Consider the school’s approach to the concept of “social enterprise”: It misses the point entirely by treating it as a distinct field of study. That’s absurd. Every business is a social enterprise—there has never been a socially neutral business in the history of the world. And every single business “makes a difference”—the only question is whether they’re making a positive or a negative one. — 39: 573-576
Business has lost sight of its true function in society, which is to provide a mechanism by which we can work together and with our environment to achieve our common goals. It is not, and never has been, to simply make a profit. — 46: 678-680
In his opus Scale and Scope: The Dynamics of Industrial Capitalism, Chandler documents the three-part evolution of large firms into multinational giants that was taking place as Harvard argued with itself over whether true change was truly afoot. Part one: an investment in production facilities large enough to exploit a new technology’s potential economies of scale or scope. Part two: an investment in a national and international marketing and distribution network so that sales could keep pace with production. Part three: an investment in management. That’s where HBS came in. Companies suddenly needed managers not just to run the production and distribution mechanisms, but also to monitor and coordinate the two, planning and allocating resources for future production. The larger the firm, the more operating units, and the more managerial oversight required. — 51: 755-761
As it had done with the founding of its schools of law and medicine, the School made the argument that classroom teaching was superior to apprenticeship, and that “commercial practices, and the philosophies that underpinned them, [could be] elevated to the same sort of level as other academic disciplines.”25 Just what those practices and philosophies were was a question as yet unanswered, but the feeling was that they could be, and that elevation would follow. This was Harvard, after all. Everything about the place was elevated. — 58: 863-867
Along with other trailblazers, HBS dragged business training out of the vocational realm and into the professional one—and in doing so, helped cement the foundation of managerial authority in America and beyond. — 59: 871-872
But even Harvard is vulnerable to the wish’s predilection to be father to the thought, and it saw professionalism where it did not yet exist, confident that it could fill in the blanks. — 63: 925-927
At Harvard Law School, Christopher Columbus Langdell put the modern spin on the approach, pioneering the now-ubiquitous notion that the best way to learn American law was to study actual judicial opinions rather than the more abstract content of legal rules themselves. — 67: 992-994
Today’s even more pernicious version of such: shareholder value. Writes Stewart: “The modern-day CEOs who sacrifice the long-term viability of their corporations for the sake of short-term boosts in their quarterly earnings reports are direct descendants of the pig-iron managers who undermined their work team’s morale in order to achieve temporary productivity targets.” — 78: 1152-1154
It also led to the self-serving conclusion that the only people capable of solving management problems are management itself. — 83: 1228-1229
Taylor’s most important contributions to management, though, weren’t about how much pig iron a man can carry in a day. Rather, his techniques of managerial accounting helped shift the discipline away from a backward-looking summary of accounts to a forward-looking tool of managerial control, and served as the foundation of modern management information systems. Via Taylor, accounting became accountability. The legacy of these insights, which include capital budgets, financial controls, planning, and scheduling, far outweighs that of his stopwatch studies. — 83: 1230-1233
His insistence that knowledge was power reinforced Americans’ notion of their meritocracy, even if the dictates of Taylorism actually required industrial aristocracy. In doing so, it promised, somewhere, somehow, to get to the heart of the riddle of how to have a Jeffersonian democracy and a Hamiltonian economy at once. It never did. — 84: 1239-1242
The professional manager was the human manifestation of a seismic shift in the nexus of power in modern business, during which ownership became separated from control. — 106: 1577-1578
Donham knew that the whole “science of business” was a feint, and that the real point was rhetoric, the purpose of a business school to produce people who could walk the walk and talk the talk of management in an exploding economic situation. The essence of rhetoric is to mess with people’s heads—that’s why we’ve been interested in it for three thousand years, and it’s also why it was such a natural fit with business. (Of course, the majority of modern business school professors are nowhere near reflexive enough to realize that they work for schools of rhetoric.) When it adopted the Socratic method as its primary form of teaching, one can only hope that HBS was aware of—and perhaps even extra-sensitive to—Socrates’s warning that unless it is accompanied by a guiding moral philosophy, rhetoric is mere flattery used to persuade for personal gain. Or maybe they weren’t. In any case, the rhetoric has been there from the very start. The moral philosophy? Not so much. Management historian J.-C. — 112: 1654-1662
My friends, the truth is that business is not a profession; and no amount of rhetoric and no expenditure in circulars can make it into a profession. This fact stands like a sharp-pointed, deep-seated rock in mid-channel, and against this rock Harvard is steering her craft—or raft. . . . I can imagine a man practicing medicine or law or architecture or engineering out of sheer love for the thing. But I cannot imagine a man’s running a business at a loss. It wouldn’t be business. A School of Business means a school where you learn to make money. — 118: 1751-1755
By insisting that group performance was more a function of social cohesion than of monetary incentive, Mayo was implicitly arguing in favor of substituting the spiritual rewards of work for higher pay. — 128: 1905-1906
John Van Maanen, a professor of management at the MIT Sloan School of Management, explains: “What could be more attractive to owners and managers than to be repeatedly told that one’s employees . . . are really irrational and illogical . . . that their lack of cooperation is but a frustrated urge to cooperate; that their economic wants mask a need to be consulted and listened to in the workplace; that these needs are best met by a more or less therapeutic regime that plays close attention to the social and emotional needs of employees; and that you—as owner or manager—are charged with a historical mandate (or destiny) to bring social harmony to the workplace?” — 128: 1908-1913
There were dissenting opinions, of course. In The Higher Learning in America, Thorstein Veblen ventured the opinion that the speed of one’s climb was irrelevant, because the learning curve was actually a road to nowhere: “No gain comes to the community at large from increasing the business proficiency of any number of its young men. There are already much too many of these businessmen, much too astute and proficient in their calling, for the common good. A higher average business efficiency simply raises activity and avidity in business to a higher average pitch of skill and fervor, with very little other material result than a redistribution of ownership; since business is occupied with the competitive acquisition of wealth, not with its production.”4 — 147: 2182-2188
Why punish them, the logic went, if the real source of the problem was in the nation’s soul? That line of thinking—a recurring one out of HBS—is both tiresome and obtuse, as if a nation cannot pursue both things at once, to punish malefactors and to question its priorities. It need not choose between the two. — 156: 2326-2328
The next year, on the urging of Donham, Cabot, Henderson, and Mayo, he published the material from the talks in The Functions of the Executive, still widely regarded as one of the most influential management books of the twentieth century. — 166: 2462-2463
In one sense, Chester Barnard was Vilfredo Pareto dressed in a Brooks Brothers suit. Like Pareto, Barnard saw organizations as “systems” analogous to the human bodies seeking equilibrium. To get there, an organization needed both effectiveness (the ability to meet goals) and efficiency (the ability to satisfy the individuals who worked for it). And the task fell to management—the corporate incarnation of Pareto’s elite—to formulate those goals and decide how to meet them.4 — 167: 2484-2488
Barnard’s theories also echoed Mayo in their rejection of the idea of workplace democracy in favor of psychological manipulation. And, it should be noted, in their rejection of reality for fantasy: Considered both a “chilly” and “aristocratic” leader by those who had worked for him, Barnard instead saw himself as the object of their admiration. He even saw sound managerial technique where others might see outright discrimination: “Personal aversions based upon racial, national, color, and class differences often seem distinctly pernicious; but on the whole they are, in the immediate sense, I believe, based upon a sound feeling of organization necessities.” — 168: 2496-2500
To Barnard, an order given by a manager was not an exercise of power, but simply the manager’s acceptance of responsibility for an action that the employee had the power to initiate but not the courage to take. (Read that again. It’s quite the remarkable feat of sociolinguistic gymnastics.) And here’s the crux: That lack of courage was a moral weakness, even moral cowardice, and the situation salvaged only by the manager’s display of moral strength in accepting the responsibility for telling his underling what to do. Fashionable managers took note: Power was out; empowerment was in. — 168: 2506-2510
implementing long-term policies. In Chester Barnard, the folks at HBS found the exact thing they’d been looking for: a real-life executive who validated their ideas about enlightened management. But in the wrong hands—which included, it would seem, his own—all Barnard’s particular approach to human relations did was replace autocracy with paternalism. And in doing so, he helped lay the foundations of an insidious cult of moral leadership that we are still grappling with today. By making the case that success is a result of moral purity—and that corporate leadership is intrinsically moral—he left us not just with the dangers of false pride but with something worse, which James Hoopes refers to as the paradox of moral leadership. “Only those who recognize that they may be or become morally unfit to lead are morally worthy to do so,” writes Hoopes in Hail to the CEO: The Failure of George W. Bush and the Cult of Moral Leadership. “People confident of their purity are morally unqualified to lead.” HBS only compounds the issue by insisting to new students that they are already America’s future leaders simply by virtue of having enrolled. — 169: 2514-2523
Taking a page from the “Private Entity with Public Pretensions” playbook used so effectively by HBS throughout the years, Senator Flanders told Doriot about how he responded to questions about the entity’s small staff—by suggesting that ARD was not, in fact a private company, but a social movement: — 182: 2702-2704
hearing it elsewhere as well. Consulting giant McKinsey — 202: 3003-3004