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 / Winter 2003 / Issue 33(originally published by Booz & Company)


Best Business Books 2003: Management

The Managerial Elites
The complexity and scale of most modern organizations requires that they be modular and hierarchical in structure. There will inevitably be an elite group of people who assume responsibility for the performance of the organization and through whom power will be applied. In Who Really Matters — a book that began as a series of articles in strategy+business — management consultant Art Kleiner writes for organizational insiders about this group, specimens of which are found in every institution. The elite, which he calls the Core Group, does not necessarily consist of managers alone, although they usually make up the majority of it. It’s the care and feeding of this Core Group that is far and away the organization’s first priority, or, as Kleiner puts it in the title of his opening chapter, “The Customer Comes Eighth.”

Although the Core Group is present in every organization, its existence may be shadowy and even undiscussable, with managers reluctant to admit that anything beyond the formal structure actually exists. Kleiner suggests that up to 95 percent of the members of an organization have a purely contractual relationship with the establishment and are not members of the Core Group. Nevertheless, the Core Group is real: It is the embodiment of the organizational mind, and its wants and needs are amplified so that the organization will meet them. Kleiner has an eloquent way of describing what it feels like to become a member of such a Core Group: It is, he writes, as if the organization falls in love with the individual. This is no passing fancy but a deep, headlong passion — all of a sudden the organization is showering you with money and perks and giving you access to its innermost secrets. The individual is usually swept off his or her feet, helpless to resist such a powerful seduction.

Core Groups are inherently neither good nor bad, Kleiner suggests; they are a fact of organizational life and essential if an organization is to make sense of a complex world. Like the individuals in them, however, Core Groups have the potential for both good and evil. The better Core Groups, the author argues, are more expansive and inclusive in their spread, and membership in them is based on merit rather than on other characteristics, such as gender and race. He cites Springfield Remanufacturing Company (SRC) and its open-book style of management as an example of an Expanded-Core-Group organization where everyone has access to the numbers. This transparency, and the accessibility of the measures of performance and the webs of cause and effect that produce them, would seem essential to the acceptance of managerial power as legitimate.

In False Prophets, Distinguished Professor of History James Hoopes of Babson College examines the writings of eight management experts, from Frederick Taylor to Peter Drucker, and shows the various ways in which they either duck or finesse the question of managerial power. He makes a compelling case that these writers have been much happier expounding on integrative cultures that empower workers to go beyond the ordinary, and on the virtues of incentive plans that reward high performers, than talking about coercion and threat. Hoopes argues, less convincingly, that this bias has been “bad for business” because, through superficial talk about the possibility of manipulating culture and by appealing to managers’ moral vanity, writers may blind managers to the inherently undemocratic nature of managerial power and its fundamental contradiction of our social values of freedom and equality. What is needed, according to Hoopes, is more emphasis on the reality of managerial power in corporations and more self-awareness and moral humility — emotional intelligence — on the part of those who wield it.

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