Global Strategy - blog

An interesting dimension in management science is that the science part is largely in marginal role as a source of management ideas. In comparison, think about medical doctors who would use TV series as a source of knowledge, or engineers who would read science-fiction when designing a bridge? Does not sound good?

In business management all opinions are legitimate as long as they are seen as refreshing and innovative. Anyone can be a management guru, new management fashions emerge on regular basis, and respectable organizations built their visions on knowledge that has no empirical support. In quite many ways, the management of large organizations relies on faith as much as knowledge. As we have considerable amount of scientific knowledge on management and organizations, good questions is why that knowledge is only selectively used in daily managerial practice?

First, science and practice of management are two separate systems both functioning from distinct and separate logics. Science aims to generate general theoretical models that explain phenomena in organizations whereas practice of management focus on solving specific problems embedded in unique contexts. As a consequence, rigor can never be relevant – and is very rarely seen as such. Second, practice needs faith more than knowledge. That is, most of the 'scientific truths' in management field are rather discouraging in the face of setting things right in real organizations. On the contrary, the most popular management fashions (in the recent year's Blue Ocean strategy, dynamic capabilities, re-engineering etc.) cannot stand any empirical test yet they offer hope for modern organizations. The poor scientific quality does not matter in the use of these knowledge packages. In fact, the whole idea within popular management knowledge and management fashions is that the given answers are ambiguous, oversimplified, clearly articulated, and persuasive in their newness. Most of management fashions are rather harmless: more entertainment than serious business. However, things get more complex if public authorities take seriously the non-scientific entertainment or ideologically produced isms (remember that a large part of international business schools are religious by nature). Things get complex because even the silliest ideas widespread rapidly when sponsored by powerful civil servants and politicians. One of the recent influential mega-trends is entrepreneurship.

Most economists acknowledge that there is a fixed amount of entrepreneurship in all societies. The only thing that varies is how all the entrepreneurial activity is channeled. If institutional environment is functional, entrepreneurs may operate in business and industrial production thus generating economic wealth for the whole society. Likewise, poor institutional system motivates criminality and other wealth destroying activities. This is something we know. And we have Soviet Union and other communist economic systems that demonstrated how important it is to allow individuals to act as entrepreneurs. Yet when entrepreneurship is promoted to be an important part of education in schools, professional schools, and universities we have an ideological program – not something that would rely on scientific facts on the causal link between entrepreneurship and economic growth. What we have is a gigantic educational experiment. Generations are educated in entrepreneurship without any knowledge how that would affect societal development as whole. This is as dangerous as any other ideological program has been and an example what happens when political elites believe they have knowledge when they in reality have just believes.

I guess it would be naïve to expect (even public) management be based on scientific knowledge. Actually it is rather impossible as management scholars are generally more interested in explaining management than offering normative statements. What would be beneficial, however, would be to safeguard universities and schools from the ideological programs of political elites – would they be too anti-entrepreneurial as in the 1970s or too entrepreneurial as today. Strong academic autonomy, education based on scientific facts, and open minded development of educational goals are the ways healthy and prosperous societies are built.