When managers are more effective than markets

During the Intro to Management lecture on October 15 we discussed the need (or not) for the professionalization of management (Khurana & Nohria, 2008) and the reason why firms exist. With the recent scandals attributed to managers and their alma maters, these are useful questions to ask. In contrast to "professionalized" occupational roles like doctors and lawyers, however, managers must deal with planning, organizing, leading, and controlling (the four basic functions of management) - planning for an uncertain future, creating effective and efficient structures for organized activity, motivating and directing people, and trying to keep everything on track. It is the manager's skills that allow organizations (aka "hierarchies") to be superior in many cases to markets and contracts (the domain of lawyers). In recognition of these important differences and the importance of organizations in economics, Oliver Williamson is one of two economists who won the Nobel prize for economics this year. Professor Williamson's work explains conditions under which firms or markets would be the superior form of organization. For us, the challenge is to create managers who can master planning, organizing, leading, and controlling the functions of the firm. Professor Williamson knows we could never codify that! (Clicking on the image takes you to the October 17 story in The Economist)

Khurana, R., & Nohria, N. 2008. It's time to make management a true profession. Harvard Business Review, 86(10): 70-77

Motivation in the 21st (?) Century

Management scholars have been studying motivation in the workplace for decades. Many of you will recognize the familiar pyramid pictured here as "Maslow's Hierarchy of Needs," which Maslow formally presented in 1943. To motivate workers, managers have established all manners of external incentives, such as bonuses, stock options, commissions, and other rewards, in the name of improving productivity. What scientists have consistently found, however, is that these external incentives actually hurt performance. In a stimulating presentation from TED Talks, Daniel Pink cites numerous studies that support this and argues that our motivational approach should be based on autonomy, mastery, and purpose rather than on carrots and sticks. The audience - and surely Maslow - agree. The difficult question for managers is how best to implement "what science knows" into "what managers do."

What entrepreneur do you admire?

In our ice-breaker introductory session of Entrepreneurial Strategies, students identified entrepreneurs whom they admire. The list included Warren Buffett, Richard Branson, WWE founder Vince McMann (!), Bill Gates, Henry Ford, and Facebook founder Mark Zuckerberg. Interestingly, several students admired Chris Gardner (the protagonist of The Pursuit of Happyness) as a model entrepreneur. Entrepreneurs are quite distinct from managers in the personal practices and mindset they assume: entrepreneurs set the work climate, engage in opportunity-seeking behaviors, and constantly strive for new insights to move their ventures forward (McGrath & MacMillan, 2000). That "venture" can be your team's project, your start-up company, or even your career (Mr. Gardner is the gentleman on the left).

Opening day (or Getting to know you, Parte due)

CIMBA students met in classrooms for the first time on Martedi after arriving in Paderno del Grappa by way of long flights from the states. The University of Kansas, U Conn, University of Oregon, and University of Iowa are particularly well represented in this cohort of motivated undergrads. Other schools with student participants include West Virginia, Iowa State, and Texas Tech Universities and the Universities of Arkansas, Nebraska, Delaware, and Tennessee. During introductions in the management course, I asked students to name a manager they admired and why they admired him/her. The overwhelming theme that arose was that students named managers for whom they had once worked, citing personal care and attention, thoughtfulness, outgoing personalities, and a focus on getting things done while having fun. The idea of what a good manager does is embodied in the type of person and the quality of the relationship with that person. There was plenty of anecdotal evidence of the value of "soft skills" in the management field.

Getting to know you!

I've had the pleasure of meeting most of the new faculty members for the fall 2009 semester and am getting oriented to the Paderno del Grappa campus on the beautiful grounds of the Istituto Fillipin (pictured above). This semester I'm teaching introduction to management and entrepreneurial strategies. Both courses will adopt a strong orientation toward problem-solving (especially Intro to Management, with its incorporation of the Kepner-Tregoe methods of decision-making and problem-solving), and both will be heavily grounded in international contexts.

Pet products not inspired by Pets.com!

Did you know that your dog or cat's skin could suffer from overexposure to sunlight? That is apparently what Bayer Pet Care wants you to think. In a country where the tan makes the man in the suit look even sharper, you can buy sunscreen for your cane or gatto. Luckily, mi gatti tan indoors. This picture was taken from a storefront in the "gheto novo" section of Venice in June, 2009 - the same piazza where you can buy this chess set.

Ferie Agosto

Most Italians take the entire month of August as holiday and leisure time. The Feriae Augusti dates back to at least 18 BC as a series of festivals and celebrations declared by the Roman emperor Augustus. Many businesses are closed during feire. Here in the Veneto dozens of manufacturers are able to accommodate this downtime through cooperation and by somehow avoiding bad agency behaviors. It's an interesting thought experiment to imagine how US firms would behave under similar cultural expectations...