Q1 Spring 2007

Can we make management a profession?

Dialogs

Management

Can we make management a profession?

Joel M. Podolny and Rakesh Khurana
"When you make a decision, you make it with full knowledge and understanding of the consequences. It's not that there's not uncertainty... but when you make a decision on behalf of the shareholder, you’re aware of the consequences for the employees." - Joel M. Podolny

"It's easy to have a convenient framework and just pick the one that serves one's purposes for the moment. But what business schools need to do is create an opportunity for a deeper, more complete understanding." - Rakesh Khurana

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Venture capitalists seed companies that are not yet a gleam in the public market's eye. Their investments can sprout and transform industries. Anne Glover '78, a past chairman of the British Venture Capital Association, says a professional association helps the industry self-police.

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The chief professional?

John C. Bogle, Nell Minow, Austin Ligon ‘80, E.V. “Rick” Goings, and Jeffrey A. Sonnenfeld
With their power, their prominence, and their pay packages, CEOs are cynosures in the business universe. Could the structures of a management profession take in these corporate chiefs? Or should CEOs of publicly traded companies be treated as members of a separate profession, with its own rules and responsibilities?

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For most of the twentieth century, accountants were organized into a self-governing profession, but that structure has been shaken over the last decade by a wave of scandals. Yale SOM professors Rick Antle and Shyam Sunder discuss the implications for management of accounting’s successes and failures as a profession.

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What principle would you propose for inclusion in a code of conduct for managers?

Andrea Nagy, John Choi, Pete Susi, Bruce DelMonico, Josh Fried, and Other SOM Students, Faculty, and Staff
Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Stanford Graduate School of Business and a leading critic of business education, arguing that business schools frequently fall short of other professional schools.

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Who were the managers?

Richard L. Burger and John W. Chaffee
While technologies and social structures change through the ages, the basic need for efficient and skillful management of resources and organizations is a constant. An archaeologist and a historian describe how past societies have met the challenge of training effective and accountable managers.

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What does it mean to be a manager today?

Radha Kuppalli '06, Chris Wolf '83, Ned Sullivan '82, and Tom Ascheim '90
Ideas become actions when they're pressed into service in a particular context. So are ideals tempered by real experience. We wondered how the idea of management as a profession (and the ideal of management as a profession) would play out at the level of daily life.

So, we sought out a group of graduates of the school. They've all gone to a management school and are managers by that definition at least, but they practice their craft (or profession) in different industries, locales, and roles. Each provides one view on the many-faceted world of management.

First we asked the participants to chronicle a day out of their work lives, breaking the overarching issue of what constitutes management down to a manageable but still rich unit of analysis. Then we set them loose to discuss the notion of management as a profession.

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Essays

Could the market do more to improve ethical performance than professionalization? Professor Jim Baron proposes that voluntary certification of various facets of corporate responsibility could create a market for good behavior.

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Charley Ellis suggests that, in order to become true professionals, managers will have to become "servant-leaders."

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Should managers be trained to follow mechanistic organizational rules or to make decisions based on holistic understanding of the situations they face? Peter Bearman describes an often overlooked aspect of professionalism-discretion-and what it means for management.

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Vignettes

How can managers integrate their values into business decisions? Trish Karter '82 talks about the decision to keep her company's headquarters in inner-city Boston, and how it grew from her sense of self.

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Would a management profession be more diverse?

John Rice and Fred Smagorinsky ‘87
According to John Rice and Fred Smagorinsky '87, management is competing with traditional professions like law and medicine for talented minority students—and losing. Rice and Smagorinsky are trying to change that.

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When hedge fund Long-Term Capital Management plummeted toward bankruptcy in September 1998, its potential dissolution threatened the financial markets with disaster. Herb Allison, then the president of Merrill Lynch, was one of the few people in a position to avert a crash landing, but first he had to get a cranky coalition of competitive bankers and traders lined up behind his bailout plan.

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Recent comments from the Q1 community

Comment from Can we make management a profession?

NPR’s Weekend Edition Sunday covered the question of what responsibility business school’s bear for training many of those who led us into the current economic conditions. Much of the story revolves around how much of a profession, guided by shared norms and ethics, management should be.

Posted by Qn Editorial Staff
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Comment from Can we make management a profession?

Successful leadership qualifies a manager. It is a post appointment qualification, as the job of a manager is to make decisions keeping future (unknown) in view. Pre-appointment a manager is chosen based on if that person,
--Is well qualified with a degree or
--Has displayed growth and leadership in the past or
--Has made a significant contribution to the company may be monetary.
In the first two cases the person has already taken an inherent qualification test. In the third case, it is "business".
Does this mean that a post appointment qualification test could be conducted? No. Because a CEO or a managers job is more to open up the communication lines between employees and make them open-minded and involve them in decision making. It is often the case in various companies that have fallen because of unethical business conduct, that there were a few employees that know the ethics but cannot communicate to the leaders. This means that there needs to be growth in the employees because of the transparency created by the manager and the manager needs to grow and set an example. Is there a pre-appointment certification...

Posted by Sunil
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Comment from The chief professional?

I would start out with the statement "whether or not management is a profession". Of course it is - we all went to Yale SOM to become part of it. Second statement, "We don't have certification to practice what we do." There is indeed a certification, Project Management Institute, which may not be what you are looking for in certifying a CEO. Granted. But it is best to be careful in broad statements. (Note: I have not pursued PMI certification, because I don't see its value other than a resme filler. But I know it is there.)

Is there a value to some sort of CEO cert process? Of course. Remember the "paradigm shift" from classes like that from Prof. Vroom? After that, listening on a long (calorie burning) walk to CDs of the "5 Temptations of a CEO". And any week reading the WSJ or the Economist, how many lessons are to be learned? "I didn't know" is not a valid excuse. Strong confidence is what makes entrepreneurs and CEOs great - but it needs to be balanced with the ethical concerns, the return to...

Posted by Katrina Wootton Campfield
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Comment from Can we make management a profession?

Mike, your idea advances the discussion, I think. If Management (meaning high level Management, not management of your neighborhood Arbees) is worthy of being a profession, it's worthy of more study. And you do separate high level managers from others. But how are you going to convince people to take more time away from their careers for school? Especialyy people who are just starting to reach their goals...

Posted by samantha
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Comment from Can we make management a profession?

Perhaps the management degree should be given in two phases. Students take a course of study much like the current MBA programs, which focuses on basic skills and understanding of the business world. Then they go out and work for at least five years as associates or consultants or whatever. Those that rise to significant management position, where they have to lead a number of people and make decisions that impact many interests beyond their own well being would then return for an additional year to complete the management degree. The second phase would teach not only skills but the responsibilities of the role. Plus, students would start the second phase with an understanding of what management really is. And the group would be very select, producing a master-class-like environment.

Posted by Mike Glass
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Comment from Can we make management a profession?

i think the main topic is, do what you think sure, felling the actions, see in the past, what happened, and make your decision, be professional requires inteligency and emotions personal, manager something can be possible when you know your limits, and sure, pass them.
to be a manager, one thing is necessery, trust not in your knoledge but, in the knoledge of the people who are working with you.value your employees' potential

Posted by Tonny Andre
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Comment from Can we make management a profession?

it's counterproductive to talk about putting new requirements and layers of inhibition on businesspeople. your well-intentioned plans will just end up reducing productivity, shrinking the pie and everyone's piece. let's get rid of bad regulation (why is it you never hear anyone say they just aren't regulated enough... but you do hear people complain about their professions?) trade barriers, punitive taxation, etc first, then see what people can make of their new world. freedom is powerful.

Posted by Heidi
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Comment from A company in good standing?

It seems to me that people might be motivated to participate in such a system of certification if a group of high-status leaders and companies were to commit to it first. As Baron implies, this would then create a pressure to comply in order to be seen as one of the leaders. So, how do we get the leaders to lead the way? Sit back and wait for their moral resolve and sense of responsibility to kick in? That could be a long wait... You could create some sort of financial incentive, but that seems problematic (as well as expensive). nonetheless, an appeal to self-interest might be the most powerful motivator. Perhaps one could find a way to make participation in ethical certification glamorous or otherwise ego-gratifying. I know that sounds a little silly, but imagine if a foundation gave glitzy awards based on compliance with a set of ethical standards, with celebrity hosts, or a glossy magazine profiled the responsible acts of top executives, rather than their habits of consumption. If ethics were beautiful, vanity would make people better citizens.

Posted by Hal1
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Comment from A company in good standing?

This is an intriguing idea. But it needs lots of refinement. It is easier to get companies to talk about where management is weak in hiring women or blacks or minorities. Getting companies to similarly admit that management slipped up on ethical criterion will be difficult, to put it mildly. But I do not want to shoot this idea down - it is worth thinking about in-depth to brainstorm how such measurement could be practically implemented.

Posted by Deep Verma
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Comment from Can we make management a profession?

I’m sympathetic to the argument Podolny and Khurana make, but I have some practical questions. For one, money is a very convenient measure of a manager’s performance. If we say that managers have a wider set of obligations, beyond profit/shareholder interest, how will we measure if they are adequately considering the needs of the employee, for instance? To improve management, we have to answer practical questions like that.

Posted by Hal1
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Comment from Can we make management a profession?

Management is critical to the success of any enterprise. Show me a well-managed business, and I will show you happy, engaged, and productive people enjoying what they do.

Personally, I take pride in thinking up ways to improve management. We spend more time in the office than any other place in our lives–at least some of us do. Shouldn't we therefore set up a work culture that is enjoyable, full of challenges, and rewarding? We have obligations to create value for our investors. How we do this depends on management. Can it be studied and learned? Absolutely. To think that the skills to run a diverse business enterprise with many strategic and human challenges can come out of thin air, without some academic and intellectual rigor, is folly. Management skills need to be part of the core curriculum of a business school.

Posted by Thomas E. Zacharias '79
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Comment from Can we make management a profession?

Can we make management a profession? No. Management goes beyond a profession. You can have a profession and be a manager. The skills, education, and experience of a manager complement and enrich the skills, education, and experience of any professional in any field. You can be a finance, accounting, or law professional, but that does not make you a manager. You can find managers without professional studies. Your management skills or background, including any studies you might have in management (such as an MBA program) can only make a professional (or a person) in any industry or field have a better of understanding of how a company or entity needs to be run and how its different areas and structures have to interact to make it one single entity going in the same–hopefully successful–direction.

What makes a good manager? In my opinion, it is 50% common sense; 40% experience, education, and skills; and 10% anything he or she might have learned in a professional (specialized) career. You can try to make managers, but it is very difficult to teach common sense to people.

Posted by José De Nigris '99
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Comment from Can we make management a profession?

As with all things, it depends on one's definition of and objectives for the "Management Professional" role. And this, without ignoring the debate differentiating Management from Leadership.

Having worked for decades in the investment banking world–which is, by all accounts, a most idiosyncratic culture –my initial response to management as a profession is "there's no experience like experience." Today's professionals are highly specialized and work in a rapidly changing regulatory environment with fast-paced advances in technology. The pressure for performance, creativity, and margin is intense. In this context, a widespread buy-in of the "professional manager" would require a high degree of her or his credibility and relevance. This would require meaningful exposure to the corporate trenches to gain insight into employees, their products/services, reporting lines, promotion dynamics, external competitors, perceived internal competitors, and so forth. Without in-depth corporate-cultural knowledge the role risks becoming nothing more than another layer of management.

In my view an area long overdue a revolution in terms of corporate influence, is human resource departments. The strengthening, development, and empowering of a highly sophisticated and engaged HR department may, in fact, be where the professional manager(s) should sit. At present too many HR units...

Posted by Jennifer Berg '83
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Comment from Can we make management a profession?

Having spent the better part of 15 years on this very question–first at the Ford Foundation and now at the Aspen Institute–I would say if we don't succeed at making management a profession, we lose the best leverage we have for tackling our most complex problems as a country and around the globe. Business is to the modern era what the Church was to the Middle Ages, only perhaps more so. It's not just about power. Business has the talent, the problem-solving skill, the global reach, and, increasingly, the motivation to think through the deep connections that exist between business success and social and environmental progress.

Unfortunately, the simplicity and seductiveness of the shareholder-primacy model means that managers in business courses are generally taught that the best–even the only–measure of a firm's success is profits and share price, in spite of how those profits are arrived at, or whether the business model is sustainable.

Professional education would require a wider lens. If the bottom line of management as a profession is the notion of service, then the manager needs to consider questions like, "Who am I in business to serve? Who is affected by the decisions...

Posted by Judith Samuelson '82
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Comment from Can we make management a profession?

Over the years, my life has taken lots of different turns, some planned and others by accident, but all dealing with management issues. Whether I am preparing a mergers and acquisitions proposal, being a member of a community civic board, or juggling the demands of being a parent, I have found that my ability to work with others all comes from my experience at SOM. The academic foundation I learned from faculty and the friendships I developed with classmates prepared me well for whatever path I chose or continue to choose. Skills learned in diagnosing problems, synthesizing information, and developing creative solutions are portable, whether they are utilized in public, private, or nonprofit management.

Posted by Lise Pfeiffer Chapman '81
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Comment from Can we make management a profession?

Professionals apply their recognized expertise in service of others, always placing their clients' interests ahead of their own. Management may not always be a profession but its richer form, leadership, needs to be. Indeed, to lead an organization, particularly one that provides essential services to a public with limited choices, is to perform a public trust. Fulfilling a public trust requires skill and selflessness, and both are the essence of what it means to be a professional.

Posted by Andrew Chapman '81
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Comment from Who were the managers?

What was asked in the chin-shih exam of the Sung period?

To compose one poem, one rhyme-prose, one policy essay
To answer five policy discussion questions
To answer ten “written elucidation” questions

Sample “written elucidation”:
Question: Confucius said of Tzu-ch’an that in him were to be found four virtues that belong to the Way of the gentleman, what are these virtues?
Answer: In his private conduct he was courteous, in serving his master he was punctilious, in providing for the needs of the people he gave them even more than their due; in exacting service from the people he was just. I answer this question with respect.

(from Thomas H.C. Lee, Government education and examinations in Sung China (Hong Kong: Chinese University Press, 1985)

Posted by Q1 Editorial Staff
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Comment from Who were the managers?

Interested in learning more about the Incan Empire or the Chinese Civil Service Examinations?

—Page through Guaman Poma’s manuscript online at http://www.kb.dk/permalink/2006/poma/info/en/frontpage.htm
—See what quipus look like and what we’re learning about them: http://khipukamayuq.fas.harvard.edu/
—Find out more about Professor Burger at http://www.yale.edu/archaeology/faculty/burger.html

—Read about Professor Chaffee and his book at http://www.binghamton.edu/history/faculty/chaffee.htm
—A museum dedicated to the history of the examinations opened near Shanghai in early 2006: http://www.shanghai.gov.cn/shanghai/node8059/City_news/userobject22ai20337.html

Posted by Q1 Editorial Staff
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Comment from Can we make management a profession?

Professional oaths, particularly the Hippocratic Oath, are mentioned throughout Q1. Read the traditional Hippocratic Oath, as well as modern interpretations at http://info.med.yale.edu/education/osa/milestones/commencement04/oath2.html.

Here

Posted by Q1 Editorial Staff
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Comment from Would a management profession be more diverse?

There is one substantive point I wanted to add: the professions of law and medicine are more centered around individual effort and performance and working at a small firm/practice is a common career path; this may be more attractive to many talented young minorities than a career in management and the vagaries of a career in larger organizations. At MLT we are working to address this by focusing on the combination of hard and soft skills that it takes to succeed in these environments.

Posted by Fred Smagorinsky
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Comment from Should business be personal?

In an excerpt from the interview that formed the basis for this piece, Trish Karter talks about how she hopes financial success and greater scale will advance her social goals.

Q: Can you separate your business decisions from your sense of Dancing Deer’s social responsibility?

We’ve certainly knitted the commercial objective together with where our hearts are and what we’re trying to do in the world. It’s not a perfect formula, by any means. But it’s become so much a part of us that it’s taken on a life of its own.

In fact, I think that we get too much credit for it. When people stop me on the street and say, “Dancing Deer is such a terrific company. I love your products. I love your philanthropy, and your creativity, and the way you treat your people, and how you interact with the community,” I’m just thinking that there’s something wrong with this picture, because when you break it all down, we don’t do that much. We just do stuff that’s obvious—commonsense, logical, economically sensitive, marketing-smart, people-smart decisions. To think we get singled out as an innovator and symbol of social responsibility is a sad commentary.

Posted by Q1 Editorial Staff
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Comment from What principle would you propose for inclusion in a code of conduct for managers?

Some additional responses to this question:

Evaluate the impact of your business on society and the environment, considering issues such as the availability of limited natural resources and the impact on communities that lack the political capital to fight for their interests.
—Eliza Eubank, Class of 2007; Joint degree candidate with the School of Forestry and Environmental Sciences


Ultimately even a proactive code of ethics must rely on the integrity of management professionals.
—Tom Kimberly, Class of 2008; Joint degree candidate with International Relations


Manage others in the way you would want to be managed.
—Edna Novak, Class of 2008

Posted by Q1 Editorial Staff
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