Ghoshals Train of Thought - Essay Example

?Surprises in JA1 This article demonstrates Ghoshal’s train of thought, which directs me to the management theories that business schools have taughtstudents over the years. I understood that the managers who graduate from business schools have been given the wrong education, which goes against many business ethics. Business schools seem to derive instruction from scientific theories, which then meet pessimistic ideologies that when implemented, turn into negative management practices. The article brought into scope two developments namely the pretense of knowledge and the ideology-based gloomy vision. These damaging theories have made students to believe that managers cannot be trusted. I also noticed that the theories suggest that strict supervision and control of employees is the optimal manner of operating a business. The article showed that academic research associated with business and management conduct, influences management negatively in that students relinquish their moral responsibility by learning its theories (Ghoshal, 2005). Surprises in JA2 This article demonstrated that the theories taught in universities and business schools are to blame for the managers’ poor performance. This is because the managers underutilise the available resources when they follow incorrect channels that lead to bad decisions as a result having of inadequate knowledge. Possession of relevant knowledge was emphasized in this article, where Donaldson implies that managers do not make bad decisions intentionally, but it is because of inadequate knowledge that these errors arise. “These errors are not intended by the managers, and are due to deficiencies in their knowledge” (Donaldson, 2002:97). A new thought was introduced when Donaldson wrote that social theories taught in business schools have had contradictions with the assumptions made in management education. “There is contradiction between the views expressed by some major contemporary social science theories taught in management schools and the assumptions on which management education is founded” (Donaldson, 2002:97). The way Donaldson proved the incompatibility of the economic and finance, strategy theory, agency theory, institutional theory, and judgmental bias theory was so convincing that I come to completely agreed with the article. The evidence In the article, Ghoshal argued that the negative management and conduct of business have been influenced by academic research learnt in business school by students who later become managers. I observed that the argument on assumptions and ideas that Ghoshal was talking about were indeed true. “Our theories and ideas have done much to strengthen the management practices that we are all now so loudly condemning” by “adoption of a particular theory and more at the incorporation”, which have “ ideologically inspired amoral theories” that are taught in business school(Ghoshal, 2005:76-76). The ideology of pessimism also known as liberalism brought a gloomy vision in management where the owners of a business do not trust the managers as it is evident in the many companies across the globe. Looking into Donaldson’s article and how he had argued, the five theories he had highlighted really contradicted optimal management of business and what students learnt in business schools. In economics and finance, when information is made public it cannot help one firm as all the other firms will have it and use it to their advantage. “Thus research-based knowledge, once public, confers no economic advantage in (even semi strong) efficient markets. Only knowledge that is kept private can confer an advantage to the investor” (Donaldson, 2002:96). This shows that the research done in business school once made public cannot give students an upper hand. In the theory of strategy, when a firm has unique resources, it cannot disclose them to the managers, as they can reveal them to rival firms. This in turn results to resources being underutilised; therefore, failing to realize the full potential of the firm. Comparison Introduction The role of education is to impart knowledge on people so that they can efficiently carry out various activities optimally. Education should also ensure that students and managers behave ethically. “In business, good ethics should be emphasized” through education but the opposite is happening in business schools (Schwab, 1996:499). In the recent past management practices employed by some companies have led various scholars to find out what really went wrong. Some have come to the conclusion that the ideologies rooted in the business school curricula are to blame for management malpractices. Analysis Donaldson and Ghoshal seem to have come to the same conclusion that theories taught in business schools are to blame for bad management practices employed by managers. “However, unless done in a discerning manner, the reliance upon social science theories to supply the knowledge taught in business and management schools can lead to problems” which have already been evident (Donaldson, 2002:97). They both have concluded that theories have changed into assumptions, which have brought about ideologies on how businesses should operate. “I argue that academic research related to the conduct of business and management has had some very significant and negative influences on the practice of management” and he proved that to be correct as he showed the theories of management fuelling many scandals in the business world (Ghoshal, 2005:76). Ghoshal even wrote that some people who did not attend business schools have been introduced to those ideas, since they have been legitimized (Ghoshal, 2005). Ghoshal addressed the ethical problem by stating that individuals should always be guided by their moral values to do the right thing but this is not the case with management, as they are guided by social theories. Business schools have “adopted the “scientific” approach of trying to discover patterns and laws, and have replaced all notions of human intentionality with a firm belief in causal determinism for explaining all aspects of corporate performance”, therefore, having a negative influence on the way managers act (Ghoshal, 2005:77). Agency theory was discussed by both Donaldson and Ghoshal and it reflects on lessons imparted to students, which imply that managers should not be trusted. This is because they work against maximizing the shareholders’ value and in order to stop this, the interests of the managers must be aligned with those of the shareholders. Donaldson argued “there is a tension between agency theory and the mission of management education. In particular, by publicizing managerial delinquency, agency theory may encourage these behaviors” (Donaldson, 2002:101). This shows that when students learn these theories, they later end up practicing them, which leads to bad management practices. Ghoshal indicated that the use of social theories made people also lose their common sense besides losing their ethics. “It is not only morality, however, that has been a victim of this endeavour of business academics to make management a science; common sense, too, has suffered a toll” (Ghoshal, 2005:79). This has resulted to behavioural change where managers act according to these theories. They both touched on the issue of strategy theory where a company finds the need to compete with their suppliers, employees, regulators and customers besides competing with other firms. Donaldson talked about giving the managers minimal information so as to prevent them from revealing the valuable resources to the competitors. Ghoshal accused business schools of adopting a scientific model approach when doing their research. Ghoshal referred to it as pretence of knowledge. This is characterised by treating ethics and morality as if they are exempt from human rationality and considering them as aspect of corporate performance that can be separated from human intentions. When liberalism and the pretence of knowledge combined, assumptions obtained were not sound as they had originated from resulted partial analysis, which results to truth claims (Ghoshal, 2005:77). Conclusion Business management in the recent years came to accept some widely known paradigms that should be rejected as they completely ignore the issue of morals and ethics. Unfortunately, these paradigms are taught in the business schools, therefore, producing managers who try to ignore morals and believe in some false assumptions. In order to bring about ethical leadership and management, the appropriate subjects should be taught in schools to help prepare students for these roles (Toole and Mayer, 2010:37). The only way of having such issues addressed is through the change of curriculum in the business schools, so that all the concerns are dealt with accordingly. References Donaldson, L. (2002) ‘Damned by our own theories: Contradictions between theories and management education.’ Academy of Management Learning & Education, vol. 1, no. 1, pp. 96–106. Ghoshal, S. (2005) ‘Bad Management Theories Are Destroying Good Management Practices’ Academy of Management Learning & Education, vol. 4, no. 1, pp. 75-91. Schwab, B. (1996) ‘A note on ethics and strategy: do good ethics always make for good business?’ Strategic Management Journal, vol. 17, no. 6, pp. 499-500. Toole, J. & Mayer, D. (2010) Good business: exercising effective and ethical leadership. New York: Routledge. Read More