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MANAGERS AND MATES

Laconic: Management style that makes inarticulateness a virtue.

Readers may well object that this romantic indulgence in literature is anachronistic and irrelevant to the current concerns of Australians, especially those in the business of management. After all, these philosophical speculations were products of the romantic fantasies of urban intellectuals, not a few of whom were overly addicted to alcohol. Most Australians know little of the bush and care not a wink about its existential implications. They are suburbanites who rarely venture more than a hundred kilometres from the security of home base, except for tropical holidays. Is it not therefore fanciful and misleading to burden Australians with tensions and agonies that simply do not apply to most of them? A suburban existence dominated by the cretinising effects of the mass and social media protects individuals from existential angst to such an extent that Australians can happily claim that ‘we are all individuals’. Of course, it is possible, and some think likely, that the characteristic behaviour of Australians is a smokescreen for their inability to make the dynamic adjustments of which Americans are proud. The laconic Australian way is, on this view, little more than a pathetic attempt to ward off the presence of those who have developed consummate social skills which threaten artless folk. To go further, to suggest that Australians disvalue performance might suggest that they have yet to find themselves. Their hollowness, so often commented upon by Asian and European visitors, may be a sad fact. Is their disdain for politicians, bureaucrats and managers a well-rehearsed cynical romanticism? Or is it mere adolescent rebellion?

Distrusting managers, Australians nonetheless demand much of them and grudgingly respect those who demonstrate such personal qualities as tough-minded realism, initiative, courage or sardonic humour. Since there are few opportunities to demonstrate these qualities in their jobs, managers are ridiculed rather than respected. The only people who believe that managers are leaders are managers, and some of them are not sure.

Australian managers have never enjoyed a good reputation, even within their own ranks. Only at two activities are Australians incurably mediocre – government and business. So wrote Hugh Stretton, echoing Donald Horne, who lamented the fact that it is Australians’ misfortune that their affairs are controlled by second-rate men – ‘racketeers of the mediocre who have risen to authority in a non-competitive community where they are protected in their adaptations of other people’s ideas’.¹ Yet there are, according to Stretton, grounds for hope in our ‘profound and lovable virtues’: a friendly, not-toocompetitive society that is still the world’s most egalitarian in manners, if not in fact.² The problem for Australians is how to combine our profound and lovable virtues with the pragmatic demands of management.

Australian managers complain bitterly about excessive government control of their business lives. Yet, when companies run into trouble they want the government to solve their problems for them. Sadly, many government bureaucrats have been only too willing to comply, thus supporting capitalism for workers and socialism for over-paid managers. Obscene levels of executive remuneration, even for rank incompetents, have led to increasing cynicism about the quality and worth of managers, even within their own ranks.

Australian managers have been widely portrayed as artless, unsophisticated and transparent. Not for them the ruthless confrontation supported by devious strategies to achieve personal goals. Rather, they are an engaging mix of humanity, consideration and conformity. Whereas Americans are performance-orientated, Australian managers suffer certain doubts. If performance is everything, one has to applaud and reward outstanding performers irrespective of their behaviour. And this Australians will not do. If it is true that the English expect to lose at sport with dignity and Americans to win without it, then Australians aim for performance with caveats. Since Australian managers are determined quietly to defend their quality of life, they have been sceptical about imported management ideas and practices, and those that appear to threaten quality of life are allowed quietly to wither on the vine. Direct confrontation with overseas experts and gurus is not the Australian way. Rather, the gurus’ seminars are well attended, their jargon briefly adopted, lucrative commissions concluded, but the ‘new’ management models are rarely applied.

One difficulty in trying to understand Australian managers is that, given local values, they are regarded as mediocre by definition. Of course it is possible that Australian managers are mediocre in fact and deserve their reputation as ‘racketeers of the mediocre’. Reading between the lines of government reports and academic articles, it appears that their reputation for mediocrity is based on international comparisons with American managers. Are Australian managers regarded as mediocre because they oppose the profound and lovable virtues of American pragmatism?

Australian managers face a daunting task if they are regarded as mediocre by definition. Indeed, it is difficult to imagine what it would take for Australian managers to be widely respected and even revered. They are faced, therefore, with an apparently insoluble problem: trying to promote local values, they manage not to manage. Realising that ‘getting on with colleagues’ is important to their survival, they have danced around American-style confrontation, preferring a unique form of humanism which emphasises performance and personality, management and psychology. For many years, Australian managers have danced with psychologists. And Australia has produced several eminent dancing partners.

Julie Marshall and Richard Trahair published Industrial Psychology in Australia to 1950. 332 of the 1551 articles in the book are devoted to incentive schemes and profit-sharing. By comparison, there were only 169 articles on personnel management, industrial psychology (including counselling and mental health) and 88 articles on management training, education, management traits and attitudes.

In 1911, 13 articles appeared in The Argus and Australasian Manufacturer about profit-sharing and schemes which allow employees to become shareholders of companies. This interest culminated in a request in 1914 by the Liberal Workers’ Institute to ask the Minister for Home Affairs to provide statistics with a view to introducing such schemes in Australia. Profit-sharing, industrial co-partnership, industrial fatigue and the Taylor system of scientific management were the dominant subjects during the war. By 1917 the NSW Railway Commissioner was attacked publicly for criticising scientific management. After the war, discussion of interviewing, selecting and vocational training marked a shift towards the personnel function.

Bernard Muscio delivered a series of influential lectures at the University of Sydney on occupational selection, scientific management and work fatigue. In 1920 he published Lectures in Industrial Administration, in which he argued that industrial psychology should concentrate on the study of ‘mental’ factors and the selection of workers to achieve the best results from work. In 1924 there was light relief when an American ‘characterologist’ lectured on his method of employee selection, claiming that he studied character from the proportionate developments of the brain, face and body from which he predicted occupational success.

The most famous Australian in the history of management, (George) Elton Mayo, emphasised the social and emotional factors which influence workplace behaviour. In 1929, he was appointed professor of industrial research at the Harvard School of Business Administration and through the Department of Industrial Research there, participated in the Hawthorne studies at Western Electric’s Chicago plant. He enjoyed an academic career of almost thirty years and was widely honoured in his native land at the time of his death.

In 1927 the NSW Chamber of Manufactures established the Australian Institute of Industrial Psychology, which actively promoted psychological research. H. Tasman Lovell published papers on the ‘psychology of salesmanship’ and at the University of Sydney, A.H. Martin, arguably the father of Australian personnel management, taught courses in industrial psychology to managers. In 1931 the Australian Institute of Industrial Psychology published his Three Lectures in Industrial Psychology. After wittily dismissing such pseudosciences as astrology, palmistry, physiognomy, phrenology and graphology, he enthusiastically supported the development of vocational tests in industry. In discussing the desirable qualities for successful salesmen, he emphasised dress and deportment, voice, general aptitude and intelligence, personality qualities – extraversion, humour, resilience, diplomacy and self-confidence.

After the Second World War psychologists promoted themselves vigorously. In 1949 the director of the Australian Institute of Industrial Psychology published an article in Rydges called ‘Psychology – Management’s Ally’, which focused on selection and vocational guidance. R.J. Chambers described the first Australian management diploma course offered by the Industrial Management Department of the Sydney Technical College. To the surprise of many, the course included subjects in general and social psychology.³

Also in 1949 Tom Pauling co-authored an influential article for Public Administration about personnel management in the NSW Public Service which argued for the increasing importance of the personnel manager.⁴ A one-time Australian rugby international, Pauling became one of Sydney’s best-known personnel managers at Bradmill and Philips where he pioneered, with psychologist Evan Davies, the use of personality tests in industry. I had the good fortune to study industrial psychology with Evan Davies at the University of NSW and worked with Tom Pauling at Philips in the late 1960s. On presenting me with a copy of Herzberg’s best-seller, Pauling noted that ‘he got it half-right’. Typically, he did not tell me which half was right.

By the 1940s, surveys revealed that fifty-five percent of firms had personnel departments. Personnel developed a more professional character with the development of tertiary training in personnel administration and the establishment of professional associations, such as the Institute of Industrial Management (later the Australian Institute of Management) and the Institute of Personnel Management (Australia).

After 1950 a trend in industrial psychology made significant inroads into Australian management through personnel departments. Crusaders of this trend were the ‘human relations’ experts who built their case for psychology on the American Hawthorne experiments. They argued for social motivators and against economic motivators. Although the majority of managers had assumed that money was the greatest incentive for employees, American psychologists insisted that employees needed other, less tangible rewards. Because of the confusion generated by the debate about motivation and the role of money as an incentive, researchers increased their efforts to understand the relationship between job satisfaction and performance. They concluded that satisfaction with one’s job is not necessarily related to performance and job performance may be only peripherally related to personal goals. We don’t know what the majority of managers thought about this debate since there are no major studies of Australian business managers before the 1960s.

Sociologist Sol Encel, in Equality and Authority, reported a survey from 1960 of 100 senior managers which portrayed them as lacking in community leadership, political knowledge, aspirations and achievements. He acknowledged politician and author Michael Baume, who described business (in 1964) as the most poorly serviced vocation in Australia, made up from the leftovers of other professions. Australia’s prosperity, he argued, depends on good luck rather than on any inspired managerial activity. Business directors are created out of the remnants after medicine, law, science and engineering have taken the better intellects. A worrying feature of Australian managers was their anti-intellectualism and hostility towards tertiary education. Even today one hears echoes of Henry Ford’s boorish attitude towards education (history is bunk), as managers rationalise their intellectual inferiority complexes with displays of bravado when confronted by articulate and erudite colleagues. Many Australian managers simply lack confidence in their ability to converse intelligently with others; retreating behind a facile pragmatism which sneers at education and promotes dubious forms of training based on the learning of routine skills or jejune models of ‘managerial style’.

In the early years of Australian management, neither training nor education was required. Unlike members of the traditional professions, managers could scarcely believe their good fortunes when they secured well-paid jobs without formal education. Prior to the 1970s when management schools opened their doors, Australian managers were notoriously practical folk who were wary of, if not antagonistic towards, intellectual pursuits. They defended practice against theory, experience against intellect and training against education. This anti-intellectualism, which is characteristic of Australian life generally, is unsurprising given the difficulty in agreeing on a curriculum for management studies. People who have justified their occupational existence (and high salaries) on their ability to survive a succession of bureaucratic jobs are unlikely to agree on a management curriculum. Indeed, one of the more tedious assertions of Australian managers over the years has been their insistence that they achieved success without formal education.

The days of uneducated managers were numbered, however. Late in 1969 the Commonwealth Government commissioned an ‘Inquiry into Postgraduate Education for Management’. The report of that inquiry, known as the Cyert Report, was completed in four weeks and tabled in March 1970. The members of the Committee of Inquiry were American academics who recommended the creation of a ‘school of excellence’ in postgraduate management education at the University of NSW, thus upsetting the Melbourne business establishment. A second (Ralph) Committee of Inquiry into management education was commissioned in 1980 and Melbourne got its ‘school of excellence’.

By 1970, five Australian universities offered MBA-type programs – Adelaide, Macquarie, Melbourne, Monash and New South Wales. After a slow start, the programs eventually numbered among the economic success stories of tertiary education. Some academics, however, expressed grave doubts and considerable disquiet about the existence of management schools in universities. They were concerned that management schools would be unable to maintain academic standards since new courses had to be invented and old ones modified for business consumption. This was forced upon management teachers by the demands of pragmatic, ill-educated managers, increasingly illiterate students and the urgent need to establish lines of professional demarcation. The fact that academics could not agree on the status of management added to the confusion: is it a science, an art, or a practice?

As management is an interdisciplinary subject its academic founders took the liberal position that its study should include ‘hard’ subjects, like statistics and ‘soft’ subjects, like psychology. These were supplemented with functional courses in finance, marketing and logistics. Of special importance were ‘people’ courses, which have travelled under many names – organisational behaviour, industrial/organisational/ managerial psychology – and since the 1980s, human resource management. The ‘people’ courses directed attention to the personalities, motives and values of managers.

In the late 1960s Geert Hofstede, in Culture’s Consequences, studied the values of 116,000 IBM employees in forty countries. He found Australians to be strongly individualistic, masculine, with low levels of anxiety (uncertainty avoidance). Strong individualism means that: the involvement of individuals with their organisations is calculative rather than moralistic; organisations are not expected to look after their employees for life; organisations have only a moderate influence on members’ well-being; employees are expected to defend their own interests rather than allow management to represent them; and policies and practices allow for individual initiative rather than emphasising loyalty to employers. Strong masculinity means that: organisational interests are a legitimate reason for interfering with people’s private lives; fewer females are in the more qualified jobs; females in the more qualified jobs are very assertive; higher job stress; and more industrial conflict.

Hofstede’s results indicated that Australians adopt a self-interested attitude about work, are easy-going in their attitudes towards work rules, but give little support to reforms that would require more involvement by employees in decision-making. In short, Australians are generally willing to allow managers to exercise authority in return for economic security.

In their 1974 book, The Australian Manager, Byrt and Masters describe the ideal manager as a person who formulates and implements strategy, makes decisions, organises people and carries out professional, technical or operative work. They insist that management is not a profession, in the way in which the law and medicine are professions and argue that Australian managers do not form a political class. They describe Australian (middle) managers as:

Dependent on government; insular; lacking in boldness and initiative; dependent on overseas sources for capital, ideas and techniques; reasonably but not highly educated; masculine in fact and outlook; city-dwellers, in particular of either Sydney or Melbourne; conservative; fearful of radicalism in economics and politics; egalitarian both socially and at the work place; practical and pragmatic; opportunists rather than planners; non-intellectual and some are anti-intellectual; interested in leisure, social activity and family; critical of politicians and the holders of formal authority; versatile; materialist; non-aggressive; manipulative in managerial style; and low in Machiavellian characteristics.⁵

In the second (1982) edition of their book, these descriptions do not appear and no explanation is offered. Clearly, their descriptions of local managers in the first edition were not flattering and did not correspond to the ‘ideal’ manager found in American management books.

In 1996 I asked more than 1000 managers to rate themselves as a group according to Byrt’s and Masters’ descriptions. They agreed with them on all counts: the impressionistic ratings of managers by two academics from the University of Melbourne in the early 1970s were almost identical to managers’ ratings more than twenty years later.

In the mid-1970s, an American named G.W. England compared Australian managers with their counterparts in the U.S., India, South Korea and Japan. In The Manager and His Values, England argues that personal value systems of managers do not change rapidly, even during periods of significant social change. The Australian managers in his study were humanistic and placed a low value on conflict, profit, growth, competition, risk, success, achievement and leadership. Overall, the Australians revealed a strong degree of humanistic idealism and, therefore, a relatively low degree of pragmatism in their decision-making. England asks whether it is possible to combine (Australian) humanism, with its emphasis on tolerance, security and getting on with each other, with (American) values based on high achievement, competence, profit maximisation and organisational efficiency. We might conclude that it is difficult. American managers valued organisational efficiency whereas Australians valued employee welfare and humane bureaucracy. England argues that Australians’ attitudes towards tolerance, compassion, trust, loyalty, honour, employee and social welfare suggest that they are more embracing of organisational egalitarianism than American managers who vehemently reject the idea.

George Renwick wrote a report for Esso Eastern Inc. on differences between Australians and Americans.⁶ He begins by pointing to the similarities: the two countries are frontier societies founded by immigrants from the British Isles whose origins are Anglo-Celtic and whose social values are individualistic and democratic. Both peoples are sociable, informal, forthright, practical, inventive, and non, or even anti-intellectual. Relationships between them should, therefore, be mutually satisfying. But they are not. Confusion and conflict often arise. After trying to work together, Americans often feel that Australians are cynical and undisciplined. Australians, for their part, feel that Americans are superficial and pretentious. Where Americans have friends, Australians have mates. Australians respect and share loyalty to friends and expect deeper commitments than do Americans who place a high value on merely being friendly. Australians believe strongly that one supports one’s mate no matter what. Americans are more conscious of sticking to their job and getting through their work. Americans need to be liked but laconic Australians do not tell them that they are liked. Wanting to be respected, Americans do things that they think will impress others and expect a favourable response. But it is very difficult to impress Australians, who are impatient with attempts to gain their favour. In conversation, Australians are cynical, especially when they correct American enthusiasm. Australians, especially men, believe that words should be used sparingly, or not at all. If they have to speak, they speak without expression to indicate that the subject is hardly worth talking about, except to ‘get a rise’ out of others. And so Australians use hundreds of colourful terms to convey a tone of amiable contempt. Critical of excessive ambition, boastfulness and pretentiousness, they resent any attempt to ‘pull rank’. Accordingly, Americans see them as crude and critical. When asked about a person’s performance or the quality of a product, Australians say, ‘she’ll be right’. When given orders from an American, their response is passive resistance. Americans believe that Australians consider work to be a nuisance and do as little of it as slowly as they can. Australians believe that work is a national joke and people who work hard are likely to attract suspicion. Americans believe that they can do anything if they work hard enough; Australians believe they can do anything but, unless it is an emergency, it isn’t worth the effort.

In 1980 I published the results of a study comparing Australian managers’ views on industrial relations over a period of twenty-three years.⁷ In the mid-1950s, Kenneth Walker investigated managers’ and trade unionists’ attitudes to the sources of industrial conflict in Australia. Both groups tended to emphasise legal and economic factors. The later research showed that although economic issues remained important, the emphasis had shifted to psychological factors. Managers were inclined to attribute industrial conflict to greed, lack of cooperation and poor team spirit among their employees; union officials blamed the autocratic, selfish and uncooperative behaviour of managers. These findings points to the increasing ‘psychologising’ of workplace behaviour and the tendency to include personality as explanations of work performance. In this way conflict at work is attributed to particular personalities, or personality disorders, rather than to the relationships in which behaviour is embedded. The tendency to psychologise industrial conflict was strongest among senior managers and reflected a prevailing view that anyone with ability who is willing to work hard can get into senior management and that the difference between the highest and lowest incomes in Australia is neither excessive nor unfair. This view implies that those at the top fought a hard battle to get there and are qualified to tell those below what to do, and the system is fair because everyone has an equal chance to engage in the battle. Historically, Australian managers have used this argument to justify resistance to any dilution of their rights or prerogatives. Implicit in this ideology is approval of and support for the existing pattern of power relationships. In Walker’s study the main factors making for industrial conflict were legal, economic and, in principle, changeable. However, as industrial problems are attributed to the personalities of managers, it becomes more difficult to take constructive steps toward solution. This produces two possible reactions. On the one hand, it gives weight to the radical argument that only extensive social change can reduce the level of conflict between managers and others. On the other hand, it encourages those with a more conservative bent to accept the status quo and emphasise the personalities involved in management relationships.

In The Seven Cultures of Capitalism, Charles Hampden-Turner and Fons Trompenaars studied managerial values from more than fifty countries. They found that Americans are the most strongly committed to Protestant Ethic values – universalism, analysis, individualism, inner-directedness and achievement. Managers from the historically Protestant countries – U.K., U.S., (British) Canada, (Northern) Germany, Holland, New Zealand and Australia – endorsed these values to a much greater degree than did managers from the Catholic countries of Western Europe and Asia. Like Americans, Australian managers are strongly committed to universalism, analysis, individualism, inner-directedness; but unlike Americans, Australians suffer certain doubts about the relative importance of achieved status. Americans are more likely than managers from other countries to believe that winning is what counts. But if winning is everything, nothing else matters. In Australia, however, other things do matter: how one copes with success matters.

I had the pleasure of working in Germany with Fons Trompenaars on a course for senior Western European managers. We asked them to nominate the dominant management model (or metaphor) for several countries. There was almost unanimous agreement that the dominant management models were: U.S. – the football team; England – the class system; Germany – the machine; Asia – the family; and Australia – the barbecue.

It is clear that studies of Australian management values over a period of nearly fifty years reveal a surprising consistency in their conclusions. Australian managers endorse a form of home-grown humanism which tries to harmonise work performance with quality of life generally. England’s study is important since it is the first to emphasise Australian managers’ commitment to an ideology of humanism. The study from Hampden-Turner and Trompenaars is important because it suggests that, while Australian managers are similar to Americans in their support for broadly-based Protestant values, their humanism acts as a brake on their commitment to performance.

The 1990s were not good years for the reputation of Australian managers. The OECD in its 1992 World Competitiveness Report rated Australian managers as ‘ineffectual’, ranking them nineteenth out of twenty-two member countries. The Leadership Report undertaken by Monash University found Australian managers to be egalitarian, responsive, forthright, but indecisive and risk averse. Then along came the Karpin Report, which was three years in the making and a waste of $6 million of taxpayers’ money. Formally known as the Industry Task Force on Leadership and Management Skills, it was established in 1992 and advertised as the most comprehensive study of Australian managers ever undertaken. That it was, but it was also dominated by management consultants, confused definitions, inadequate methodologies and management jargon. And it offered no new ideas.

In February 1995 the report of the Task Force appeared under the politically correct title of Enterprising Nation: Renewing Australia’s Managers to Meet the Challenges of the Asia-Pacific Century – and was predictably critical of Australian managers and management education. The main conclusion was that Australian managers are hard-working, flexible, technically sound, egalitarian, open, genuine, honest and ethical. But they are also poor at team work and empowerment, unable to cope with change and lacking in people skills. The egalitarian nature of Australian managers was considered a weakness because it had an adverse effect on decision-making and resulted in managers’ reluctance to confront subordinates with issues of poor performance. The authors concluded that while the best Australian managers are the equal of the best in the world, there are very few of them. Furthermore, Australian managers are perceived internationally as considerably inferior to Japanese, American, British and German managers. Even among their colleagues, Australian managers were judged to be well below acceptable international standards.

Releasing Enterprising Nation to the public in April 1995, David Karpin suggested that Australians need to revere their business leaders. He made the familiar pleas for more women in management, best-practice management – Australians should be more like American managers – and more and better training and education. But the bad news was that there were no ‘world-class management schools’ in Australia. We need management schools that employ around 110 academics and our little schools are well below that number. Therefore, we are not world-class schools.

Newspaper headlines were predictable: ‘Australians: No Brains for Business’ (Australian Financial Review); ‘Report Slams Managers’ (Courier Mail ); and ‘Schools Not up to World Standard’ (The Australian). With a few exceptions, Australian journalists delighted in reporting our faults to the world.

Writing in the Sydney Morning Herald, Gerard Henderson thought it appropriate that the Karpin Report was launched on the day after Anzac Day: another Aussie failure. He concluded that there was not much enterprise in the Karpin Report and pointed to its bland observations. He acknowledged that the authors asked important questions but their recommendations were pedestrian and bureaucratic. The Report abounds with clichés and tautologies:

‘All enterprises are experiencing change as we move towards the twenty-first century’. Well, fancy that. Finally, the authors’ indulgence in simplistic theory is embarrassing. For example, we are supposed to believe that we are moving from old to new ‘paradigms of management’. Once upon a time managers were consumed by ‘vicious circles’ but now they are blessed with ‘virtuous circles’. ‘The essential problem with Enterprising Nation is that it bagged Australian managers without defining precisely whom it had in mind…As a short, middle-aged Anglo-Celt, I keep my weighty volumes to stand on as required.⁸

Fred Emery thought that the Karpin Report was a ‘deeply disappointing blockbuster’. He criticised the authors for assuming that management is a newly emergent science. Management is not and never will be a science, yet the authors assumed that there is an emerging body of empirically-grounded knowledge that is worthy of the title ‘management sciences’ which are applicable to anything called management. More importantly, Emery wondered why the authors of the Report did not ask whether changes in the workforce towards self-managing groups eliminate the need for the supervisors who are included in the authors’ definition of ‘manager’. They assumed that supervisors can be retrained as leaders, mentors and coaches. This is assumed in the face of one fact, which they probably did not know, that in the 1950s the movement to retrain supervisors in human relations was a dismal failure; and in the face of another fact, which they certainly did know, that human resource people do not know how to train the much better-schooled managers to be leaders, mentors and coaches.

The analysis of the task-force reveals that Australian management is faced with more of the same old challenges; the recommendations add up to more of the same old solutions. Although the Report lists a depressingly long series of complaints about the state and insularity of Australian management education, it can do no more than recommend higher salaries for professors, forming one really big national school of management and capping the lot with a national body to certify management education and “continue the work of the task force”. Heaven forbid.⁹

If it is true that Australian managers are criticised for being insufficiently American, it does not follow that they should replace Australian humanism (which defines truth as correspondence with the facts) with American pragmatism (which defines truth as what works). If truth is what works for different groups, the dominant group’s ‘truth’ will quickly become the received wisdom until a stronger group replaces it with another version of what works.