Management and Economic Development
It can be said that there are no “underdeveloped countries.” There are only “under managed” ones.
Management creates economic and social development. Economic and social development is the result of management. It can be said, without too much oversimplification, that there are no “under developed countries.” There are only “under managed” ones. Japan a hundred and forty years ago was an underdeveloped country by every material measurement. But it very quickly produced management of great competence, indeed, of excellence.
This means that management is the prime mover and that development is a consequence. All our experience in economic development proves this. Wherever we have only capital, we have not achieved development. In the few cases where we have been able to generate management energies, we have generated rapid development rapid development. Development, in other words, is a matter of human energies rather than of economic wealth. And the generation and direction of human energies is the ask of management.
Failure of Central Planning
Any society in the era of the new technology would perish miserably were it to run the economy by central planning.
The new technology will greatly extend the management area; many people now considered rank-and-file will have to become capable of doing management work. And on all levels the demands on the manager’s responsibility and competence, her vision, her capacity to choose between alternate risks, her economic knowledge and skill, her ability to manage managers and to manage worker and work, her competence in making decisions, will be greatly increased.
The new technology will demand the utmost in decentralization. Any society in the era of the technology would perish miserably were it to attempt to get rid of free management of autonomous enterprise so as to run the economy by central planning. And so would any enterprise that attempted to centralize responsibility and decision making at the top. It would go under like the great reptiles of the saurian age who attempted to control a huge body by a small, centralized nervous system that could not adapt to rapid change in the environment.
Need for a Harmony of Interests
The demand of harmony does not mean that society should abandon its right to limit the exercise of economic power on the part of the corporation.
Economic purpose does not mean that the corporation should be free from social obligations. On the contrary it should be so organized as to fulfill, automatically, its social obligations in the very act of seeking its own self-interest. An individual society based on the corporation can function only if the corporation contributes to social stability and to the achievement of social aims independent of the goodwill or the social consciousness of individual corporation managements.
At the same time, the demand for harmony does not mean that society should abandon its needs and aims and its right to limit the exercise of economic power on the part of the corporation. On the contrary, it is a vital function of ruler ship to set the frame within which institutions and individuals act. But, society must be organized so that there is no temptation to enact, in the name of social stability or social beliefs, measures that are inimical to the survival and stability of its representative institutions.
Social Purpose for Society
The absence of a basic social purpose for industrial society constitutes the core of our problem.
We already have given up the belief that economic progress is always and by necessity the highest goal. And once we have given up economic achievement as the highest value and have come to regard it as no more than one goal among many, we have, in effect, given up economic as the socially constructive sphere life. The abandonment of the economic as the socially constructive sphere has gone further. Western society has given up the belief that man is fundamentally Economic Man, that his motives are economic motives, and that his fulfillment lies in economic success and economic rewards.
We have to develop a free and functioning society on the basis of a new concept of man’s nature and the of the purpose and fulfillment of society. A basic ethical concept of social life must be developed. It lies in the philosophical or metaphysical field.