Is management a dream without managers?

By Sudam Chandima Kaluarachchi

Literature says ‘management’ is a scientific way of planning, organising, leading and controlling activities. In the business world, these functions are performed by people called managers in different categories and levels.

However, it does not mean that management is limited to the business world. Stoner, Freeman and Gilbert (2002) mention that though the managers are more obvious in some organisations than in others, effective management is the core factor for the success and the survival of an entity.

This creates a valid question whether specific people called managers are necessary for management to be effective. Are organisations with managers more successful than the organisations having no managers?

Moreover, it is a grey area whether the people who are capable of planning, organising, leading and controlling become managers or people called managers execute these functions of management in an organisation with or without having proper knowledge about management.

Not only that, another important thing comes into mind is if we add “self” in front of all above functions (self-planning, self-organising, self-leading and self-controlling) what type of situation would be seen in an organisation.

Nevertheless, there is no question that a perfect blend among all those functions of management is extremely important to deliver the output in ever more efficient, rational and controlled manner together with more caring and people centred approach. Supporting that, Frederick Taylor, father of scientific management, has suggested that productivity can be improved by applying management concepts scientifically.

The Conventional Approach suggests that the effectiveness of an organisation would be contingent upon the situation i.e. (1) manager himself, (2) his position/ tasks (3) the organisation, and finally (4) the environment (Willcocks, 1997).



Manager

Managers at different levels such as senior, middle and junior are, at last, responsible and accountable for the delivery of output as required by stakeholders. Managers are basically individuals achieve goals through other people (Robbins, 2005). In other words, a manager is responsible for directing efforts and resources aimed at achieving goals (Stoner, 2002).

As literature suggest, managers must have three types of skills to perform their duties efficiently and effectively, namely conceptual, human and technical skills. Conceptual skill is the manager’s cognitive ability to see the organisation as a whole. This involves manager’s thinking, information processing and planning abilities.

On the other hand, a manager has to work with various other people as an individual or as a team player. He has to motivate subordinates, facilitate functions, coordinate activities, lead people, communicate with stakeholders and resolve problems. This category is called human skills.

As mentioned above, the third category is performance related and generally called as technical skills. This includes mastery of the methods, techniques and equipments in the fields of engineering, finance and manufacturing etc (Daft, 2006). Obviously, every manager may not have these three categories of skill in the same gravity.

For instance, in practice, the operational level is expected to have excellent technical skills and their capabilities on other two skill categories may be minimal. Therefore, having the correct blend of skills and energy are prerequisites for a manager centred working environment and culture. If not, the purpose of having managers will not be served.

Further, a working environment with managers without required skills and having non managers with necessary managerial skills will lead to a cultural clash between these two parties and hence managers will not achieve the set goals through other people as mentioned by Robbins (2005) above. This situation will create an unpleasant working environment where work force is left unmotivated leading to a struggle for their autonomy resulting low productivity, high labour turnover and absenteeism.



Position/task

Managers are required to perform several duties such as interpersonal roles, informational roles and decisional roles (Mintzberg, 1973; cited in Robbins 2005). These roles are basically linked with leadership qualities, communication capabilities and effective decision making ability. The environmental support is vital for a manager to take care of the above roles.

When managers neither have an opportunity to perform nor clear about their authoritative position within the organisation (Redman et al., 1997; as cited in Preston and Loan-Clarke, 2000), such a situation supported by the negative perception of stakeholders towards the organisation, would lead managers to dissatisfaction. Dissatisfaction may create frustration among managers and ultimately, the situation leaves them unmotivated.

As Dawson (1986) mentioned motivation is an individual phenomenon and determines one’s behaviour: “It explains why individuals choose to expand a degree of effort towards achieving particular goals”. Unmotivated managers are not able to achieve their goals despite of power and authority lying in their positions hence desired results cannot be achieved from them. They hardly have the desire and use energy to perform the required functions.



Organisation

An organisation should have a sufficient pool of resources and an adequate workforce to handle its activities efficiently and effectively. Resources of an organisation are organised and coordinated through the Organisational Structure. Organisational Structure, which helps for proper coordination of resources, is the visual illustration of the company policies and code of conduct (Parker, 2007).

It is defined as the framework which guides “how tasks are divided, resources are deployed and departments are coordinated” (Daft, 2006). Work specialisation, departmentalisation, chain of command, span of control, centralisation or decentralisation and formalisation are the six key elements need to be addressed when designing the organisational structure (Robbins, 2005).

The classical perspective of management explains two main unhealthy features of management. Those are unlimited power lying with higher authorities and the low autonomy throughout the middle and junior layers of the structure.

Further, the bureaucratic organisation concept introduced by Max Weber (1864-1920), a German philosopher, discusses about the importance of division of labour, hierarchy of authority, code of conduct, separate management, written decisions and human resources based on technical qualifications (Daft, 2006). This proves that a proper organisational structure and a pool of resources are important for an organisation to perform well and be successful in the ever competitive environment.



Environment

The internal environment without humanistic perspective, as described by Mary Parker Follett and Chester Barnard, will not support managers to carry out their duties. Similarly, lack of opportunity on understanding the human behaviours, needs and attitudes in the workplace as well as fretful social interactions and group processes (Daft, 2006) can make the internal environment vulnerable and unpleasant. Similarly, turbulent external environment and manager’s inability to understand and anticipate the dynamics of external environment also do badly affect the performance of the managers.

The above suggest that having just people called managers does not mean anything. Either having a few managers or having a large number of managers also do not ensure or promise desired results. What is important is having a suitable pool of resources together with a structural and cultural support to a team of leaders, more categorically entrepreneurs for optimal utilisation towards achieving a common goal.

Having people with leadership and entrepreneurship qualities in an organisation at its all levels will definitely enhance the productivity and ensure the survival of an organisation in the dynamic and competitive environments. Therefore, now the question in front of us is whether managing an organisation without managers is possible, viable or feasible.



Management and managers

The ultimate objective of an organisation is to optimise its resources to achieve the desired goals. For that purpose, an organisation is structured in such a way that it is a system integrated with many interrelated sections. Each section is functioning separately in terms of planning, organising, leading and controlling.

Henry Fayol, a French industrialist, earlier identified five management functions such as planning, organising, commanding, coordinating and controlling in the early part of 21st century (Robbins, 2005). Subsequently, it was condensed to four functions and defined as a process. These four functions such as planning, organising, leading and controlling are linked with the work of members of organisation and the utilisation of organisational resources (Stoner et al. 2002).

In another view, management is described as an effective and efficient way of attaining organisational goals through planning, organising, leading and controlling organisational resources (Daft, 2006). According to Stoner et al. (2002), efficiency means “doing things right” and effectiveness is “doing the right thing”. Differently, Daft (2006) defines efficiency as the use of minimal resources to produce a desired volume of output and effectiveness as the degree to which the organisation achieves stated goals.

Though the four functions of management are a part of every manager’s routine, all four will not be given the same weight in practice at all levels of managers. For instance, in a tall organisational structure the top management reserves right to involve in strategic planning and junior levels are asked to implement what they have planned and actively control any deviations.

However, in a flat organisational structure, lower layers are given opportunity to involve in planning and in line with that the emphasis on controlling is limited. The ultimate effect of each of these functions is the summation of each such function in each section or unit which will lead to the synergy.  Simply, the entire management process emphasises three aspects i.e. (1) the expectations or targets, (2) the actual or the reality and (3) the control of the process. Daft (2006) defines controlling as “a management function concerned with monitoring activities of employees, keeping the organisation on track towards its goals and making correction as needed”.

According to Koontz and Weihrich (1998), controlling is “the measurement and correction of performance in order to make sure that enterprise objectives and plans devised to attend them are accomplished”.

They further say that managers in all levels are responsible and accountable for controlling. Robbins (2005) also provides the same meaning for controlling but in different words. For him controlling is a monitoring activity to ensure the outcome is the same as planned and to correct any significant deviation between the two. In other words, it is the “process of ensuring that actual activities conform to planned activities” (Stoner et al., 2002). The above suggests that though there are 4 functions of management, managers are mostly involved in the controlling side of management. Decisions on planning and organising are done at top layers and the leading also lies with them if they are true leaders or entrepreneurs.



Managing without managers

Many organisations in the world have proved that just having labelled managers or having a non-matching organisational structure and culture will not serve the purpose of having managers. Some organisations with a large number of managers face many problems in terms of the ultimate effectiveness of the services provided.

On the other hand, some organisations perform very well without having managers. Some researchers have found that good management in the health service industry improves medical care. The result of one such study is that there is a strong relationship between personnel practice and low level of mortality. This relationship, it says, is more significant than the number of doctors per 100 beds.

Therefore, it is an important task to establish that what matters the effectiveness of an organisation is the management and not the manager. We do not necessarily need people called managers to control an organisation.

Having workers with strong entrepreneurial and leadership qualities with the ability to carry out self-planning, self-organising and self-controlling in line with the organisation’s vision, mission and the culture, will definitely create an environment with zero or less importance of having managers to control.

It is prudent to look for new forms of work organisations with the redefined controlling terms and the role of the managers in terms of controlling. This can be a totally new firm or any restructuring to an existing firm in the form of privatisation, de-layering, downsizing, matrix management, mergers, alliances and contract based senior management positions rather than jobs for life (McGovern et al, 1998).

It is clear that all these exercises have removed middle managers drastically who are mainly involved in controlling function between the upper and the lower layers. This will lead to a smaller, more flexible and flatter organisation structure with emphasis on self controlling units with the employee empowerment and job enrichment in the organisation. In other words, it secures granting of autonomy to employee groups. Kanter (1986) also argues that new structures and cultures will help to exploit innovative ideas, products and methods of working.

The employees are to be treated as assets required for the growth and the development of the organisation. They are real assets if they have leadership qualities. Motivation rather than controlling them (Handy, 1989) is the need of the hour. Therefore, having competent leaders drastically reduces the need of having managers at all levels.

Semler (1989), has explained how his company Semco SA, Brazil was managed without managers. It is an interesting story and a case study. The employees are treated as responsible adults and allowed to vote on many important corporate decisions.

The company is built on three fundamental values called democracy, profit sharing and information which in turn, many organisations are lacking, and vital for productivity through employee motivation. The working conditions are controlled by workers themselves.

According to Semler, there are four major obstacles such as the size, hierarchy, lack of motivation and ignorance to effective participatory management.

All these obstacles are visible in many organisations in the world. Employees feel helpless when they work as large groups. Semler argues that employees “feel tiny, nameless and incapable of exerting influence on the way work is done or on the final profit made”.

Semco introduced flexible and flat organisational circles with reduced management levels instead of organisational pyramid which emphasises power and authority with designation, promotes insecurity, distort communications and shuffle interaction. They make small teams with counsellors, partners, coordinators and associates.

Teams find their own leaders based on the group dynamics. They value leadership and higher positions are evaluated by subordinates. Fault-finding regulations are replaced with the rule of common sense and own judgment based on responsibility for which employees are properly trained. Employees do not necessarily have job descriptions and they undergo well planned job rotation which prevents the boredom.

Ultimately, this setup led employees to move in the same direction and the organisation to having zero or less number of managers. Though it was decided to hold meetings to track problems, abuses and production interruptions, the company had not held its first meeting for years by the time Semler was writing his comments since there was no necessity to have such a meeting. The above work model based on purpose of the position rather than concentrating merely on status or assigned task of the position is further supported by the following examples.

Though the downsizing exercise is done due to various reasons, the main target employee group is middle level managers whose primary responsibility is controlling the activities. Stoner et al. (2002) says middle level managers have to make sure directing the activities that implement their organisation’s policies.

As indicated by McGovern et al. (1998), a few more examples can be presented for downsized managerial grades. Under the theme of changing from “employment to employability”, Hewlett-Packard introduced a voluntary severance package in 1993 to facilitate a flatter organisational structure. The number of managers reduced from 34 to eight within four years in the Sales Department itself.

BT Phayphones and Lloyds Bank also reduced especially managerial grades under the theme ‘Jobs for High Performers’. Lloyd Bank’s downsizing exercise was mainly to cope up with the changes in the external environment. Some other examples of organisations which were favouring the concept were Citibank Group, W.H. Smith News and National Hospital Services (NHS).



Conclusion

As indicated by Brown and Scase (1994) and Brown (1995); cited in McGovern P., Hope-Hailey V. and Stiles P. (1998) “the demise of the bureaucratic paradigm and the development of flatter adaptive organisations have significantly altered the nature of the organisational career”.

But, on the other hand, these flexible radical changes to traditional organisational structures are under criticism arguing that they are away from the reality. However, there are organisations in the world which very successfully follow these principles as described.

It is clear that what is important is implementation of the concept of management and not just having people called managers.

Possessing of human resources with leadership and entrepreneurial qualities, supported with the innovative organisational structure and culture, can drastically reduce the need of managers for the control function.

Capability for self planning, self organising, self leading and self controlling with the autonomy to do that will definitely create a place where managers are not necessary or less important.

It is clear that flat or organic organisational structures encourage entrepreneurship and support a work environment sans managers. Therefore, management without managers is not a myth but a reality.



(Sudam Chandima Kaluarachchi – MBA (Finance) (UK), BSc (Agri) Hons, MCIM (UK), MICM (UK), AIB (SL), MSLIM, MAAT (SL), Chartered Marketer – is Director, College of Banking & Finance, Institute of Bankers of Sri Lanka.)