Management in the eighties: How is the job changing?

Long Range Planning Vol. 14, No. 4, pp. 21-33, Printed in Great Britain

~w~2~301/x1/040021-13s02.00/0 Pcrgamon Press Ltd.

1981

21

Management in the Eighties: How is the Job Changing? Johan G. Wissema, Nederland B V

Management

Consultant

and Jack

M. M. van de Winkel,

Shell

Method study can be regarded as one in futures research. Rather than trying to describe a most likely set of future developments, three general societal scenarios were used, each of which describes a possible future in a relatively archetypal way.

This

Subject in the environment of What developments companies and other organizations will have a significant impact on the way in which managers function? What changes will these developments bring about in the functioning of managers in the future? These two questions were the subject of the study reported in this paper. They immediately call for some definitions and limitations. The term managers was restricted to those responsible for the organization’s policy and administration, in other words the top managers. The study was restricted to the way in which managersfunction, that is their working patterns, their patterns of communication and the way in which they account for their actions to the internal organization, the stakeholders and society in general. Finally, the time horizon of the study was limited to 10 years, making it focus on the 1980-l 990 decade.

Dr. Wissema is a Management Consultant specializing in corporate strategy, futures research and R & D Management, Bakkenist Management 81 Consultants, 5 Emmaplain, 1075 AW. Amsterdam, Netherlands. Mr. van de Winkel is involved in socio-political forecasting and corporate strategy development with Shell Nederland BV.

This method has the advantage that it tends to eliminate possible personal preferences of the researchers. Approaches in which the most likely developments are predicted are invariably contaminated by the researcher’s personal preferences as to the likelihood of the developments. The method in which three alternative scenarios are used has the advantage that these preferences then become preferences for one particular scenario, thus allowing the construction of internally consistent scenarios. As one of the participants, Shell Nederland, already had a set of three basic scenarios available, the study group could concentrate on the elements of the scenarios that were of particular relevance for the future functioning of managers. Three groups of elements will be discussed below: social, financial and technological factors. These developments within the scenarios were correlated with elements describing the functionAs such, the ten basic roles ing of managers. described by Mintzberg’ were chosen, together with six strategic management archetypes.* This correlative examination leads to three descriptions of the future functioning of managers in each of the scenarios and hence to some general recommendations for managers, managers-to-be, and management. development departments.

The Shell Scenarios ‘Scenarios accounts

of

are internally consistent, possible futures. They

plausible should be

22

Long

Range

Planning

Vol. 14

August

1981

comprehensible, simple and adaptable, illuminating relevant uncertainties and broadly scanning the range of likely events.’ To this Shell definition one can add that scenarios should have the nature of archetypes, caricatures of a possible reality. The Swiss psychologist Jung distinguished introvert and extrovert people; no-one, however, is entirely one of these extremes but a mixture. Similarly, readers can establish their own expectations of the future by mixing the scenarios, very much in the way in which one can obtain any colour by mixing the three basic colours red, yellow and blue with varied intensities. The scenarios as developed.by Shell Nederland can be classified by the answers to two questions.3 ‘Do people expect material welfare to satisfy their real needs?’ and : ‘Will a pluriform society be capable of pursuing a sound, long-term economic policy?’ The ‘Business as it Used to be’ scenario (BU) considers economic growth essential for whatever needs have to be satisfied, with a government capable of realizing high growth. In the ‘Realism and Restraint’ scenario (RR), people are no longer convinced that their current problems will be solved by even more economic growth; the price of growth is often considered to be too high, and an individual feeling of progress will have to stem from other achievements. While these scenarios reflect relatively successful policy responses, the ‘Frustration and Conflict’ scenario (FC) describes a divided society, unable to define and tackle the problems it faces. The relationship between the scenarios is illustrated in Figure 1 while the scenarios themselves are briefly described in Tables 1, 2 and 3.

Impacting

Developments

The developments within the scenarios that are likely to have major impacts on the ways in which managers will function in the future were studied in more detail. The results .with respect to social developments, developments relating to the financing of companies, technological developments and management factors will be discussed below.

Social Developments-Labour First the social developments relating to the internal labour market, the external labour market and the orientation of labour. The conclusions are summarized in Table 4. Quality and quantity of the labour force increasingly become major factors in the policies of companies, particularly if there is little industrial If the volume expansion keeps track expansion. with productivity increases, the labour force will be stabilized and personnel will only be recruited to

replace people who have retired or resigned. If productivity increases faster than the volume expands, no personnel will be recruited and the labour force will age, threatening the flexibility and innovative power of the company. In the worst case, personnel must be laid off. In certain instances, internal mobility and training can partly offset the negative effects of a low recruitment rate. In the BU scenario, this recruitment rate is relatively high, although the volume expansion must be rather high, say more than 3 or 4 per cent, to effect a net labour increase. The FC scenario requires a high degree of flexibility and adaptability to account for sudden changes in the objectives of institutions such as unions, government and public opinion. In the RR scenario, pleasant work has priority over efficiency, making the existing labour force the driving and limiting factor in the development of the production process and the allocation of labour. With regard to the external labour market, it is expected that severe discrepancies will occur in this market in both Western Europe and North America around the year 1985. Not only will the discrepancy between supply and demand reach peak heights, there will also be a discrepancy in the quality of labour, i.e. a shortage of unskilled labour and an excess of highly skilled labour. However, it is expected that there will still be a shortage of certain kinds of highly skilled labour, especially where the nature of the work requires specific skills or personality. The education gap has a structural nature. The discrepancies described are largely independent of the scenario, at least in the short run (until 1985). The attitude of managers will be different, however, and so will national educational policies (see Table 4).

Management Table

1. The BU scenario:

‘Business

in the Eighties:

How

is the Job Changing?

23

as it used to be’3

This scenario is based on the assumption

that the fulfilment of most individual wishes is ultimately based on material welfare. When the increase of real income slows down, most people will realize that they value the ‘good things in life’ more than is now generally admitted. It is assumed that the feeling of satisfaction, reflected in current opinion polls, is a consequence of the rapid economic progress since the 1950s and the continuous increase of private expenditure until this moment. This would imply that satisfaction is based on a certain growth rate of prosperity or, in other words, on expectations of future levels of consumption. The collective sector of society, which also contributes to the ‘quality of life’ or well-being, will in one way or another require economic surpluses and therefore economic growth as well. In the industrial sector it will be recognized that restructuring, productivity increases improving the quality of jobs, more pollution control, etc., require and represent economic growth. A high economic growth rate is seen as the most effective strategy for reducing unemployment. This scenario does not imply an excessive eagerness for material wealth; it is only assumed that a realistic and effective policy will be followed. Workers and consumers are willing to sacrifice short term benefits to achieve stable economic development as the basis for well-being and progress.

The educational system will emphasize the value of specific knowledge and craftsmanship, thereby contributing to workers’ motivation. The work ethic will be ‘as it used to be’; unemployment is associated with a missed opportunity to create wealth. It is accepted that work cannot be a pleasure for all concerned, but this is compensated for by a high standard of living. Clear and effective long-term social and political policies will be required, and it is tolerated if industrial democracy makes no further progress as a consequence. The complexity and dilemmas inherent in modem society are realized, and decisions required to implement the policy are largely left to ‘people who know best’. Important government decisions will mostly be based on efficiency and economic considerations. Economic growth will mainly be seen as the most effective means of reaching a legitimate goal; it should not be obstructed by polarization and confrontation. ‘Growth problems’ will be seen as a consequence of wrong criteria in directing economic growth or injustice in distributing the revenues. In this scenario, growth will definitely be ‘selective’ (as the present policy prescribes), and will reflect society’s changing priorities. This psychological climate may be stimulated by other countries demonstrating that wealth creation is a rewarding and controllable process. There is no need to wait and see, ‘sharing the misery’, in the meantime. The economic policy necessary under a BU scenario will be aimed at rationalization and cutting government expenditure. Relative levels of wages and social benefits will be m-evaluated to boost motivation and incentives. It is realized that a relatively free interaction between supply and demand can prevent waste of money and manpower. Similar considerations make people aware of too much government interference. A delicate balance of power between government, industry and the unions is maintained. It is evident that some of the unions especially will be strongly opposed to the ‘conservative’ economic policy dominated by private enterprise. Even if the long-term development of employment and income under this scenario is very favourable, the classical opposition of labour versus capital may be used by the minority in an attempt at polarization. In this scenario, the private companies are appreciated as a source of welfare and employment; they are judged by their technical and economic performance. They are not expected to formulate private political and social strategies, and are allowed to allocate their resources on the basis of commercial criteria, when necessary supported by the government. The general public will become aware of the expertise and continuous efforts necessary for sound business decisions, and the risks that have to be taken. This will add to an increased feeling of trust in the motives of private companies, thereby reducing the impact of conspiracy theories.

Finally the orientation of labour. The value of labour lies not only in material remuneration but also in the recognition, satisfaction and personal development it brings about. How are the intrinsic aspects of labour, such as autonomy and opportunities to use creativity and interests, valued against the extrinsic aspects such as payment, fringe benefits, facilities for training and promotion, permanence of the job and others? Lack of intrinsic aspects can only be offset to a certain extent by extrinsic aspects. Labour inconveniences can only be partly compensated for by increases of either intrinsic or extrinsic aspects or both. They must therefore be removed or distributed; foreign labour is only a temporary solution as new generations of foreign workers will demand and receive equal rights. The ways in which the inconveniences are

compensated for are different for each scenario, can be seen from the summary in Table 4.

as

Social Developments-Institutions The system of a free market economy and private enterprise basically involves the coming together of people with talents, crafts or money to form an enterprise in which they take decisions as to investments, research, production and sales of goods or services vis-li-vis a market where individuals or groups take their decisions on what they will buy. The modern version of this system includes a national administration that creates the legal framework for these activities while there are an increasing number of stakeholders such as

24

Long

Table

2. The

Range

Planning

FC scenario:

Vol.

14

‘Frustration

and

August

1981

conflict’3

As in the BU scenario, it is assumed that a general feeling ofprogress is necessary for stability and satisfaction. In this scenario, however, there will be a problem in defining what progress is, and different groups in society will look at this from completely different points of view. Economic growth is considered to be only one of the factors contributing to progress. It is assumed that in an industrialized, pluriform society these lines of division are there to stay, imposing some restlessness or even a slightly chaotic character on society as a permanent element. A relatively low economic growth will lead to increased polarization and conflict ofinterest. At the same time, and this aspect is especially emphasized in this scenario, a link is seen to exist between increasing prosperity and ‘destabilization’; i.e. a loss of values and traditional references, leading to unrealistic expectations and frustration. Therefore, it is uncertain whether increasing prosperity will increase satisfaction; it is possible that a change of priorities invalidates this traditional point of view. This scenario is based on two complementary trends. The change of priorities mentioned is not properly recognized, the socio-economic policy does not anticipate it, and alienation or polarization is the result. On the other hand, the lack of agreement on economic issues prevents an economic growth sufficient to satisfy other groups in society. In both respects, a profound lack of understanding leads to frustration. Under these conditions it will be almost impossible to carry out a long-term policy; instead there will be a series of minor corrections, leading to results seldom wanted or expected. Side-effects of measures taken are generally disregarded. This decision-making process may be truly democratic; it is merely the symptom of a divided society. More emphasis will be put on the problems of distribution of wealth and income than on its creation. The value of the present economic system will be under constant discussion, but abrupt changes are not envisaged in this scenario. This scenario

could

lead to the following

developments:

The political decision-making system will be under pressure; politics might concentrate on unrealistic and false promises, as well as on tactics and short-term gains. Political decisions may be the result of an unreasonable struggle for power, with a 50 per cent-plus-one majority deciding in its own favour with scant consideration for others. Privileges once earned will be defended successfully, if necessary by extending the number of beneficiaries. Demagogy and simplification might lead to undesirable laws and privileges, which may be difficult to repeal. Political strength instead of consensus will be the decisive factor; there is little understanding of the complexity of socio-economic problems. Slogans will be commonly used, but at the same time it will be realized that they serve mainly party-political purposes. In particular, well-educated younger people could be frustrated when society is not in a position to value their contribution and efforts. People will find that an equal distribution of power, knowledge or even income will not be achieved. The old elite will be replaced by a new elite, just as

ambitious and powerful. There will be sufficient education opportunities, but, though they will contribute to selfdevelopment, they will not guarantee a better job. The government, while propagating decentralization, will gain more control and responsibilities. This is partly an autonomous process, due to lack of countervailing powers. As the socioeconomic structure thus becomes distorted, more and more people will make an effort to ‘beat the system’. At the same time, industrial development is considered to be ‘too important to be left to the entrepreneurs’. Partly as a consequence of the uncertain business climate, the government will have to support and direct more and more industries (e.g. to preserve jobs). This ad-/WC policy, leading to increased lobbying and lack of security, will also weaken healthy industries. In the end, non-viable lose power Local and

the government will be unable to enterprises. The difference from a and prestige in this scenario, since national government is free to use

fulfil all its vastly increased tasks, and society will have to pay for the rescue of centrally planned economy would become smaller. Companies are expected to the production sector in itself will drift away from the power centre in society. its powers, since, by definition, it serves the public and the national interest.

consumer organizations, environmentalists, political pressure groups, investors’ lobbies, etc. that also influence and guide the processes of production and sales. The relations between producers, buyers, administration and stakeholders will develop differently in each scenario. The expectations of the study team are summarized in Table 5. Changes in society and companies cause changes in of and the procedures in the organization companies. The trend towards a more functional view of authority perseveres. This means that the role of those subjected to authority will increase in importance and that managers will have to account for their actions not only to shareholders, but also to employees. In other instances, authority and power

may

have

to

be

shared

between

managers

and

employees. It is not only the continuing human pressure for democratization that calls for organizational reorientation. The rapid increase of overhead costs, the general inefficiency of indirect labour, the suhoptimization of over-developed bureaucracy and centralization, equally demand new concepts about the ideal structure of enterprises. The tendency is towards a diminution of scale within an enlargement of scale, the great organizational paradox of

our time. Patterns of decentralization are being explored by which not only executive powers are delegated, but also policy responsibilities. Parallel to this development is the centralization of certain

Management

Table

3. The RR

scenario:

‘realism

in the Eighties:

How

is the Job Changing?

and restraint”

In the BU scenario it was assumed that no real change of values will take place; in FC, the occurring

alienation and frustration were linked with changing values, but the real nature ofthis trend was not recognized. In the RR scenario it is assumed that an actual transition to a ‘post-industrial’ society will take place; also that society realizes the nature of the present developments, and anticipates this by conscious efforts and effective long-term politics. As in the other two scenarios, people will still want more; however, they will realize the complex nature of the issues. Problems are now much harder to define and to tackle than they used to be, and certainly economic growth is no panacea.

As the introduction indicates, the RR scenario describes a trend that is almost autonomous; it depends on reactions to the present level of prosperity, rather than on economic developments in the Netherlands or abroad. (which is said to be the final aim of most policies) will become more an individual feeling that cannot be achieved measures alone. People are no longer threatened by poverty or famine, but may feel a sense of uselessness, framework, and alienation in the face of large and uncontrollable institutions. In this scenario, the basic question more people will be ‘what do I really need and what will I do with my life’. As a consequence, they will be less efficiency considerations or the ‘rat-race’. Even if this kind of realism only applies to part of the population, the could be very important.

characteristic ‘Well-being’ by collective lack of social for more and motivated by resulting shift

The RR scenario is a plausible interpretation of current opinion polls. The general feeling is characterized by satisfaction and a desire for stabilization in peace and security. A low crime rate, environmental protection and understanding between people and countries are all considered to be far more important than an increase of material prosperity and income. It is felt that most measures proposed now will turn out to have unexpected side-effects, so that a thorough understanding of all factors is indispensable. However vague these attitudes may seem, they will not fail to influence politicians and thus the actual decisions taken. Economic growth will not be pursued at any price; negative consequences, as for the environment, will receive ever more attention. There will be an equilibrium between the sacrifices needed for higher economic growth and the benefits that one expects to derive from it. Part of the population will see this as a voluntary decision, but most people will find themselves having to accept fewer opportunities and will have to lower their aspirations. Therefore, a constructive and reasonable attitude is a necessity in this scenario; only by cooperation can the necessary rationalization and restructuring of the economy be realized. The relatively low economic growth limits the number ofwishes that can be fulfilled, but in this scenario this leads to rethinking and re-organization rather than to polarization (even if the semblance of polarization may be necessary for some groups). The RR scenario is characterized by a number of other features, which result from and are a compensation for low and decreasing economic growth rates. For example, low economic growth as a consequence of less emphasis on material consumption might lead to more leisure and opportunities for education. Society will prefer the luxury of doing things at less than optimum efficiency. More information will be made available and explained, decision-making will be decentralized and participation extended. In this way, the decision-making process might be slowed down and the quality of the decisions will not necessarily improve. Under a RR scenario it is felt that society appreciates the intrinsic value inherent in these issues, and is willing to pay for the costs involved in the consequent decrease of efficiency. Unemployment problems will partly be solved by taking care that people who are unfit or unwilling to work leave thejobs others and are supported by the State. More leisure and more government services (e.g. education) will be accepted instead higher disposable income. A right to work will gradually be replaced by the right to an income. Other trends that fit into this picture are related to a more equal income distribution and profit sharing. become more quality-conscious and look for durability; they will be less fond of ‘me too’ products.

Consumers

to of

will

Government responsibilities are expected to grow, but unmanageable bureaucracy and inefficient centralization will be avoided. At the same time, people will expect more and more from private companies, including matters hitherto outside their normal responsibilities, such as employment, environment, inflation and quality of life. Private companies will be valued for their indispensable contribution to society, but they will no longer retain a position in the centre of society unless they become much more open, build up more confidence among the public (‘legitimacy’) and are clearly seen to care about their impact on society. The achievements for which industry was admired in the 1960s will more and more be taken for granted. A corporate strategy will have to include more than economic criteria. As far as internal policy is concerned, a company is expected to contribute to the objectives ofall employees, rather than merely be a production unit where one has to spend forty more or less satisfying hours a week. The management will have to account for its policy to the employees whose well-being depends on it.

26 Table

Long

Range

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Vol. 14

1981

4. Social developments-labour Business as it used to be

Internal labour market

The problems of getting the right man for the right job have a quantitative nature. These can usually be solved by using arguments of business and production efficiency, etc. Emphasis is on material remuneration. This can lead to inflexibility and problems with older workers. Employees will use their power in a positive way in that they will tend to stimulate efficiency drives, etc.

External labour market

Depending on the rate of economic growth, small to large shortage of unskilled labour and tendency to automation Education and training will be adapted to the demands of the labour market

Orientation of labour

Labour-extrinsic aspects remain the maior incentive for work Variability of work hours only for part-time work for women High extra payments for inconvenient or dangerous work

Table

August

Frustration and conflict

Realism and restraint

Frictions in society have their counterparts within the labour force and labour relations of a company

Allocation problems also have a qualitative nature. The production process and the allocation of labour will largely be adapted to the existing labour force

Labour allocation problems, distribution of labour, the introduction of new professions and possible reductions of the labour force are the subjects of continuing confrontations between managers and employees Negative power (veto, sabotage, strikes of employees) will play a major role

More non-material goals are being pursued by employees and by people in general Aging of the labour force More acceptance of management decisions because of increased communication and participation

Major uncertainties on the labour market leading to severe tensions and conflicts

Less tension in the labour market because of a continuing improvement of the quality of labour

Employees will have to adapt labour conditions in order to provide for less skilled labour

High remuneration for unmodifiable unpleasant and high-risk work

No clear educational objectives in society. Unrealistic ideals and running behind the developments Extreme forms of labour orientation. High - payment on the one hand, to stimulate the offer of labour. Farreaching concessions on the other hand to veriation in work hours, unpaid extra holidays, etc. This results in a dual labour market for primary and secondary jobs

Non-vocational education in state schools, vocational training within company

Labour-intrinsic aspects become more important Flexible working hours for both men and women, part-time jobs, etc. Individualizing of labour time and hours

5. Social developments-institutions Business as it used to be

Frustration and conflict

Realism and restraint

Legitimation of the enterprise

Open market economy with accent on the market

Planned economy with accent on the national administration

Participative economy with accents on society and the individual

Structure of the enterprise

Departmental (functional) organization structure. Operational activities depend to a major degree on the directives of superiors

Divisional structures with rigid directives from the divisional management to its executives

Decentralized organizational structures with relatively independent operational units and centralization of only the essential corporate functions

Decision-making process in the enterprise

The company’s objectives are central in democratization and participation. These will develop along lines of efficiency and suitability

Mutually exclusive objectives arise simultaneously. Efficiency is still the guiding principle for decisionmaking processes, which on its own creates extra tensions

Democratization and participation themselves become objectives. This creates an extra dimension in the enterprise in the sense of a societal objective next to the production and income-generation objective

Government

Accent on market mechanisms. Limited role of government

Changing demands and prohibitions by the government in attempts to control tensions

Structures of discussions between government, employers, employees and stakeholders in which the government plays an important and accepted role

Labour unions

Focus on increase of material welfare and reduction of working hours. Conflicts are in the materialistic area with possibilities of compromise

Tensions in and between the unions results in short-term policies satisfying the member’s immediate wishes. Conflicts are in the area of norms and values with relatively little possibilities of compromise

Focus on increases in well-being in the non-material sphere. Conflicts may arise here with good possibilities of compromise

Management umbrella functions, such as financing, innovation, management planning and development.

Company

Financing

The availability of adequate sources of capital is one of the vital prerequisites for free enterprise. Not only the amount of capital is a determining factor for success of this system, but also the conditions under which it is made available: short term, long term, share capital, loan capital. Factors that determine the amount of capital available are the earnings of companies, the proportion of retained earnings and the risk-sharing funds that are made available by investors. The latter depends amongst other things on the role the government plays in the the balance of payments, the capital market,

Table

6. Financing

in the Eighties:

How

is the Job Changing?

27

investments by foreigners and the investments in These factors, as well as the foreign countries. capital need and the rates of inflation and interest, are likely to differ quite significantly in each scenario. Conclusions with respect to these factors are contained in Table 6.

factors Business as it used to be

Frustration and conflict

Realism and restraint

Company earnings

Acceptable level as it is realized that high economic growth can only be achieved if companies can make a certain level of profits-Acceptance of this level is eased by confidence in the future

Profits are being looked upon as dirty and anti-social. Profits are taken away by taxes or other schemes. Earnings decline further due to high rates of inflation and interest

No growth of profits because of the many non-material demands

Retaining of earnings

Investors accept a relatively high level of retained earnings as they can see where the money goes and as they have confidence in the growth of the company

In view of the high risk of investments in share capital, virtually all earnings have to be paid out

Retainment of earnings is very possible if all parties agree

Public is willing to invest in share

Political pressure to level disposable income leads to consumption rather than savings. The high investment risks also disfavour the generation of share capital

Funds offered by the public for share. capital will virtually disappear. Agreed savings however will result in offers of share capital

Availability of share capital

. capital because it favours the free enterprise system. The funds are also available because of the rapid growth of incomes and the absence of political pressure on income distribution

Government role on the capital market

Governments will not artificially prolong the lives of unprofitable companies. Limited increases in the costs of social security schemes

Governments will acquire large funds to support weak companies

Government will participate in the financing of selected weak and profitable companies

Balance of payments

Develops favourably because of strengthening of the competitive position and the continuous restructuring of the industrial apparatus

The current account will be structurally in trouble

Will show deficits although the current account will be balanced. Capital account will have deficits

Investments by foreigners/in foreign countries

Local investors concentrate on home market and have little tendency to go abroad. Fair attention by foreign investors

Government will probably borrow abroad. These capital flows will be compensated for by investments in other countries by local investors. No activities at home by foreign investors

These will be balanced. The volumes in both directions will be relatively small

Capital requirement

Relatively high because of high rate of expansion and depth investments. The problem of finding adequate funds can however be solved

Requirements for really profitable projects can be covered but there is a structural low equity/debt ratio that cannot be improved

Low capital requirements because of moderate expansion rate and priority of employment over depth investments. Stable climate despite small supply of capital

Rates of inflation and interest

Double digit inflation because of tensions in the home economy and rapid price increases in basic raw materials and commodities. Because of this a high interest rate

High inflation because of wage/price spiral and weak currency. High interest rates because of this

Low inflation rate because of low wage-increase demands

28

Long

Range

Planning

Vol. 14

August

The first aspect brings us to the critical attitude of the public to technological leaders and to the idea of technology assessment, whereby the side-effects of a new technology are analysed and optimized when it is still at the development stage. Depending on the scenario, this requires additional capabilities on the part of the manager who should be able to sense the general attitude and promote his organization and direct than the customers others to stakeholders.

1981 provides instances

constraints to this tendency, but in other makes smaller production units possible.

Finally, technology progress has its influence on the manager’s office. These ‘offices of the future’ have been discussed widely in the literature which need not be repeated here. Major conclusions from the impact of technological of the scenarios are development on each summarized in Table 7.

The effects of technological development on the operation of the company has much to do with the way in which technology influences the optimum production scale and the way in which companies work together. The merger decade (1965-1975) has towards centralization of shown a tendency industrial production. With smaller or even negative expansion rates and turbulence of the. company’s the increasing environment, together with the increasing complexity of issues, the trend now seems to be towards decentralization, as described above. Technology

Table

7. Technological

development Business as it used to be

Frustration and conflict

Realism and restraint

Decentralization of national production

Few independent small companies, except in maintenance and semiartistic luxury articles

Many small companies, most of which disappear as quickly as they come

A gradual decentralization takes place. Large companies break down effectively into semi-independent small units except where technological scale prohibits this

Specialization

Explicit and clear-cut distribution and specialization of work for efficiency reasons

Gap between generalists and specialists and between specialists of different disciplines. Suboptimization effects. Specializations become part of power alliances in the company

Training has emphasis on general education. Trend is de-specialization, more generalists in management

Environment, growth

Few anticipatory environmental measures; feedback control and expost priorities. Acceptance of a certain level of dangerous sideeffects of technology. Limitation of the most severe side-effects

Changing priorities, depending on power and influence of pressure groups. Unbalanced decision-making processes, uncertainty about timing of permits, taxes on wastes etc. Much red tape

High priority for societal feedback on technological developments. Anticipation and optimization of side-effects by technology assessment techniques. This gives some delays compared to BU, but certainty over the timing of permits

I

Scale of production capacity

Realization of the scale that is economically most efficient

Mixed picture: certain units work at an economically optimal scale, others don’t because of pressures not to do so. Delays in investments because of capacity discussion

A socially optimal scale size is realized in which electronics are used to improve the quality of labour

Product innovation

Market incentive for innovation. Grouping of different functions to produce innovations is possible. Unity of objectives with respect to innovation

Lack of co-operation and unity of objectives prevent successful innovation. Conflicts about the need for and the direction of innovation

Innovation is socially oriented. New products arise from the new way of life and social desiderata

Process innovation

Agreement on the need for continuing efficiency improvements by means of new production technologies

Conflicts and problems when it comes to the introduction of new production processes. Conflicts with the unions and between the unions

Unity of goals. Work conditions as well as efficiency are starting points for the development of new technologies

Dynamics

Willingness to change. dynamic attitude

Resistance to change, suspicion

Less resistance to change because of communication and participation

Management Much research has been carried out with respect to these questions and it was decided to use the manager roles as defined by Mintzberg’ and the strategic management archetypes as defined by Wissema et al.’ as key.elements of the functioning of managers. Mintzberg distinguishes interpersonal, informational and decisional roles (see Table 8). Thefigurehead role describes the duties of representing the organization in all matters of formality. Status enables the manager also to play the liaison role, in which he interacts with his peers and other people outside his organization to gain favours and information. The third interpersonal role, that of leader, defines the manager’s relationships with his subordinatesmotivating, staffing and so on. Of the three informational roles, the first, that of monitor, identifies the manager as receiver and collector of information, enabling him to develop a thorough understanding of his organization. The second role, termed disreminutor, involves the transmission by the manager of special information into his organization. The third, the spokesman role,

Table

8. Summary Role

Interpersonal Figurehead

of Mintzberg’s

ten roles (quoted

in the Eighties:

How

is the Job Changing?

29

involves the dissemination of the organization’s information into its environment. Finally, four decisional roles were delineated. In the entrepreneur role the manager’s function is to initiate change; in the disturbance handler role the manager takes charge when his organization is threatened; in the resource allocator role the manager decides where his organization will expand its efforts; and in the negotiator role he deals with those situations in which he feels compelled to enter into negotiations on behalf of his organization.’ The six strategic management archetypes of Wissema et al. were developed to match six strategies for business units or profit centres of companies. These strategies were defined as the direction from the present strategic position to a desired one, the word strategic position being defined as a point in a grid in which the competitive position of the business unit was plotted against the life cycle phase of the product. With four life cycle phases (emergence, growth, maturity, decline) and three levels of competitive strength (high, medium, low), a four-by-three matrix was obtained. It was

from

Reference

1)

Description

Activities

Symbolic head; obliged to perform a number of routine duties of a legal or social nature

Ceremony, status requests, solicitations

Leader

Responsible for the motivation and activation of subordinates; responsible for staffing, training, and associated duties

Virtually all managerial activities involving subordinates

Liaison

Maintains self-developed network of outside contacts and informers who provide favours and information

Acknowledgments of mail; external board work; other activities involving outsiders

Seeks and receives wide variety of special information (much of it current) to develop thorough understanding of organization and environment; emerges as nerve centre of internal and external information of the organization

Handling all mail and contacts categorized as concerned primarily with receiving information (e.g. periodical news, observational tours)

Transmits information received from outsiders or from other subordinates to members of the organization; some information factual, some involving interpretation and integration of diverse value positions of organizational influencers

Forwarding mail into organization for informational purposes, verbal contacts involving information flow to subordinates (e.g. review sessions, instant communication flows)

Transmits information to outsiders on organization’s plans, policies, actions, results, etc.; serves as expert on organization’s industry

Board meetings; handling mail and contacts involving transmission of information to outsiders

Searches organization and its environment for opportunities and initiates ‘improvement projects’ to bring about change; supervises design of certain projects as well

Strategy and review sessions involving initiation or design of improvement projects

Disturbance handler

Responsible for corrective action when organization faces important, unexpected’disturbances

Strategy and review sessions involving disturbances and crises

Resource allocator

Responsible for the allocation of organizational resources of all kinds in effect the making or approval of all significant organizational decisions

Scheduling; requests for authorization; any activity involving budgeting and the programming of subordinates’ work

Negotiator

Responsible for representing the organization at major negotiations

Negotiation

Informational Monitor

Spokesman

Decisional Entrepreneur

Long

30

Range

shown that there defined above.

Planning

arc only

Vol. 14

six basic strategies

August as

The six manager types were derived from the person’s conformity, sociability, activity level, pressure to achieve and style of thinking. The descriptions are reproduced in Table 9. In the original publication, the relative effectiveness of each type of manager in the respective strategies was demonstrated. For this study, the archetypes are important because each scenario will require a different distribution of business unit strategies which leads to different demands on the types of manager as will be discussed below.

Conclusions How will managers function if a scenario were to this question comes become reality ? Answering down to correlating the scenario aspects as described in Tables 4, 5, 6 and 7 with the management aspects as summarized in Tables 8 and 9. One reservation however has to be made. In the following discussion, it has been assumed that the ‘culture’ within the company coincides with

Table 9. Summary Reference 2) Strategic management archetype

of the strategic

Conformity

management

1981 that of the scenario. It is very possible, however, that the situation of an individual company will deviate from that ofthe scenario. One can imagine a RR company in the FC-scenario or a FC company in the BU scenario. The picture of the manager in each of the scenarios is summarized below with much of the material in Tables 10 and 11.

The Manager to be’

as it Used

The manager in this scenario very much remains the top man who takes the most difficult decisions, who has the contacts with non-executive VPs and shareholders and who has to spend relatively little time with groups other than those with which he traditionally has contacts already. The appearance of managers from other than the traditional social groups leads to relatively few problems because of a generally accepted formal and informal distribution of responsibilities and work. Conflicts with unions can be tough, yet they are manageable because they only rarely arise from differences of principle.

archetypes

Sociability

in ‘Business

of Wissema

Activity

et al. (quoted

from

Pressure to achieve

Style of thinking

Pioneer

Very flexible, very creative, divergent

Very extrovert, much flair and glamour but driven by circumstances and solitary, mistrustful

Hyperactive, restless, anticipatory, uncontrolled

Stormy, daredevil, seeking challenges, motivated by anything unique

Intuitive-irrational, thinking disconnectedly, original, divergent

Conqueror

Appropriately nonconformist, creatively structured towards anything new

Selectively extrovert, forms small groups of chosen individuals

Energetic, reacts to ‘weak signals’, nervous with great self-control

Increasing sphere of influence, calculated risks

Capable of seeing beyond limits, generalist, rational

Level-headed ruler

Strongly structured, ‘according to the time-table’, security

Amicable, team-worker, maintains grip, wellregarded

Directed to objective, stable, according to agreement

Level-headed growth, satisfaction through control of the situation

Solid, systematic, penetrating, specialist

Administrator

Reproducible, routine, docile

Introvert, coaching

Stable-static, via procedures, waits and sees, ‘yes, but’

Maintaining of status quo, defending of territory

Solid and conformist vision, connection with earlier situations

Economizer

Bureaucratic, dogmatic, rigid

Procedural-dirigistic

Laissez-faire, doing what has to be done, little initiative

Reactive behaviour, stimuli from outside

Legalistic, everything according to precedent

Insistent diplomat

Maximal flexibility within a fixed objective, accepted restrictions

Considerate/human, takes others into account, decisive/inspiring confidence, allays emotion

Steady, retentive but flexible

More strategic/directed towards the long term than tactical/directed towards the short term, directed towards objectives but also carefully measured input

Broad, relativistic, many sided

Management Table

10. The manager’s

in the Eighties:

How

is the Job Changing?

roles in the scenarios

Business as it used to be

Frustration and conflict

Realism and restraint

Figurehead

The traditional role remains important and can hardly be delegated

Danger of overemphasizing of this symbolic role, which makes the manager rather powerless

Decreasing importance of this role. Difficult decisions are taken by teams

Leader

This role is less important; the motivation lies in the work itself and in the remuneration

This role is severely handicapped. Motivation is difficult because people require totally different and often mutually exclusive incentives

Major role. This scenario requires inspiring leadership

Liaison

The manager handles or delegates the external contacts

Each pressure group in or around the enterprise will have its own liaison. The normal external contacts are much desired by these groups

This role is distributed: the manager is more a co-ordinator of the external contacts than a delegator

Monitor

Information retrieval and handling is shifted to specialists supervised by management

Manager will attempt to monopolize the information stream in order to enforce his position; variable success

Information made-to-measure executive; well co-ordinated

Spokesman

Manager remains the only or principal spokesman assisted by public relations specialists

Manager will attempt to monopolize this role with variable success. Unauthorized leaks of information

This role will be delegated case by case to the most appropriate person

Entrepreneur

This role lies with the top group, headed by the manager

Mainly with the manager, together with his ‘coalition partners’ and used against others

Planning and policy procedures are used by which new projects come about in a natural way. The manager is co-ordinator and stimulator of this process with adequate room for initiatives

Disturbance handler

Internal conflicts are solved via the hierarchical system. The manager only deals with conflicts in the top group

Manager is often a party in ‘company political’ conflicts

Manager is primarily a mediator and stimulator

Resource allocator

The manager takes the fundamental allocation decisions; details go down by the hierarchical system

Manager is an active allocator, also on the lower levels, or at least, he attempts this; divide and rule

Manager guides the allocation process that is basically an extension of the planning process mentioned above

Negotiator

The manager is the top negotiator

Negotiations are carried out by the most appropriate or powerful party

Manager is the finalizing negotiator on the basis of team preparation

Business as it used to be

Frustration and conflict

per

Realism and restraint

Pioneer

Relatively many opportunities for pioneers

No place at all for pioneer types

Only in some smaller companies where they can act as driving force

Conqueror

This type is also much needed, even more than the pioneer

Only in certain parts of the company that attract relatively little attention. Alternatively as driving force of internal pressure groups

Second man in growth organizations

Level-headed ruler

Together with the conqueror, the most important type in this scenario

Most important type in growth organizations

Second man in non-growth organizations

Administrator

Important in non-growth, established organizations

Most important type in non-growth organizations

Only in the lower echelons

Economizer

Only in the lower echelons

Is able to survive quite well in certain positions

No possibilities in management functions

Insistent diplomat

Only required in certain divestment situations

Gets few opportunities, but there are exceptions where a Talleyrand’s role needs to be played

Most important type, as first man in both growth and non-growth organizations

32

Long

Range

Planning

Vol. 14

August

1981

The Manager in ‘Frustration and Conflict’ It can be expected in this scenario that

the possession of the manager’s position must be regarded as an added value in the delicate balance of power between the various groups inside and outside the enterprise, very much like the advantages a chess player enjoys in having a queen instead of a knight. It is not inconceivable that weak persons will be appointed by way of a compromise. This would make the manager’s position comparable to that of the’ medieval Merovingian kings in France or emperors in medieval Germany. Even if this does not happen, the manager will probably be little more than a power between other powers in which he will tend to maximize the advantages his position offers, whilst his opponents’ will try to neutralize these. in any case, the manager will not ‘have the generally accepted role as top leader: he manipulates and is manipulated.

The Manager Restraint’

in ‘Realism

and

The accents in this scenario are very much on working in teams, the members giving one another room for personal growth, communication and discussion, sometimes at the expense of quick are required response. In BU few compromises because there are few countervailing principles, in FC the compromises often have a forced nature, and in RR the compromises will be more sincerely followed because they have been jointly agreed. In contrast to FC, the decision making process will terminate when the decision has been taken, For the manager this results in a shift of attention from the figurehead role to the leader role.

Requirements

of Managers

It is obvious that each scenario requires rather different managers. A manager who can function very well in a BU situation can be completely inadequate in FC or RR. On the other hand, a manager who feels happy in the FC environment will probably not be accepted in BU or RR while a good RR manager might be considered too soft in BU or FC. It is therefore not possible to come to uniform conclusions as to the future requirements on managers.

The conclusions recommendations.

have

Recommendations Managers

led

to

the

following

to Individual

Any reader who partly or wholly uses this paper to re-think his or her own career and future has in fact already followed the first recommendation. Awareness of the career experience is considered more desirable than ever. The future is uncertain, which makes it impossible to design the kind of career plan for life which students were recommended until recently to map out. It is better to plan moments of looking backwards and forwards in the career, standing before the mirror to see how one’s norms and values have evolved in a society where especially the fundamental questions of life are constantly being challenged and subjected to experiments. The first requirement on the manager of the future is to be consciously himself or herself, to know what his personal values, norms and goals are and how he wants to respond to other people, especially to people who think differently. It is a matter of finding a balance between the introvert and extrovert sides of one’s personality. A second recommendation to future managers is to specialize during their training and early career in a management discipline, such as marketing, controller’s functions, treasurer’s functions, production, personnel, R & D management and so on. Naturally managers have to acquire a good sense of other disciplines as they move up to the ladder. There has been a tendency, however, to train general managers at business schools. The European experience is that these graduates are often quite useful in their early careers as assistants to Board members or in the lower staff functions. However, in their mid-career, they find it difficult to acquire a more responsible job and they get lost. Aspects of general management can better be taught in postexperience courses than at school and the specialist these skills as he moves along, can acquire deliberately maintaining his specialization, even if he is not working in that discipline any more. Thirdly, managers are recommended to plan the training of their social skills, these being the other half of the capabilities a manager should have mastered. This calls for life-long training because different aspects of social behaviour and interaction come about as a person grows older. It is advisable to hire specialists to reflect on these issues. Managers

Management are used to keeping up their management-discipline skills, and social skills are equally important. Much has improved in the therapeutic sphere since the early days of sensitivity training, although a warning must still be made against the widely flourishing non-professional therapists. Summarizing, we advise the manager to know and be himself/herself, to specialize in and keep up a management discipline and to train in social skills. At least 10-15 days per year should be set aside for this purpose, including, for example, time for conferences on new management techniques of futures research.

Recommendations Development

for Management

Despite all the attention it attracts, management planning and management development are still underdeveloped in most companies, if formal procedures exist at all. Reasons for this are the inherent limitations on planning with human beings and, on the other hand, the existence of safety nets in the form of a free manager’s market. We think however that management will become the prime asset in the future which means that companies will have to raise their own management potential because the free market (advertizing, head hunters) will become increasingly unreliable when quality gets scarce. This makes management development one of the prime corporate functions, to be supervized by the Chief Executive himself.

in the Eighties:

How

this synchronization should be employed.

is the Job Changing? have

been

developed

33 and

Secondly, experience of social and societal affairs becomes paramount for future managers. It is therefore advisable to create job-rotation positions in company departments such as social welfare, personnel and public relations and to appoint people with management potential to these positions for a number of years in order to gain this experience. Finally, careers always go upwards or stay on the same level. Why should older managers not step down in their later years when the burden of their tasks becomes physically impossible? This can be compared with the European parliamentary system where members of parliament may become cabinet ministers, returning to the parliament benches when the cabinet falls. The curving back of career lines is, of course, a delicate issue, but should be studied against the results of this study and the fact that many managers die early because of too long an exposure to stress.

Arkrlnwled~e,nent-This by a team of managers

paper is based on a study4 carried out and their cnvironmcntal analysts. The authors want to thank the participants for their permission to publish this paper.

References (1) H. Mintzberg, The Nature of Managerial Work. Harper & Row

Our first recommendation is to synchronize management development and planning with the strategic planning of companies. This link is logical but is nevertheless absent almost everywhere. Where it is absent, management development becomes a haphazard affair with accents on noncommitments and improvization. Techniques for

(1973).

(2) J. G. Wissema, H. W. van der Pal and H. M. Messer, Strategic management archetypes, Strategic Management Journal, 1 (1). February (1980).

(3) Unpublished: The long term scenarios for the Netherlands, Central Planning 81 Economics Department, September (1978). (4)

Shell Nederland,

J. G. Wissema (Ed.), The Functioning of Managers in the Future (in Dutch), Nive-VSB-Kluwer (1979).