UK: Turbulent times for British management. (1 of 2)

UK: Turbulent times for British management. (1 of 2) - In these difficult times for management, Peter Benton, director general of the British Institute of Management, urges the need for Britain to develop men and women of broad human sympathies to match

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Last Updated: 31 Aug 2010

In these difficult times for management, Peter Benton, director general of the British Institute of Management, urges the need for Britain to develop men and women of broad human sympathies to match their advanced professional and technical skills.

In April 1990 Robert Horton, the new chairman of British Petroleum, announced his flat organisation - from 11 layers of management to five in one swoop - to cope with the management of surprise. A whole swathe of middle management disappeared at a stroke. Clearly a new age is dawning in the science of management.

As every student of organisations knows, it was not always thus. Until quite recently most people in industry and commerce worked in the traditional pyramidal hierarchy, carrying out specified functions in defined relationships with colleagues. Sometimes, as in British Telecom's huge predecessor 10 years ago, those relationships were laid down and the tasks specified in immense detail. A few people at the centre negotiated with the heads of other hierarchies, and set out highly numerate plans to guide their organisations. It was not given to many to understand the whole of a corporate strategy: "Leave that to us; we will let you know all that you need to know" was the typical message from the top. "Trust your leaders and do your duty." W H Whyte and J K Galbraith described the scene quite memorably over 30 years ago in "Organisation Man" and "The Affluent Society".

That rigid, arthritic approach to management may look strange to us now, but responded to conditions in the age of order. After the turmoil and threats of World War II, organised markets seemed no bad thing to many people. Firm steps to protect home industries and to build a stable framework for economic growth were widely agreed to be desirable. At Bretton Woods the nations agreed a structure for relative currency exchange rates and set up bodies to oversee economic development. All over Europe cartels defined the structure of industries, the nature of products, and their prices - full agreement among competitors.

Not only were those environments predictable, but predictions could be made to come true - because all the players within the magic circle could agree what should happen. Occasionally a huge external force like the 1973 increase in oil price could rudely knock over those cosy agreements, but generally they held. And so organisations and management styles developed in a rather special way. The hierarchy was necessary to prevent uncomfortable individual initiatives, and could survive because agility and responsiveness to the customer were of quite minor importance.

Not so today. Developments in technology have permitted tremendous changes in the power to compete, and barriers to trade are tumbling everywhere. When the best competitor anywhere in the world can reach out and seize your customers without warning, arthritic reliance on a cartel of comfortable conspirators brings no protection at all. Some might feel that it is really quite unnecessary to expose a nation to such turmoil; but I suggest that such free flow of competition is inextricably linked to fruitful use of information technology itself. Information knows no boundaries; there is nowhere to hide.

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