Power is such a loaded word that it is frequently absent from discussions of management, especially today when such (presumably antithetical-to-power) concepts as “collaboration” and “cooperation” are the reigning principles. Yet every competent manager must have a solid grasp of the effective use of power, and any organization can be crippled, not only by the abuse of power, but also by imbalances in its distribution. In addition, the role and legitimacy of managerial power lie at the heart of any analysis of capitalism’s future.
George Orwell, whose centenary birth is being celebrated this year, understood this latter issue particularly well. Best known for his two novels Animal Farm and 1984, Orwell is widely regarded as having been “right” about Communism and Fascism, the two ideological scourges of the 20th century. But his writings also have a lot to say about the future of capitalism, for what is less well known is that Orwell’s inspiration for 1984 came in part from his deep antipathy to the central message of James Burnham’s massive wartime bestseller, The Managerial Revolution: What Is Happening in the World, published in 1941 by the John Day Company.
The Orwell–Burnham discordance defined the battle lines between the opponents and supporters of managerial power, creating a field that continues to be fought over to this day. Six highly regarded new management books provide insight into the current state of the debate. The Company: A Short History of a Revolutionary Idea (Modern Library, 2003), by John Micklethwait and Adrian Wooldridge, tracks the evolution of the corporation from 3000 b.c. to modern times.
In Who Really Matters: The Core Group Theory of Power, Privilege, and Success (Currency Doubleday, 2003), Art Kleiner examines the nature of power within organizations. False Prophets: The Gurus Who Created Modern Management and Why Their Ideas Are Bad for Business Today (Perseus Publishing, 2003), by James Hoopes, takes the management gurus of the past to task for failing to deal squarely with the issue of managerial power.
In Beyond Budgeting: How Managers Can Break Free from the Annual Performance Trap (Harvard Business School Press, 2003), Jeremy Hope and Robin Fraser propose a new management model that leads to a radical decentralization of managerial power. And two more books investigate the negative effects of exercising power: When You Say Yes But Mean No: How Silencing Conflict Wrecks Relationships and Companies...and What You Can Do About It (Crown Business, 2003), by Leslie A. Perlow, and Toxic Emotions at Work: How Compassionate Managers Handle Pain and Conflict (Harvard Business School Press, 2003), by Peter J. Frost.
Framing the Debate
It is useful, however, to begin back in 1941. Contravening a favored notion of the left — that capitalism would turn into socialism — Burnham, in The Managerial Revolution, contended that both dynamics were changing into what he called managerialism — the de facto control of the factors of production and the exercise of power by managers rather than shareholders or workers. Thus, although the rhetorical justifications for the use of this power might have differed across societies, the result was always the same — the managers won.
Orwell concluded that Burnham rather approved of this development and accused him of both cowardice and power worship, charges that seemed bolstered by Burnham’s next book, The Machiavellians, published in 1943 by the John Day Company. In it, Burnham argued that, when one looked at the evidence through the eyes of Machiavelli and his “followers,” like sociologists Robert Michels and Vilfredo Pareto, democratic self-government was an unattainable ideal: All societies and social movements were inherently stratified and all power was of necessity based on force and fraud. Although the masses might need to believe in the myths, their leaders and other members of the elite, who studied the evidence scientifically, could not believe — although they had to pretend that they did. “The leaders must profess, indeed foster, belief in the myths or the fabric of society will crack and they will be overthrown,” wrote Burnham. “The leaders, if they themselves are scientific, must lie.”