The Hindu Business Line : Why managers need history

The ways of managing must be subject to constant evolution and can be rewarding if one constantly tried to experiment and learn. To do this requires a sense of what has worked in the past, and what has not - and some idea as to why.

People who choose to ignore history, it is said, are condemned to repeat it. This age-old warning is treated with the disdain usually reserved for old wives' tales, by the majority of managers who generally recoil from a historical approach to business and its problems. To them, business is all about action now and immediate results. Understanding the past is for the poets, as it were! Of course, it is important to stay fully focussed on the present. This does not mean, however, that one can take the historical experience as irrelevant. The reason is something of a paradox: despite all our claims to be living in a rapidly changing environment, the fundamental nature of the real-life managerial problems has not changed a great deal. The size and dimensions especially technical and financial have, but not in other respects. This is worth mulling over.

Could it be that in many things concerning the human being and society, and working together in harmony, we really haven't worked out any new solutions, and have not learnt any new lessons? Perhaps this underlines a fact, often noted by the philosophically inclined, that our progress as a race has been far more on the material and scientific planes, and not in wisdom. For wisdom and smarter ways of working with people would have led to more harmonious ways of living in large communities such as organisations.

Why history

Managing relationships, balancing costs and benefits, associates, employee morale and customers (of course, often forgotten in an inwardly looking business) have always been the core of the daily job of the manager. They are also parts of the reasons why some managers do on the whole better than others; and why some organisations fade away, or barely survive where others flourish and thrive.

There is yet another reason for granting history more respect than we have done so far. Managing, contrary to what may seem to the casual observer of the literature on the subject, is not a science. It is more like an artisan's craft, a mixture of practices, knowledge skills and traditions. Success in the field as in any other is also largely a matter of pure chance. It is a matter of being in the right marketplace at the right time, or sheer serendipity. Why some products, people, processes or technologies succeeded in one milieu while they failed badly in another is thus always an intriguing research question, and one that continues to engage the best of minds. If we but followed what we try to teach children, which is not to make the same mistake knowingly again, then we should all be better off. Meanwhile, consultants come up with prescriptions all the time - and so do some more rigorous analysts with a numerical approach - but the common objective is to find that elixir of life, the magic formula that would ensure continued survival and growth in a frantically competitive, information-overloaded, world.

The ways of managing must therefore be subject to constant evolution and can be rewarding if one constantly tried to experiment and learn. To do this requires a sense of what has worked in the past, and what has not - and some idea as to why. One man who exemplified this quest life-long, was Alfred Chandler at Harvard Business School who changed the very orientation of the Business History course at MBA level. He called it The Coming of Managerial Capitalism. This was not just a change in title. In this he defined the scope and meaning of history for the manager. We had moved a big step up from the founder-entrepreneur's stage in the history of organisations. Evolution and growth in size has changed firms to a setting where the work of several senior managers working in unison creates not just wealth for the owners but value for all. The multidivisional, multi-location firm had become the new device by the middle of the 20th century in the US and the rest of the world merely followed this. Even the Japanese, and other Asian countries, which went down a very non-American path where managing styles were concerned, were no exception.

Alfred Chandler, the Harvard scholar in Business History who died in May this year, full of years and wisdom, was one who re-wrote the concerns and changed the nature of the debate in the subject. His junior colleagues such as Professors Tedlow and McCraw would go so far as to say he single-handedly created a new school of historical analysis of business as it actually worked: what organisations did, what managers did and how the structures and the strategies of business actually meshed or did not. He was neither interested in moralising about capitalism and the robber barons (for example) or theorising about the economics of the decision making processes within the firm. Earlier economic historians were merely interested in testing their economic theories as they applied to firms. On the other hand Chandler chose to concentrate on the work of the top management and the interaction of the organisation and its environment. It is this kind of history that we sadly lack in our country - and desperately need.

For the economy in transition

Until recently such research would have been dismissed in India as a needless luxury and an academic extravagance. Today it is evident to any casual observer that the industrial landscape is changing dramatically. New groups, new industries, and new overseas market opportunities are coming up who were undreamt of fifteen years ago. New business models, and a totally fresh, hybrid approach to managing (which is neither the post-colonial box-wallah nor traditionally Indian) may well develop soon. We need, in this new context, all the help we can in understanding why some firms succeed and why some don't under our peculiar transitional conditions, in a multi-layered and emerging economy that has few parallels in the world. Yet, barring the efforts of scholars like Professor Tripathy and more recently SL Rao, very little has been published on the links between the institutions of business, the ownership structure and the management styles. There have been notable memoirs and biographies (Dr. Kurien, PL Tandon, T Thomas, AN Haksar, to mention a few) but few works that go beyond chronology and eulogy. Comprehensive business cases (as distinct from problem-centred ones) have been few; and the main claim to fame for many distinguished organisations have been that a foreign university has written about them. This effort has to be given a big boost, which means time, funding and scholarship.

What we need therefore is not just heroic tales, coffee table volumes that the Chairman's son proudly gifts to visitors - valid and true though they may be - but some form of synthesis and serious consolidation of experience that helps the professional in making the transition from a largely competition-free economy to one of free-for-all competition. As a first step, company boards and CEOs should encourage serious archiving of material and recording the major events as factually as possible for posterity. A sense of continuity and history is a unique asset.

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