and putting on somber expressions. Those who saw through my disguise assumed I made up for my youth with a fabulous education in management. They were wrong about that. I don’t have an M.B.A. I have a doctoral degree in philosophy—nineteenth-century German philosophy, to be precise. Before I took a job telling managers of large corporations things that they arguably should have known already, my work experience was limited to part-time gigs tutoring surly undergraduates in the ways of Hegel and Nietzsche and to a handful of summer jobs, mostly in the less appetizing ends of the fast-food industry.

The strange thing about my utter lack of education in management was that it didn’t seem to matter. As a principal and founding partner of a consulting firm that eventually grew to 600 employees, I interviewed, hired, and worked alongside hundreds of business-school graduates, and the impression I formed of the M.B.A. experience was that it involved taking two years out of your life and going deeply into debt, all for the sake of learning how to keep a straight face while using phrases like «out-of-the-box thinking,» «win-win situation,» and «core competencies.» When it came to picking teammates, I generally held out higher hopes for those individuals who had used their university years to learn about something other than business administration.

After I left the consulting business, in a reversal of the usual order of things, I decided to check out the management literature. Partly, I wanted to «process» my own experience and find out what I had missed in skipping business school. Partly, I had a lot of time on my hands. As I plowed through tomes on competitive strategy, business process re-engineering, and the like, not once did I catch myself thinking, Damn! If only I had known this sooner! Instead, I found myself thinking things I never thought I’d think, like, I’d rather be reading Heidegger! It was a disturbing experience. It thickened the mystery around the question that had nagged me from the start of my business career: Why does management education exist?

Management theory came to life in 1899 with a simple question: «How many tons of pig iron bars can a worker load onto a rail car in the course of a working day?» The man behind this question was Frederick Winslow Taylor, the author of The Principles of Scientific Management and, by most accounts, the founding father of the whole management business.

Taylor was forty-three years old and on contract with the Bethlehem Steel Company when the pig iron question hit him. Staring out over an industrial yard that covered several square miles of the Pennsylvania landscape, he watched as laborers loaded ninety-two-pound bars onto rail cars. There were 80,000 tons’ worth of iron bars, which were to be carted off as fast as possible to meet new demand sparked by the Spanish-American War. Taylor narrowed his eyes: there was waste there, he was certain. After hastily reviewing the books at company headquarters, he estimated that the men were currently loading iron at the rate of twelve and a half tons per man per day.

Taylor stormed down to the yard with his assistants («college men,» he called them) and rounded up a group of top-notch lifters («first-class men»), who in this case happened to be ten «large, powerful Hungarians.» He offered to double the workers’ wages in exchange for their participation in an experiment. The Hungarians, eager to impress their apparent benefactor, put on a spirited show. Huffing up and down the rail car ramps, they loaded sixteen and a half tons in something under fourteen minutes. Taylor did the math: over a ten-hour day, it worked out to seventy-five tons per day per man. Naturally, he had to allow time for bathroom breaks, lunch, and rest periods, so he adjusted the figure approximately 40 percent downward. Henceforth, each laborer in the yard was assigned to load forty-seven and a half pig tons per day, with bonus pay for reaching the target and penalties for failing.

When the Hungarians realized that they were being asked to quadruple their previous daily workload, they howled and refused to work. So Taylor found a «high-priced man,» a lean Pennsylvania Dutchman whose intelligence he compared to that of an ox. Lured by the promise of a 60 percent increase in wages, from $1.15 to a whopping $1.85 a day, Taylor’s high-priced man loaded forty-five and three-quarters tons over the course of a grueling day—close enough, in Taylor’s mind, to count as the first victory for the methods of modern management.

Taylor went on to tackle the noble science of shoveling and a host of other topics of concern to his industrial clients. He declared that his new and unusual approach to solving business problems amounted to a «complete mental revolution.» Eventually, at the urging of his disciples, he called his method «scientific management.» Thus was born the idea that management is a science—a body of knowledge collected and nurtured by experts according to neutral, objective, and universal standards.

At the same moment was born the notion that management is a distinct function best handled by a distinct group of people—people characterized by a particular kind of education, way of speaking, and fashion sensibility. Taylor, who favored a manly kind of prose, expressed it best in passages like this:

… the science of handling pig iron is so great and amounts to so much that it is impossible for the man who is best suited to this type of work to understand the principles of this science, or even to work in accordance with these principles, without the aid of a man better educated than he is.

From a metaphysical perspective, one could say that Taylor was a «dualist»: there is brain, there is brawn, and the two, he believed, very rarely meet.

Taylor went around the country repeating his pig iron story and other tales from his days in the yard, and these narratives formed something like a set of scriptures for a new and highly motivated cult of management experts. This vanguard ultimately vaulted into the citadel of the Establishment with the creation of business schools. In the spring of 1908, Taylor met with several Harvard professors, and later that year Harvard opened the first graduate school in the country to offer a master’s degree in business. It based its first-year curriculum on Taylor’s scientific management. From 1909 to 1914, Taylor visited Cambridge every winter to deliver a series of lectures—inspirational discourses marred only by the habit he’d picked up on the shop floor of swearing at inappropriate moments.

Yet even as Taylor’s idea of management began to catch on, a number of flaws in his approach were evident. The first thing many observers noted about scientific management was that there was almost no science to it. The most significant variable in Taylor’s pig iron calculation was the 40 percent «adjustment» he made in extrapolating from a fourteen-minute sample to a full workday. Why time a bunch of Hungarians down to the second if you’re going to daub the results with such a great blob of fudge? When he was grilled before Congress on the matter, Taylor casually mentioned that in other experiments these «adjustments» ranged from 20 percent to 225 percent. He defended these unsightly «wags» (wild-ass guesses, in M.B.A.-speak) as the product of his «judgment» and «experience»—but, of course, the whole point of scientific management was to eliminate the reliance on such inscrutable variables.

One of the distinguishing features of anything that aspires to the name of science is the reproducibility of experimental results. Yet Taylor never published the data on which his pig iron or other conclusions were based. When Carl Barth, one of his devotees, took over the work at Bethlehem Steel, he found

Taylor’s data to be unusable. Another, even more fundamental feature of science—here I invoke the ghost of Karl Popper—is that it must produce falsifiable propositions. Insofar as Taylor limited his concern to prosaic activities such as lifting bars onto rail cars, he did produce propositions that were falsifiable—and, indeed, were often falsified. But whenever he raised his sights to management in general, he seemed capable only of soaring platitudes. At the end of the day his «method» amounted to a set of exhortations: Think harder! Work smarter! Buy a stopwatch!

The trouble with such claims isn’t that they are all wrong. It’s that they are too true. When a congressman asked him if his methods were open to misuse, Taylor replied, No. If management has the right state of mind, his methods will always lead to the correct result. Unfortunately, Taylor was right about that. Taylorism, like much of management theory to come, is at its core a collection of quasi-religious dicta on the virtue of being good at what you do, ensconced in a protective bubble of parables (otherwise known as case studies).

Curiously, Taylor and his college men often appeared to float free from the kind of accountability that they demanded from everybody else. Others might have been asked, for example: Did Bethlehem’s profits increase as a result of their work? Taylor, however, rarely addressed the question head-on. With good reason. Bethlehem fired him in 1901 and threw out his various systems. Yet this evident vacuum of concrete results did not stop Taylor from repeating his parables as he preached the doctrine of efficiency to countless audiences across the country.

In the management literature these days, Taylorism is presented, if at all, as a chapter of ancient history, a weird episode about an odd man with a stopwatch who appeared on the scene sometime after Columbus discovered the New World. Over the past century Taylor’s successors have developed a powerful battery of statistical methods and analytical approaches to business problems. And yet the world of management remains deeply Taylorist in its foundations.

At its best, management theory is part of the democratic promise of America. It aims to replace the despotism of the old bosses with the rule of scientific law. It offers economic power to all who have the talent and energy to attain it. The managerial revolution must be counted as part of the great widening of economic opportunity that has contributed so much to our prosperity. But, insofar as it pretends to a kind of esoteric certitude to which it is not entitled, management theory betrays the ideals on which it was founded.

That Taylorism and its modern variants are often just a way of putting labor in its place need hardly be stated: from the Hungarians’ point of view, the pig iron experiment was an infuriatingly obtuse way of demanding more work for less pay. That management theory represents a covert assault on capital, however, is equally true. (The Soviet five-year planning process took its inspiration directly from one of Taylor’s more ardent followers, the engineer H.

L. Gantt.) Much of management theory today is in fact the consecration of class interest—not of the capitalist class, nor of labor, but of a new social group: the management class.

I can confirm on the basis of personal experience that management consulting continues to worship at the shrine of numerology where Taylor made his first offering of blobs of fudge. In many of my own projects, I found myself compelled to pacify recalcitrant data with entirely confected numbers. But I cede the place of honor to a certain colleague, a gruff and street-smart Belgian whose hobby was to amass hunting trophies. The huntsman achieved some celebrity for having invented a new mathematical technique dubbed «the Two-Handed Regression.» When the data on the correlation between two variables revealed only a shapeless cloud—even though we knew damn well there had to be a correlation—he would simply place a pair of meaty hands on the offending bits of the cloud and reveal the straight line hiding from conventional mathematics.

The thing that makes modern management theory so painful to read isn’t usually the dearth of reliable empirical data. It’s that maddening papal infallibility. Oh sure, there are a few pearls of insight, and one or two stories about hero-CEOs that can hook you like bad popcorn. But the rest is just inane. Those who looked for the true meaning of «business process re-engineering,» the most overtly Taylorist of recent management fads, were ultimately rewarded with such gems of vacuity as «BPR is taking a blank sheet of paper to your business!» and «BPR means re-thinking everything, everything!»

Each new fad calls attention to one virtue or another—first it’s efficiency, then quality, next it’s customer satisfaction, then supplier satisfaction, then selfsatisfaction, and finally, at some point, it’s efficiency all over again. If it’s reminiscent of the kind of toothless wisdom offered in self-help literature, that’s because management theory is mostly a subgenre of self-help. Which isn’t to say it’s completely useless. But just as most people are able to lead fulfilling lives without consulting Deepak Chopra, most managers can probably spare themselves an education in management theory.

The world of management theorists remains exempt from accountability. In my experience, for what it’s worth, consultants monitored the progress of former clients about as diligently as they checked up on ex-spouses (of which there were many). Unless there was some hope of renewing the relationship (or dating a sister company), it was Hasta la vista, baby. And why should they have cared? Consultants’ recommendations have the same semantic properties as campaign promises: it’s almost freakish if they are remembered in the following year.

In one episode, when I got involved in winding up the failed subsidiary of a large European bank, I noticed on the expense ledger that a rival consulting firm had racked up $5 million in fees from the same subsidiary. «They were supposed to save the business,» said one client manager, rolling his eyes. «Actually,» he corrected himself, «they were supposed to keep the illusion going long enough for the boss to find a new job.» Was my competitor held to account for failing to turn around the business and/or violating the rock-solid ethical standards of consulting firms? On the contrary, it was ringing up even higher fees over in another wing of the same organization.

And so was I. In fact, we kind of liked failing businesses: there was usually plenty of money to be made in propping them up before they finally went under. After Enron, true enough, Arthur Andersen sank. But what happened to such stalwarts as McKinsey, which generated millions in fees from Enron and supplied it with its CEO? The Enron story wasn’t just about bad deeds or false accounts; it was about confusing sound business practices with faddish management ideas, celebrated with gusto by the leading lights of the management world all the way to the end of the party.

If you believed our chief of recruiting, the consulting firm I helped to found represented a complete revolution from the Taylorist practices of conventional organizations. Our firm wasn’t about bureaucratic control and robotic efficiency in the pursuit of profit. It was about love.

We were very much of the moment. In the 1990s, the gurus were unanimous in their conviction that the world was about to bring forth an entirely new mode of human cooperation, which they identified variously as the «information-based organization,» the «intellectual holding company,» the «learning organization,» and the «perpetually creative organization.» «R-I-P. Rip, shred, tear, mutilate, destroy that hierarchy,» said über-guru Tom Peters, with characteristic understatement. The «end of bureaucracy» is nigh, wrote Gifford Pinchot of «intrapreneuring» fame. According to all the experts, the enemy of the «new» organization was lurking in every episode of Leave It to Beaver.

Many good things can be said about the «new» organization of the 1990s. And who would want to take a stand against creativity, freedom, empowerment, and—yes, let’s call it by its name—love? One thing that cannot be said of the «new» organization, however, is that it is new.

In 1983, a Harvard Business School professor, Rosabeth Moss Kanter, beat the would-be revolutionaries of the nineties to the punch when she argued that rigid «segmentalist» corporate bureaucracies were in the process of giving way to new «integrative» organizations, which were «informal» and «changeoriented.» But Kanter was just summarizing a view that had currency at least as early as 1961, when Tom Burns and G. M. Stalker published an influential book criticizing the old, «mechanistic» organization and championing the new, «organic» one. In language that eerily anticipated many a dot-com prospectus, they described how innovative firms benefited from «lateral» versus «vertical» information flows, the use of «ad hoc» centers of coordination, and the continuous redefinition of jobs. The «flat» organization was first explicitly celebrated by James C. Worthy, in his study of Sears in the 1940s, and W. B. Given coined the term «bottom-up management» in 1949. And then there was Mary Parker Follett, who in the 1920s attacked «departmentalized» thinking, praised change-oriented and informal structures, and—Rosabeth Moss Kanter fans please take note—advocated the «integrative» organization.

If there was a defining moment in this long and strangely forgetful tradition of «humanist» organization theory—a single case that best explains the meaning of the infinitely repeating whole—it was arguably the work of Professor Elton Mayo of the Harvard Business School in the 1920s. Mayo, an Australian, was everything Taylor was not: sophisticated, educated at the finest institutions, a little distant and effete, and perhaps too familiar with Freudian psychoanalysis for his own good.

A researcher named Homer Hibarger had been testing theories about the effect of workplace illumination on worker productivity. His work, not surprisingly, had been sponsored by a maker of electric lightbulbs. While a group of female workers assembled telephone relays and receiver coils, Homer turned the lights up. Productivity went up. Then he turned the lights down. Productivity still went up! Puzzled, Homer tried a new series of interventions. First, he told the «girls» that they would be entitled to two five-minute breaks every day. Productivity went up. Next it was six breaks a day. Productivity went up again. Then he let them leave an hour early every day. Up again. Free lunches and refreshments. Up! Then Homer cut the breaks, reinstated the old workday, and scrapped the free food. But productivity barely dipped at all.

Mayo, who was brought in to make sense of this, was exultant. His theory: the various interventions in workplace routine were as nothing compared with the new interpersonal dynamics generated by the experimental situation itself.

«What actually happened,» he wrote, «was that six individuals became a team and the team gave itself wholeheartedly and spontaneously to cooperation … They felt themselves to be participating, freely and without afterthought, and were happy in the knowledge that they were working without coercion.» The lessons Mayo drew from the experiment are in fact indistinguishable from those championed by the gurus of the nineties: vertical hierarchies based on concepts of rationality and control are bad; flat organizations based on freedom, teamwork, and fluid job definitions are good.

On further scrutiny, however, it turned out that two workers who were deemed early on to be «uncooperative» had been replaced with friendlier women. Even more disturbing, these exceptionally cooperative individuals earned significantly higher wages for their participation in the experiment. Later, in response to his critics, Mayo insisted that something so crude as financial incentives could not possibly explain the miracles he witnessed. That didn’t make his method any more «scientific.»

Mayo’s work sheds light on the dark side of the «humanist» tradition in management theory. There is something undeniably creepy about a clipboardbearing man hovering around a group of factory women, flicking the lights on and off and dishing out candy bars. All of that humanity—as anyone in my old firm could have told you—was just a more subtle form of bureaucratic control. It was a way of harnessing the workers’ sense of identity and well-being to the goals of the organization, an effort to get each worker to participate in an ever more refined form of her own enslavement.

So why is Mayo’s message constantly recycled and presented as something radically new and liberating? Why does every new management theorist seem to want to outdo Chairman Mao in calling for perpetual havoc on the old order? Very simply, because all economic organizations involve at least some degree of power, and power always pisses people off. That is the human condition. At the end of the day, it isn’t a new world order that the management theorists are after; it’s the sensation of the revolutionary moment. They long for that exhilarating instant when they’re fighting the good fight and imagining a future utopia. What happens after the revolution—civil war and Stalinism being good bets—could not be of less concern.

Between them, Taylor and Mayo carved up the world of management theory. According to my scientific sampling, you can save yourself from reading about 99 percent of all the management literature once you master this dialectic between rationalists and humanists. The Taylorite rationalist says: Be efficient! The Mayo-ist humanist replies: Hey, these are people we’re talking about! And the debate goes on. Ultimately, it’s just another installment in the ongoing saga of reason and passion, of the individual and the group.

The tragedy, for those who value their reading time, is that Rousseau and Shakespeare said it all much, much better. In the 5,200 years since the

Sumerians first etched their pictograms on clay tablets, come to think of it, human beings have produced an astonishing wealth of creative expression on the topics of reason, passion, and living with other people. In books, poems, plays, music, works of art, and plain old graffiti, they have explored what it means to struggle against adversity, to apply their extraordinary faculty of reason to the world, and to confront the naked truth about what motivates their fellow human animals. These works are every bit as relevant to the dilemmas faced by managers in their quest to make the world a more productive place as any of the management literature.

In the case of my old firm, incidentally, the endgame was civil war. Those who talked loudest about the ideals of the «new» organization, as it turned out, had the least love in their hearts. By a strange twist of fate, I owe the longevity of my own consulting career to this circumstance. When I first announced my intention to withdraw from the firm in order to pursue my vocation as an unpublishable philosopher at large, my partners let me know that they would gladly regard my investment in the firm as a selfless contribution to their financial well-being. By the time I managed to extricate myself from their loving embrace, nearly three years later, the partnership had for other reasons descended into the kind of Hobbesian war of all against all from which only the lawyers emerge smiling. The firm was temporarily rescued by a dot-com company, but within a year both the savior and the saved collapsed in a richly deserved bankruptcy. Of course, your experience in a «new» organization may be different.

My colleagues usually spoke fondly of their years at business school. Most made great friends there, and quite a few found love. All were certain that their degree was useful in advancing their careers. But what does an M.B.A. do for you that a doctorate in philosophy can’t do better?

The first point to note is that management education confers some benefits that have little to do with either management or education. Like an elaborate tattoo on an aboriginal warrior, an M.B.A. is a way of signaling just how deeply and irrevocably committed you are to a career in management. The degree also provides a tidy hoard of what sociologists call «social capital»—or what the rest of us, notwithstanding the invention of the PalmPilot, call a «Rolodex.»

For companies, M.B.A. programs can be a way to outsource recruiting. Marvin Bower, McKinsey’s managing director from 1950 to 1967, was the first to understand this fact, and he built a legendary company around it. Through careful cultivation of the deans and judicious philanthropy, Bower secured a quasi-monopoly on Baker Scholars (the handful of top students at the Harvard Business School). Bower was not so foolish as to imagine that these scholars were of interest on account of the education they received. Rather, they were valuable because they were among the smartest, most ambitious, and bestconnected individuals of their generation. Harvard had done him the favor of scouring the landscape, attracting and screening vast numbers of applicants, further testing those who matriculated, and then serving up the best and the brightest for Bower’s delectation.

Of course, management education does involve the transfer of weighty bodies of technical knowledge that have accumulated since Taylor first put the management-industrial complex in motion—accounting, statistical analysis,decision modeling, and so forth—and these can prove quite useful to students, depending on their career trajectories. But the «value-add» here is far more limited than Mom or Dad tend to think. In most managerial jobs, almost everything you need to know to succeed must be learned on the job; for the rest, you should consider whether it might have been acquired with less time and at less expense.

The best business schools will tell you that management education is mainly about building skills—one of the most important of which is the ability to think (or what the M.B.A.s call «problem solving»). But do they manage to teach such skills?

I once sat through a presentation in which a consultant, a Harvard M.B.A., showed a client, the manager of a large financial institution in a developing country, how the client company’s «competitive advantage» could be analyzed in terms of «the five forces.» He even used a graphic borrowed directly from guru-of-the-moment Michael Porter’s bestselling work on «competitive strategy.» Not for the first time, I was embarrassed to call myself a consultant. As it happens, the client, too, had a Harvard M.B.A. «No,» he said, shaking his head with feigned chagrin. «There are only three forces in this case. And two of them are in the Finance Ministry.»

What they don’t seem to teach you in business school is that «the five forces» and «the seven Cs» and every other generic framework for problem solving are heuristics: they can lead you to solutions, but they cannot make you think. Case studies may provide an effective way to think business problems through, but the point is rather lost if students come away imagining that you can go home once you’ve put all of your eggs into a two-by-two growth-share matrix.

Next to analysis, communication skills must count among the most important for future masters of the universe. To their credit, business schools do stress these skills, and force their students to engage in make-believe presentations to one another. On the whole, however, management education has been less than a boon for those who value free and meaningful speech. M.B.A.s have taken obfuscatory jargon—otherwise known as bullshit—to a level that would have made even the Scholastics blanch. As students of philosophy know, Descartes dismantled the edifice of medieval thought by writing clearly and showing that knowledge, by its nature, is intelligible, not obscure.

Beyond building skills, business training must be about values. As I write this, I know that my M.B.A. friends are squirming in their seats. They’ve all been forced to sit through an «ethics» course, in which they learned to toss around yet more fancy phrases like «the categorical imperative» and discuss borderline criminal behavior, such as what’s a legitimate hotel bill and what’s just plain stealing from the expense account, how to tell the difference between a pat on the shoulder and sexual harassment, and so on. But, as anyone who has studied Aristotle will know, «values» aren’t something you bump into from time to time during the course of a business career. All of business is about values, all of the time. Notwithstanding the ostentatious use of stopwatches, Taylor’s pig iron case was not a description of some aspect of physical reality—how many tons can a worker lift? It was a prescription—how many tons should a worker lift? The real issue at stake in Mayo’s telephone factory was not factual—how can we best establish a sense of teamwork? It was moral—how much of a worker’s sense of identity and well-being does a business have a right to harness for its purposes?

The recognition that management theory is a sadly neglected subdiscipline of philosophy began with an experience of déjà vu. As I plowed through my shelfload of bad management books, I beheld a discipline that consists mainly of unverifiable propositions and cryptic anecdotes, is rarely if ever held accountable, and produces an inordinate number of catastrophically bad writers. It was all too familiar. There are, however, at least two crucial differences between philosophers and their wayward cousins. The first and most important is that philosophers are much better at knowing what they don’t know. The second is money. In a sense, management theory is what happens to philosophers when you pay them too much.

The idea that philosophy is an inherently academic pursuit is a recent and diabolical invention. Epicurus, Descartes, Spinoza, Locke, Hume, Nietzsche, and most of the other great philosophers of history were not professors of philosophy. If any were to come to life and witness what has happened to their discipline, I think they’d run for the hills. Still, you go to war with the philosophers you have, as they say, not the ones in the hills. And since I’m counting on them to seize the commanding heights of the global economy, let me indulge in some management advice for today’s academic philosophers:

■Expand the domain of your analysis! Why so many studies of Wittgenstein and none of Taylor, the man who invented the social class that now rules the world?

■Hire people with greater diversity of experience! And no, that does not mean taking someone from the University of Hawaii. You are building a network—a team of like-minded individuals who together can change the world.

■Remember the three Cs: Communication, Communication, Communication! Philosophers (other than those who have succumbed to the Heideggerian virus) start with a substantial competitive advantage over the PowerPoint crowd. But that’s no reason to slack off. Remember Plato: it’s all about dialogue!

With this simple three-point program (or was it four?) philosophers will soon reclaim their rightful place as the educators of management. Of course, I will be charging for implementation.

Matthew Stewart is the author, most recently, of The Courtier and the Heretic: Leibniz, Spinoza, and the Fate of God in the Modern World.