From the Mouths of Babes
I was shocked recently when my wife, Heidi (the 'babe' in this example :-), suggested that I was 'anti-business'. Nothing could be further from the truth.
Anti-management I would understand. Often people don't quite appreciate that I'm making a distinction between good and bad management. I'm only against bad management – or management for management's sake. I'm against command-based coordination and for market-based coordination.
Heidi's anti-business remark was a flippant comment – she actually knows me better than that. But what it does show is that to some people – even exceptionally clever and attractive ones – management and business are the same thing.
Management and business are bundled together into the same thing in the minds of the masses because, to many employees, they represent the unknown. Also, management tends to justify just about any decision on the basis that it's 'good business'. This is, of course, regardless of the quality of the decision, its real motivation, and its effect on the business.
The reality is that managerialism and business are almost opposites. Management as a profession refers specifically to the practice of using people who are not the business owners to run a business. This might get muddled when people start talking about ownership of options and shares for senior executives. But these are incentive mechanisms and don't alter the basic nature of managerialism.
To be anti-business I would have to be anti-entrepreneurship and anti-capitalism. If that was the case I wouldn't keep referring my readers to Mises.org and Ayn Rand novels.
Business is about trading, contracts, exposing your services to a market, and trusting that market to determine the value of your goods and services. In business, if an activity has no value you will continue doing it at your peril.
Compare that to the command-based co-ordination reflected in managerialism. Task allocation is performed without a real trade, management activities are not exposed to the market, and any activity that can be designated a management activity no longer needs to justify its existance by showing that it delivers value to anybody.
In truth, after years of muddle-headed thinking and false assumptions, management consists of quite a few activities that you would not purchase from a business if they were offering them as a service.
So, let's not confuse business with management.
Anti-management I would understand. Often people don't quite appreciate that I'm making a distinction between good and bad management. I'm only against bad management – or management for management's sake. I'm against command-based coordination and for market-based coordination.
Heidi's anti-business remark was a flippant comment – she actually knows me better than that. But what it does show is that to some people – even exceptionally clever and attractive ones – management and business are the same thing.
Management and business are bundled together into the same thing in the minds of the masses because, to many employees, they represent the unknown. Also, management tends to justify just about any decision on the basis that it's 'good business'. This is, of course, regardless of the quality of the decision, its real motivation, and its effect on the business.
The reality is that managerialism and business are almost opposites. Management as a profession refers specifically to the practice of using people who are not the business owners to run a business. This might get muddled when people start talking about ownership of options and shares for senior executives. But these are incentive mechanisms and don't alter the basic nature of managerialism.
To be anti-business I would have to be anti-entrepreneurship and anti-capitalism. If that was the case I wouldn't keep referring my readers to Mises.org and Ayn Rand novels.
Business is about trading, contracts, exposing your services to a market, and trusting that market to determine the value of your goods and services. In business, if an activity has no value you will continue doing it at your peril.
Compare that to the command-based co-ordination reflected in managerialism. Task allocation is performed without a real trade, management activities are not exposed to the market, and any activity that can be designated a management activity no longer needs to justify its existance by showing that it delivers value to anybody.
In truth, after years of muddle-headed thinking and false assumptions, management consists of quite a few activities that you would not purchase from a business if they were offering them as a service.
So, let's not confuse business with management.
posted by Matthew at
7:02 am
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