False Prophets: The Gurus Who Created Modern Management and Why Their Ideas are Bad for Business Today [Paperback]

Hoopes' book presents a gallery of management thinkers and introduce their work through the lenses of a political science perspective. Political scientists who use the concept of power to describe economic or social mechanisms are sometimes prone to its abuse: they see politics everywhere, and they consider all references to general ideals or moral sentiments as stratagems used by rulers to obfuscate the brutal exercise of top-down authority.

Power is indeed a key concept for political scientists, as interest is for economists, and both concepts may help them to build theories or propose models of corporate behavior. But management scholars are practically oriented, and they know that power or interests can sometimes be bad for practice. That is why politics is a bad name in a private business setting, and motivation takes many forms other than paycheck retribution.

According to Hoopes, the simple existence of top-down management power contradicts the democratic political values at the heart of American culture. "Ordinary citizen get their closest exposure to undemocratic government when they go to work for a corporation." The book argues that remembering that contradiction, rather than covering it up, as many management theorists have done, is the best way to manage well. "Top-down power and its potential abuse are here to stay in corporate America. It is foolish to think otherwise." So it is better to admit that we live two lives, one as free citizen and one as submissive employees, and that instead of extending corporate values in our democratic institutions we should build checks and balances in our political system to limit the abuse of management power. Unfortunately this is not the direction that management gurus have taken.

Hoopes begins his tour of portraits with Frederick W. Taylor, the founder of scientific management. Taylor is now considered mostly an embarrassment in the history of management, and he serves as a negative milestone against which later approaches were constructed. But his emphasis on efficiency, low costs, and pay to performance still makes sense today. Better, Taylor can be portrayed as a pioneer of knowledge management, as he saw knowledge as a key resource that had to be properly managed by teams of experts. His success owes much to the state of management education at his time: "new business schools such as Harvard had embarrassingly little systematic knowledge to teach and desperately embraced Taylorism to fill class time (....) Students attention could be concentrated on instruction cards, slide rules, and time study, lending business schools a facade of science and academic rigor."

The other scholar who took Harvard Business School by storm is Elton Mayo, whose human relations movement imposed a new curriculum in management education. The Australian social psychologist is cast as the villain in Hooper's story: he is depicted as lying about his curriculum, and as substituting intellectual aloofness for academic rigor. His dream was to replace democracy with therapy: he treated Bolshevism as a mental illness, and labor grievances as symptoms of deeply-held neuroses. HBS, where his recruitment owed more to his ability to attract money from the Rockefeller foundation than to his scientific credentials, gave him the institutional power to develop and sell his ideas, which reinforced the managerial profession's claim for social status based on its dedication to human service. Although he only supervised the study from afar, he is mostly remembered for the Hawthorne experiment at General Electric, which demonstrated that gentle and caring supervision created better group dynamics. But he is still considered as the founder of Organizational Behavior, a discipline that has become a part of every business school curriculum.

By contrast, Mary Parker Follett gets many praises as a shining personality and a brilliant social theorist. Trained as a political scientist, she contributed original insights to social theory and business management by trying to integrate the opposite interests of bosses and workers. Using her social work experience as a new model of political democracy, Follett eventually came to believe that a corporation at its best is a person. According to her, "the group, because it means a larger life than our single, separate lives, thrills us and raises us to new levels of efficiency and power." She believed that all employees should contribute to management, and she may have erred in her confidence in leadership as a substitute for power, yet her thoughts reflected the better aspects of corporate life.

Finally, Peter Drucker, whose portrait closes the volume, is the only management expert who deserves the title of guru, used generously throughout the book. His mix of social theory and practical business advice attracted a cult following, not only in the United States but also in Japan and in Europe. Fleeing central Europe's descent into chaos in the 1930s, Drucker began his career as a journalist and did some fieldwork at General Motors before moving to academia, where he became the quintessential business guru. In the 1960s, he first called attention to the growing role of knowledge workers; in the 1970s, he pioneered management by objectives and called attention to Japanese companies' distinctive practices; in the 1980s, his increasing disenchantment with corporate America led him to turn his focus to nonprofit organizations, which were in bad need of rigorous management techniques. Drucker also played a role of the ubiquitous social critic for business managers who usually have little time for sociological treatises and philosophical thought.

My impression upon reading this book is mixed. The introductory chapter presents a strong thesis, namely that management gurus obfuscate the anti-democratic nature of corporate power, but this basic insight covers only a limited aspect of the management doctrines that are reviewed in the subsequent chapters. It is not obvious that the author has actually read all the material that he covers--not that the management books of these mostly forgotten authors are worth re-reading anyway. If you need a critical introduction to the thoughts and doctrines of management gurus, I find The Witch Doctors by John Micklethwait and Adrian Wooldridge a much more pleasant and informative read.

Despite its title, this book doesn't say much, or much of substance, about business today. Instead, it concentrates on lively professional and personal profiles of eight twentieth century management theorists of varying impact. Hammer and Champy, who launched the 1990s re-engineering movement, are mentioned only in the conclusion, and the gurus behind managing for shareholder value aren't mentioned. A little less detail about peccadilloes of the long dead and a little more about crucial management ideas that have shaped contemporary business might have made the book more relevant. Interestingly, it indicates that slave owners anticipated some of the progressive ideas in modern management but the author leaves it to the readers to make the connection: voila, contemporary workers believe the cant of empowerment about as much as the slaves believed the plantation master's pieties. We recommend this book for its anecdotal, gossipy entertainment value. It will make you cautious about management consultants - but if you aren't already, you can't have spent much time in business.

Edmund Burke wrote that 'coarse distinctions' are the foe of good judgement. James Hoopes' writing here is no enemy of good judgement. He makes clear ethical distinctions about the moral content of rule by managers and political rule by the people. In the early days of management writing in the slave south - one of the historical highlights of this book - such distinctions would have been commonplace. But in our day, with the spirit of Humpty Dumpty governing the use of language in business, academia and politics, Mr Hoopes' assertion that management is un-American is bold iconoclasm.

But Mr Hoopes is no Seattle street fighter. Showing the moral difference between free government and management is only one part of his project. He knows that not everything democratic is good; and not everything good is democratic. Mr Hoopes praises management for its many achievements in the sphere of business organisation and defends it against those 'false prophets' who attempted to give it democratic legitimacy. Management is legitimate because in its rightful place, the business world, management achieves what businesses need and what society needs business to provide: profit, productivity, workplace order, efficiency, speed and flexibility.

Outside of that sphere, however, management is bad. Applying 'industrial best practice' to free government is to fetter the people. So, Mr Hoopes argues, let us weigh the worth of management and free government on different moral scales and never get them confused. Though he never makes the analogy himself, Mr Hoopes is arguing for a similar distinction we already make with judicial courts and military structures. Neither of those are democratic either, though both are useful and good and enable the larger democratic project to continue. Therefore, we explicitly confine their undemocratic powers to discrete areas and maintain those boundaries forcefully. And the members of the judiciary and military support them too. It is not legal prohibitions that ultimately prevent generals from taking over government: it is because they have internalised the doctrine of civilian control of the military. Businessmen and gurus and all of us must do the same for business, Mr Hoopes seems to say. If business cannot itself be run democratically and government regulation is too prone to failure, such an attitude is probably the only sustainable way we can defend free government from 'industrial best practice'.

My one wish is that Mr Hoopes made a longer, more detailed argument about 'how top-down power increased American productivity' (the title of part 1). He shows the clear improvements Taylor ('the demon') and Gantt made in their time. But he doesn't reflect on how they are still applicable now in the age of the long-tail and internet; nor how they have been applied to, say, agriculture or the service sector in our day (Fast Food Nation by Eric Schlosser is good here, but of course doesn't have the same focus as False Prophets). Nor on how management can be the enemy of speed and flexibility and innovation.

But beyond that, this is an excellent book, highlighting some important and still influential thinkers of last century; giving us short bursts of business history; and revives a clear moral language with which to discuss the intersection of business and government.