Business: It's the manager, stupid
It’s the manager, stupid
Aug 6th 1998 | NEW YORK From The Economist print edition
IT IS an article of faith among management gurus that good management is largely the preserve of “great” or “excellent” companies that are marked out by their unique corporate cultures (and often by the fact that they have sought the advice of the guru in question). Now doubt has been cast on the idea of great companies by an enormous statistical survey that takes in hundreds of different units and more than 100,000 employees at 24 large companies over a period of 25 years. The conclusion of Gallup, the opinion-polling company that undertook the analysis: individual managers are what matter, not companies.
| |
| |
|[pic] |
Gallup’s research is based on the performance of the different units and surveys of how contented their employees were. One finding was clear, if unsurprising: the units where employees were the happiest were often the most successful. But evidence of a pervading culture was more mixed. Only 40% of workers in the average work group in the chart’s company 1, a restaurant chain, were happy; yet the company included some of the happiest and most successful workgroups in the survey; meanwhile company 2, a financial-services firm with a high average level of satisfaction, nevertheless had lousy units full of dissatisfied workers.
Gallup will not reveal all of its clients, but its survey included giants such as Best Buy, a consumer-electronics retailer, Columbia Healthcare and Carlson, a large marketing group. The findings are subject to a couple of doubts. Perhaps some company-wide decisions in firms of this size—for instance to cut costs by 10%—hurt managers at some units more than others. And it is not surprising that the study found that individual managers matter, because it measured employee satisfaction in terms of things that are controlled by individual managers, such as clear performance targets, the availability of proper equipment for a job, the presence of competent colleagues, and the attention of a caring supervisor.
Even so, the study raises the question why good practices do not spread in the best firms. Jeffrey Pfeffer, a professor at Stanford Graduate School of Business, argues that managers often fear that borrowing ideas from their colleagues will boost the latter’s status, at their own expense. He cites the way in which the methods of General Motors’ Saturn division have failed to spread around the firm. Only a few companies are like ABB Asea Brown Boveri, which publishes tables comparing the performance of their different production groups.
At this point the argument begins to look a little circular: surely the best way to breed good managers is to promote a strong culture? Indeed, the figures that Gallup has released raise almost as many questions as they answer. More answers, including what makes a good manager, will be revealed when Gallup publishes a book on its research next year. But the “excellent company” has taken a hit.
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.