MANAGERISM
The Managerism initiative promotes responsible and accountable business leadership: it is a private, independent, open and non-commercial project -- started and supported by a network of individuals. It offers an alternative German/Austrian perspective on management topics and the matrix business/economics/society.
Please note: The following are English translations of essays from our German website www.managerismus.com
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NEW CONTRIBUTIONS
Thinkpiece Number 31 Part II — Now online
Limited Liability (Part 2): The Total Economic Cost
If limited liability did not exist, would you invent it? It creates business uncertainty, corporate failure and loss of trust in managers; has no commercial or economic benefit; private gain but great public cost; it is unjust and inefficient; serving the interests of capital owners and managerists but not the common good. Some remedies are proposed. More
Lesson Number 55
Keeping the Siemens spirit alive!
Worldwide companies should not be citizens of nowhere. They must protect the unity and identity of the company, out of pure self-interest. This is a lasting mandate for executive managers and supervisory boards: to be not only a servant of capital markets, and their short-term interests, but to be a good steward of the company. More
Thinkpiece Number 31
Limited Liability (Part 1): Heads I Win, Tails You Lose
Limited liability in truth means — No liability. The limited liability corporation is a business model that harms others. Corporate managers are incentivized by bonuses to take unreasonable risks that can lead to bankruptcy. Risk and accountability have become detached. In nineteenth-century Britain, bankers and factory owners opposed limited liability. What is a limited liability law for? Who is it for? More
Lesson Number 49
Leadership Culture: An Analog Dilemma in a Digital Age
Digitization directly impacts business leaders by transforming how they manage employees. Managers must adapt, by choice or by force, to a new workshop culture and say goodbye to multiple layered, tightly controlled organizations. However, that does not mean trying to copy Silicon Valley. This essay explains what has to change and also describes some organizational innovations at major companies in Germany. More
Thinkpieces Number 20
The Decline of Moral Behavior — How Can Companies Prevent It?
Ethical behavior is having a hard time, especially within the harsh constraints of a globalizing and increasingly nominal economy. The risks of misconduct are much higher for (too) big companies and conglomerates. Reports of unethical business practice are on the rise. This essay describes the action that management must take. More
Lesson Number 50
Werner von Siemens (1816 – 1892): Insights of a Great Entrepreneur
The 50th Lesson of the Managerism series is dedicated to Werner von Siemens:
a great entrepreneur of the industrial revolution in Germany. This essay makes the case for studying some of the great entrepreneurs of the past: men like Robert Bosch, Reinhard Mohn and Berthold Leibinger, to name a few outstanding German business entrepreneurs. That is a good way to discover the true essence of business leadership and bypass the fashion trends of management teaching and consulting. More
Thinkpiece Number 21
The Proliferation of Parabusiness
Parasitic embrace and wealth extraction by consultants, investment bankers, auditors and other 'helpers'. Organic growth is sustainable and healthy, whereas tumor growth is parasitic. This can progress in different ways: by using processes and systems purposely made increasingly complex, by using constantly changing concepts, by willfuly destroying that of proven worth. One kind of tumor growth is parabusiness: what this includes, what business models are used, and how the entire parabusiness branch can be trimmed to a healthy size, are dealt with in this Thinkpiece. Further essays on the topic will follow. More
Lesson Number 48
Corporate Social Responsibility (CSR) a Poor Substitute for The Honorable Merchant
Years ago the British charity Christian Aid said that the novel CSR programs of many global corporations were a great sham, a big bluff. Management executives were letting themselves be fooled. Since then a huge CSR industry has grown up, to replace the ethos of the honorable businessman. In the meantime CSR consultants have profitably positioned CSR as the systemic ethical consulting for commercial businesses — and for non-profit organizations too. This essay describes the chronic malady this causes and what must be done to cure it. More
Lesson Number 27
Business Strategy ― What are the Learnings of J. Welch and M. Porter?
For a long time these men represented the non plus ultra of corporate leadership and business strategy. So what is left after the hype? Do their teachings still pass a reality check? This lesson gives the answer ― from a professional. Also, why management gurus are bad for your health. More
Lesson Number 46
RELECTURE 5: Karl Raimund Popper — "All Life Is Problem Solving"
Philosophical, Ethical and Practical Ideas for Management: Karl Popper was probably the most wide-ranging philosopher of the past century. Ever since his youth he addressed social and political questions. In his famous book The Open Society and Its Enemies (1945) and subsequent works he analysed the nature of democracy and its aberrations. Austrian-born Sir Karl Popper — unlike his German contemporaries — advocated simplicity and clarity. He made it his duty to speak and write as clearly as possible. The code of professional ethics that he formulated for responsibles in politics, society and administration, and thus indirectly also for managers, is of timeless validity. More
Executive Pay: Ackermann, Winterkorn and the Jealousy Factor
Günter Ogger on the capping of executive compensation: It was nice to hear that Bernd Osterloh wants to cap the pay of his bosses at VW. But is the Chairman of the Works Council really the right person for this? Members of the works council acting as moral apostles, in particular at VW, has been tried before — and it came to nothing. More
Lesson Number 42
General Electric (GE): Back to Basics
Until recently, GE was the star of progressive corporate leadership and was much admired, especially by the capital markets. Now things have fundamentally altered. So new conclusions must be drawn about corporate leadership, also in Europe, and especially by GE’s rival Siemens. More
Lesson Number 43
Big Company Disease
Corporate obesity is a real disease. It affects mega-companies who have grown too big and are no longer efficient or innovative. They choose a strategy of growth to reap the supposed benefits of scale and synergies. But without proper entrepreneurship, big is not better it is "badder". More
Lesson Number 39
RELECTURE 4: Joseph A. Schumpeter – Preceptor of Change
Schumpeter is renowned as the economist who invented the expression "creative destruction". Schumpeter ranks, together with Keynes, as the outstanding economist of the 20th century. But what do we really know about this multi-faceted economist: of his disjointed life or comprehensive analyses of entrepreneurship and the dynamics of the market economy? More
Lesson Number 25
RELECTURE 1: Konrad Lorenz and The Eight Deadly Sins of Civilized Society
Forty years after the publication of his best seller we recall the insights on human development of this legendary scientist. The 'Father of the Grey Geese' was not only a universal scientist of animal behavior, he was also a keen observer of humanity and societies. Here we reconsider Konrad Lorenz's perspectives, especially on economics and politics. More
Thinkpiece Number 9
McKinsey – the Insider Company
Abuse of trust is always shameful, wherever and whenever it happens. But there are different degrees of abuse. It is especially scandalous when leaders of organizations are involved: trust abused by those claiming to be custodians for their clients. Take a look at this hidden, unbelievable story. More
Thinkpiece Number 10
Directors' Pay – Something Has To Change
Directors' pay is in the headlines. It should remain a matter of social and political concern until things change. Why? What needs changing? Local and contemporary issues are important ― but this perspective covers more. More
Lesson Number 33
The Powerful Management System of the Biggest "Hidden Champion" in the World
The term "hidden champion" is a title of distinction. There are many hidden champions in Germany, more than any other country — many are small or mid-sized enterprises (Mittelstand) often located well away from major cities. Another hidden champion, a really huge one, Koch Industries, is headquartered on the Great Plains in Kansas, USA. Charles G. Koch, son of the founder, and present CEO, developed a theory of human action based on ideas from the Austrian School of Economics: Ludwig von Mises, Friedrich A. von Hayek and Joseph Schumpeter. This Lesson offers a unique insight into Koch's thinking and beyond. More
Abbreviated version of Thinkpiece No. 13
Innovation Weakness: An Existential Challenge Especially for Large Companies
Lesson Number 30
RELECTURE 2: Viktor Frankl ― A Great Human Being and Questioner of Meaning and Responsibility
What kind of a man was it who, after surviving the horrors of Nazi death camps, was able to advocate conciliation? What teachings of this great psychotherapist are still relevant for our day and age which he predicted so well? What lessons can we learn from Frankl about leading our lives and companies? More
Abbreviated version of Thinkpiece No. 11
Value Extraction or Value Creation
Two opposing economic practices: Contrasting a value extracting economy with a value creating one illustrates the difference between a distorted market economy and a more desirable, responsible market economy. More
Thinkpiece Number 8
The Industrial Decline of the USA – Lessons for Europe
Can America re-industrialize? It is doubtful whether it can, even if, for the first time in decades, industrial jobs were a topic in a presidential election campaign. This overview by Manfred Hoefle explains the remarkable decline of the US production sector, and why it is difficult to reverse the trend. What lessons can Europe learn from the US experience? More
GE learns the German way – a belated insight
The Wall Street Journal (March 7, 2012) came up with the headline New GE Way: Go Deep, Not Wide. After several decades, General Electric (GE) has ended the practice of job rotation — or job hopping every two years — for future top executives or 'high potentials'. This also marks the end of GE's omnipresent short-term thinking, at least in this respect. More