Strategy

by Lawrence Freedman

  Mary Parker Follett

  In some respects, it became far easier to push Taylorism in the Soviet Union, where resistance was crushed, than in the United States, where resistance remained active and labor unrest high. This led to a search for a business strategy that went beyond extracting greater efficiency out of the workforce but also addressed the broader “labor problem.” The management theorists of this time claimed a way forward to harmony through better management.

  Mary Parker Follett was as much a philosopher as a social scientist, with an impressive background in social work and education rather than business. She was following in the same line as Jane Addams, that of a “social feminist.” This built on a traditional woman’s role but broadened it to include “city housekeeping,” which suffered—according to Addams—because women, who understood such things, had not been properly consulted. Follett followed Addams into community work and progressive politics. Like Addams she challenged the popular dichotomies of the time, whether elite/mass or capital/labor, as imposing divisions instead of creating an integrated community. The crude elitist view that some were better than others seemed to her to be a recipe for disharmony and discord. In particular, she objected to the word masses and she challenged Le Bon’s corrupting “conception of people as a crowd,” susceptible to “the spread of similarities by suggestion and imitation.”

  Her aim was to find means of bringing the community together as an integrated whole.13 Follett objected to the idea of power (“the ability to make things happen”) when it was a domineering “power over.” Exercising power in this way left the dominated resentful and reluctant to change their prior positions, which would be reasserted as soon as an opportunity arose. Better to have “power with,” because all energies—not just those of elites—would then be mobilized in the same direction toward shared goals. This faith in humanity led her to view democracy in terms of the evolving views of individuals coming together in groups. There was so much going on within any group, with ideas interweaving, modifying, and reinforcing each other; returning in new forms; and focusing on shared problems. Crude assertions of interest would be undermined and prejudices challenged. The outcome would represent integration, her key goal. There would neither be individuals nor society but “only the group and the group-unit—the social individual.” In this context, consent should be positive and not grudging, a result of participation in decisions and a sense of shared responsibility and ownership. She was not after partnerships between previously antagonistic entities, such as negotiated agreements between management and unions, for these were inherently non-creative. The integrated outcomes she sought would be far more valuable. In this way (and following Dewey), democracy was a process as much as an attainment, informed by the interplay of individual interventions. Authority would come not from specific individuals but from “the law of the situation” which required all to accept and address the problem as framed. If anything, therefore, her approach was anti-strategic, creating situations which it would be difficult for individuals to manipulate.

  Although her views developed as she addressed the larger issues of democratic theory, her stress on the importance of group processes, and her determination to turn conflict into a creative rather than a destructive factor, led her naturally into the study of organizations. From 1926, she began to challenge business groups about the need to view their enterprises within the wider social context. She urged them to reassess their reliance on delegation and take advantage of the social bonds forged within groups,14 arguing the need for more bottom-up approaches to management and innovation. Follett now appears ahead of her time with her strictures against micromanagement (“bossiness”), in favor of flatter management structures and participatory approaches. She argued the importance of the more informal aspects of business organization, noting how social interactions contributed to overall performance. At the same time she did not challenge Taylorism directly, accepting the expanded role for management and the advantages of authority being vested in those with technical expertise and access to knowledge. This did not remove hierarchy, but at least it was not based on social position nor exercised arbitrarily. The problem went back to consent, and was reflected in her definition of management as “the art of getting things done through people.”15

  Follett was influential in her time more as a social philosopher than as a management theorist, although she did have practical experience in Boston on management-union relations and the development of personnel policies. Her mission can be discerned from the title of her 1918 book: The New State: Group Organization—The Solution of Popular Government. Here she observed, “Our political life is stagnating, capital and labor are virtually at war, the nations of Europe are at one another’s throats because we have not yet learned how to live together.”16 Her remedy, however, only worked when the conditions were already in place, when there was a prior willingness to work together on shared problems. Beyond that, there was little more than an injunction to put differences aside and think about power relations differently. The method required that people did not think strategically for themselves but only on behalf of the group. This did not of course mean that the integrated outcome would be wise or appropriate, noted much later in reference to “groupthink” when individuals reinforced each others’ wrong assumptions.17 Furthermore, as representatives of groups met with each other in a higher group, were they supposed to disregard the views of the lower group in pursuit of a higher integration? If each group was responding to the laws of its own situation, then at some point the variations in group situations would matter, and there would still be conflict to be resolved by hard bargaining or else a tough fight. Follett’s shrewd observations on group dynamics illustrated the organizational benefits of enlightened self-interest, but they provided no answer to the problems of conflict, the point at which strategy would be most needed.

  The Human Relations School

  Follett overlapped with another group of management theorists, with whom she is often associated and almost certainly influenced, the so-called human relations school. These other theorists had a harder edge to their philosophy and were more clearly part of the elitist school, although they also stressed the importance of social networks in making organizations work. A key figure here was Elton Mayo, an Australian who managed to get himself attached to Harvard Business School in 1926 and whose name has come to be linked to the first sociological studies of industrial practice at Western Electric’s Hawthorne plant near Chicago. Before considering how he got to Harvard and the Hawthorne studies, it is worth noting his general views.

  Mayo did not present himself as a fan of Western civilization, individualism, or democracy. In his view, democracy took advantage of voter emotions and irrationality, left little room for reason, encouraged class war, and favored “collective mediocrity” rather than the sovereignty of the “highest skill.” The idea of workplace democracy, which appealed to Follett, was anathema to Mayo, for it would hand over control to people who had no real understanding of business issues. His knowledge of psychological theory encouraged him in his belief that economics could not grasp the human factor because it ignored the extent to which feeling and irrationality shaped motives. It also suggested how to deal with conflict without addressing what were claimed to be the underlying issues. Radical movements and industrial unrest were not responses to genuine grievances but more the expression of the “hidden fires of mental uncontrol.” If agitators were essentially neurotic, “prone to conspiratorial delusions, with minds obsessed with rage and the savage lust of destruction,” then democratic processes could do little to help. In fact they made matters worse, dividing society into two hostile camps and leading workers, unaware of the real sources of their discontent, to pursue “will-o-the-wisp phantasies with all the energy of his starving intellect and will.” Mayo’s remedy was to treat not the material conditions of the working class but the psychopathological tendencies of democracy, reflected in disoriented lives, disintegrated
personalities, and disordered values.18

  Mayo’s views were well known when the dean of the Harvard Business School, Wallace Donham, approached him about joining the faculty. Donham was a banker who had trained at Harvard Law School. After being appointed in 1919, he stayed until the early 1940s. He saw his task as raising the academic standards of the school while also improving links with business. This was essential for fundraising, but Donham also had to contend with the university’s reputation for harboring radicals and socialists. Funding for Mayo eventually came directly from industry rather than the university. The attraction of Mayo lay in his underlying views, which Donham shared, and in his claimed expertise in psychology. The gap to be filled was explained in a letter to the university’s president in 1927: “I see no really promising hope of lessening the critical nature of the Labor Problem in Industry except through a scientific study of Industrial Physiology including Psychology.” As O’Connor observed, “Mayo’s research spoke directly to the core of executive concerns: it revolved around how to calm the worker’s irrational, agitation-prone mind and how to develop a curriculum to train managers and executives to do so.” In 1933, Mayo reinforced the point. The problem was not the lack of an “able administrative elite,” but the elite’s lack of understanding of the “biological and social facts involved in social organization and control.” Donham saw training this elite as an essential task for the business school.19

  Complementing the efficient physical engineering of the ordinary worker by Taylor, Mayo offered a psychological revival. Like Taylor, Mayo also had a story about how he realized this could be done, this time based on a flash of inspiration as he pondered the meaning of experiments with a small group of workers at Western Electric’s Hawthorne plant. The research, which had begun well before Mayo joined, was designed to see whether changes in physical conditions, such as better illumination, made much difference to productivity. In this regard, the most important stage in the experiments involved a group of six women working on relay assembly. The aim was to ascertain the impact of rest periods and hours of work. Eventually it was decided to consider them on a group rather than an individual, so that there was a shared bonus for higher productivity. The researchers found a 30 percent increase of productivity over two and a half years, along with greater work satisfaction.

  Explanations of exactly why this had happened were uncertain until, as Mayo reported, he had his “great éclaircissement” and realized what made the difference was that the researchers were actually showing interest in them. His large conclusion was that psychological conditions were more important than the physical and that workers responded to their own group dynamics and informal social networks. Motivations went beyond self-interest into seeking recognition and security. The recommendation was that management should seek a good working relationship with their staff, and that happy workers would be more productive. As with Taylor, the original story was embellished and interpreted within Mayo’s own preconceived notions. Once again a simple explanation was offered to make sense of a complex set of facts. In retrospect, the best explanation for the improvements in productivity was a combination of pay incentives (in a non-unionized plant and against the background of the depression) and the attitudes of individual workers. The replacement of two women who had not joined in the spirit of the experiment by two who did was a turning point.20 Mayo’s conclusion was not in itself preposterous. It fit in with the theories of Follett in encouraging managers to view their workers in more rounded, softer, human terms and was widely considered to have encouraged a turn for the better in management practice.

  In this way the so-called human relations school was founded, attending to the informal aspects of the organization and the social conditions of the workplace. Mayo’s place was assured in the history of industrial sociology, though were it not for the Hawthorne experiments he would by now be forgotten. He had exaggerated his own qualifications, including his psychiatric training, and was considered by colleagues to be snobbish, lazy, and uninterested in teaching, with only the occasional publication to his name. As we have seen, Mayo’s underlying philosophy was deeply conservative, seeing conflict as in effect a “social disease” to be remedied by healthy cooperation across the supposed divides.21 By the same token, cooperation among workers for their own ends was unhealthy. Because he saw politics as aggravating the problem, and was generally reluctant to consider the problem of power, any solution was the responsibility of the administrative elite, who must be trained to develop social competence to match their technical competence.

  In the Hawthorne Studies, the claimed positive response had been to inadvertently enlightened researchers rather than truly enlightened managers. In the mid-1930s, Mayo made acquaintance with Chester Barnard, president of New Jersey Bell, a cerebral man and a voracious reader with hard experience in industry and practical administration. By 1938 he was giving lectures at Harvard. With some rewriting, these were turned into what is now considered to be a seminal text on management thought, The Functions of the Executive. Barnard forged an extraordinary bond with the physiologist Lawrence Henderson, a leading figure in the university and a colleague of Mayo’s. This was based on their shared interest in the Italian sociologist and notable elitist Vilfredo Pareto.

  Having discovered Pareto in the mid-1920s, Henderson became something of an evangelist in the 1930s, establishing what became known as the “Pareto Circle” at Harvard. To Henderson’s scientific mind, Pareto’s notions of social equilibrium struck a chord as well as matched his own conservative inclinations. Although he dominated the circle, with a seminar technique that was said to be “only feebly imitated by a pile-driver,” the group did include people such as Talcott Parsons and George Homans among the most influential of their generation of sociologists.22 It was also a refuge for conservative academics seeking an alternative to Marx and attracted by the underlying treatment of society as an interdependent and largely self-correcting system. Henderson was impressed by Barnard as a man who not only had read Pareto originally in French but had sought to apply his ideas in the real world.

  Pareto’s influence can certainly be detected in Barnard. This was evident in his stress on nonlogical factors in human decision and action, on how choice was shaped by the logic of situations, and on the circulation of elites. Pareto is there in the idea of organizations as social systems analogous to human bodies seeking some sort of equilibrium. To achieve equilibrium, the organization needed to achieve both effectiveness and efficiency, and he emphasized how many declined because they failed both tests. By efficiency he meant the ability to satisfy the individuals who made up the organization; effectiveness involved the ability to meet goals. Management must formulate the organizational goals and decide how to meet them, but it must do so in a way that kept all members involved, not least through forms of direct and accessible communications. He emphasized the importance of respect and cooperation, suggesting—in line with Mayo—that the former was more important than material incentives and that the latter was put at risk by divisive ideologies and forms of political action. In both these aspects, the workforce was prone to mistaken notions about their interests and therein lay the special leadership role of management.23

  In addition to their technical and social skills, managers should work actively to create a cooperative organization underpinned by appropriate values. Otherwise the organization would fail.24 It was therefore important “to educate and to propagandize” people to “inculcate” appropriate motives and perceptions. The executive must not only conform to a moral code but also create moral codes for others which would be reflected in high morale. To this end, “points of view, fundamental attitudes, loyalties to the organization or cooperative system, and to the system of objective authority” must be inculcated to encourage the subordination of “individual interest and the minor dictates of personal codes to the good of the cooperative whole.”25

  Barnard also had a story to illustrate his point. In a popular lecture he re
ferred to an episode involving a riotous situation at New Jersey in 1935 when he was director of the New Jersey Emergency Relief Administration. He claimed that he defused the situation by respecting the dignity of the rioters.26 According to Barnard’s account, a meeting with representatives of Trenton’s unemployed in his office had to be adjourned when some two thousand unemployed demonstrators, who had been urged on by New York radicals, clashed with the police in the street outside, leading to a number being arrested and some taking a beating. Barnard saw that publicity such as this could harm the cause of the unemployed by increasing taxpayer animosity to the relief program. This was the point he made when the delegation returned, after he had first carefully listened to a litany of their grievances, and a degree of harmony was restored. According to Barnard’s account, picked up enthusiastically by his friends at Harvard, the problem was solved through human relations rather than by economics. Dignity was important to the unemployed, even more than food for themselves or their families.

  It may well be that Barnard’s sensitivity and tact did make a difference, but once his account was checked against contemporary reports of the episode it became evident that this was only part of the story.27 There was in fact a strong economic dimension: the unemployed were demanding a substantial increase in food allowances and Barnard had promised to help. Nonetheless, Barnard’s argument that more mayhem would put the whole program at risk was a serious political point. This reflects the observation made earlier about Follett’s promotion of group dynamics. There are groups within groups, and Barnard’s strategy in this case was to make common cause with the unemployed in support of the relief program against those who resented the subsidies when their own economic circumstances were so tight. Talking about groups rather than classes or parties or states did not remove the problem of conflict. Unless society could be reshaped as one big amorphous group, individuals were going to identify with some groups against others, and the interests of these groups were going to clash. The more inter-group conciliation became necessary, the more intra-group harmony was likely to be put under strain.