Sunday, August 5, 2012

The Academy of Management: Studying those who manage you

This week the Academy of Management has its annual meetings in Boston. The Academy of Management is a professional association for scholars who do research and teaching on management and organizations. It has more than 19,000 members, mostly professors but also others with an interest in management research. I will be there.

What do management scholars do, and why should there be an association for them? Maybe we can begin by asking whether management is an important occupation. Taking US data, simply because they are so easy to find, the Bureau of Labor Statistics reports that 6.183 million people are in management occupations in the US (267,000 of them are chief executives) of a total of 128 million persons employed. That comes to 328 managers per management scholar, which may seem like a lot of scholars per research subject! But a more relevant figure is that 4.8 percent of all employed individuals are managers. Those are just the professional managers, because it omits owner-managers who manage their own business. Still, it is only a small part of the picture. Management is important because it affects those who are managed as well as the managers, and as I just noted there are 128 million people employed in the US. That’s a more reasonable 6,734 per researcher, but the Academy of Management is an international association and its scholars seek to understand management all over the world.

What do managers do that might be interesting to study? At the smallest level, managers set the conditions and climate for individual work. For good or for bad, they have a big impact on well-being at work, personal and professional development, and teamwork. Remarkably, one of four persons in the US report having missed work as a result of work-related stress. It seems important to investigate how managers affect workers, and how workers affect each other. 

Moving to larger outcomes, managers are in charge of organizational units that function either for the regular production of the organization or for its future development, and though they rely on others for advice, they are often left with the final decision. Decisions matter. We just got news that the iPhone was nearly stopped during development because it seemed flawed beyond hope (yes, if you have one, pull it out of your pocket and look at the nearly-canceled product). That was a story that ended well, but many other close calls have gone the wrong way, leaving managers ruing missed opportunities. In some cases, incorrect decisions have had consequences that can be measured in lost lives, as when managers in charge the upkeep of safety standards have been slack. Managers also design organizational structures and procedures, and these can make a major difference to the effectiveness and quality of organizational work. The improvements gained by many organizations (not all!) through quality and six-sigma programs testify to the importance of organizational design.

At the broadest level, managers work together to form and execute strategies for their firms. Finnish company Nokia rocketed to prominence through its early and successful entry into the mobile phone market; it has fallen hard as a result of being slow to commit to the newer generation of smart phones. As is often the case with strategic decisions, it is a lot easier to point to a mistake afterwards than beforehand; it was by no means clear when and how the smart phone market would develop. 

Strategies in turn determine the viability of the firm and the livelihoods of many who depend on it, either in the firm itself or in the many other firms that depend on it, or its employees, for their business. I just clicked on a web site listing foreclosures in Detroit, center of the US auto industry, and I found 6,880 listings including 3-bedroom house going for $15,850 ($11 per square foot). I can think of no better illustration of what strategic decisions gone wrong can do for a community that is heavily dependent on a few firms. Going to the other end, the many successes in Silicon Valley has led prosperity in its communities, with a similar house as the Detroit one going for $567 per square foot. For that price, let’s hope the Silicon Valley house has been maintained well. And more importantly, let us make sure that the research done by the 19,000 management professors can provide some help for firm strategies, organizational structures, management decisions, and workplace conditions around the world.

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