Posts Tagged ‘Business Schools’

Thinking Aloud Next Week on the Failure of the Business Schools

May 23, 2018

There’s also a very interesting and provocative edition of the Radio 4 programme, Thinking Aloud, next Wednesday at 4.00 pm. Entitled ‘Shut Down the Business School!’ the blurb for it on p. 127 of the Radio Times says

Laurie Taylor talks to Martin Parker, professor at the Department of Management, Bristol University, who argues that business schools have produced a generation of unreflective managers, primarily interested in their own personal rewards. He makes the case for a radical alternative.

This could be very interesting indeed, as the massive pay rises and additional bonus packages awarded by managers for performance, which is either mediocre or utterly disastrous, shows he has a point. Way back in the 1990s Private Eye had a series in which they charted the performance of various companies after they were taken over by various chairmen, who were rewarded with massive salaries. The companies were all top-performing, or at least, they were at the time these much-vaunted managers were given their jobs. The charts were of these companies’ share values, and they showed the companies’ value dropping catastrophically until these managers then left. Usually with a massive, and massively unmerited goodbye package.

And everywhere there seems to be the same pattern. The ordinary workforce is cut, while the ranks of management expand massively. Wages for the lowest ranks of employees are also frozen, or else are given raises below the rate of inflation. Meanwhile, the managers give themselves massive pay rises, uses under the pretext of ‘performance related pay’. Even though the stats often show that the companies are actually performing worse than they were before these managers took over. The BBC is itself a prime example of this bloated, top-heavy management structure, but you find it all over industry. It’s part and parcel of the Zombie economics of Thatcherism, and has been criticised by the economist Ha-Joon Chang, amongst others.

Of course, one solution might be to put workers in the boardroom, and tie management pay to the performance of the company and improvements in pay and conditions for the workers, in line with the company’s growth and profitability. If the company prospers, and their workers benefit from the company’s performance, then the managers receive a pay rise. If they don’t, and the workers have to receive a cut in wages, then the management should also see their wages cut. There’s no way that can be brought in without screams from the rich that this would be a terrible imposition on them, and would prevent the best talent coming to British industry. But as I see no evidence at the moment of there being much talent in the massed ranks of British management except for grotesquely enriching themselves at the expense of their workers, there’s absolutely no reason to take this criticism seriously.

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