Management is both an art as well as a science. There is a body of theory regarding management beginning with F.W Taylor who thought scientific management can be introduced into industry through Time and Motion study. He would go round the factories with a stop watch observing how much time it would take for an operation to be completed by a worker or group of workers and record it. But management cannot be reduced to such a mechanical exercise.

Management Science- what is it?

Another trend that emerged in USA was to use modern mathematical techniques to deal with decision making problems faced by managers. It is called ‘Management Science’ and is largely derived from military strategy perfected in the universities and think tanks; the new economic theory of the Firm (Business Economics) and the engineering of business processes. Game theory and Mathematical Programming including statistical stochastic processes came to be included in the term "Management Science."

For example ‘Waiting Lines’ problems and how o reduce them at an effective cost was solved by Queuing theory. It was found necessary to have spare capacity to deal with peak loads and the time taken to dispose of them. New techniques for Project Management called PERT and Critical Path Analysis were developed to minimize time and resources used in a project to achieve project objectives.

But despite the contributions made by modern ‘Management Science’ to improve decision-making by management in an uncertain world, management is still an art rather than a science.

Human dimension in management is important

The human dimension in management is all important and has an important role in the making of a successful manager. The Japanese have shown how to mobilize the enthusiasm of the workers through co-operation and giving them a sense of importance and treating seriously their suggestions to improve production. ‘Just in time’ production to minimize distribution and inventory costs is a direct contribution by the Japanese to modern management theory.

Less frequently management theory has taken ideas from the field of psychology and some of them have had considerable influence in the practice of management. The idea that there are two distinct styles of management- the authoritarian style and the participative style- Theory X and Theory Y , developed by Douglas McGregor in his famous book "The Human Side of enterprise" has continued to be important.

The new Behavioral Economics has shown that the Neo-classical assumption of rationality has to be modified to explain some obvious scenarios confronted by economists where choices under the rationality assumption are at variance with empirical results. These scenarios have been encountered in Game Theory. Today managers realize that not only is there change but rapid change and how to forecast them and adapt to them is the buzzword.

Ethical Leadership an Issue

The spate of corporate scandals in USA & UK has thrown up the need to re-examine the concept of ‘leadership’. Should it have a moral dimension or be purely utilitarian and only concerned with achieving the objectives or targets of the firm by hook or by crook? The US government and public have insisted on punishing the miscreants of corporate scandals and several famous names have fallen and some languish in jail. But sad to say our own corporate scene shows that even a Supreme Court judgment of culpability allows directors to carry on regardless. Jesus Christ taught that the leader must serve the interests of his followers and stooped to wash the feet of his apostles to portray this attitude.

Criticism of MBA

Business degrees have become popular in many countries. But there has been much criticism of the Master of Business Administration (MBA) programs. The Carnegie Foundation called the subject business administration as "a vague, shifting rather formless subject". Others say the courses are too academic and do not teach enough practical skills. Some say they fail to teach their students the right things. Prof Mintzberg a professor at Canada’s McGill University says they offer `‘specialized training in the functions of business not general education in the practice of management". Their students are too young and inexperienced to learn the skills of management in the workplace, which can be acquired only in the workplace rather than the classroom".

Mintzberg says "Conventional MBA programs train the wrong people in the wrong way with the wrong consequences." He points out that America’s list of most admired business leaders like Warren Buffet, Jack Welch, Bill Gates, Michael Dell and Oprah Winfrey contains not a single MBA and that despite a growing proportion of Chief Executives at least in the USA having MBAs.

The approach of the European Business Schools has been different from that of American Universities. They rely less on the academic case study method of teaching practiced in the Harvard Business School and instead try to solve the problems of the companies that fund them. Even among American companies, American business schools, particularly Harvard, have on more than one occasion been criticized for turning out MBAs long on case work but short on practical business experience. Harvard has since introduced more functional programs.

I wonder how our own Business Administration courses would fare in the context of such criticism. I understand that our Business Administration and Management courses are very popular among undergraduates. The practice of obtaining a degree in management was not in vogue among our present generation of chief executives. The late D.S Jayasundera of Hayleys, Sohli Captain or the two successful Jafferjee brothers- Mohsin and T.I. did not have the MBAs.   

Valuing book knowledge more than hands-on experience

This tendency to value book knowledge over experience is evident throughout our corporate and public sector. When an institution looks for persons to fill a top job, they are not clear what to look for. They stress only the educational qualifications but not the relevant experience. So we find lawyers in charge of Regulatory Agencies in the government who know nothing about the field they are expected to regulate. Marketing or trading skills or even management skills cannot be developed by merely reading books. Carpentry skills or bricklaying cannot be taught in a course nor tested through a written examination. They require practical experience which can be acquired mostly on the job. But   we find Chairmen or Chief Executives who have no experience at all of the field or subject of their businesses. It is on the job experience that provides managers with the insights that are valuable in management or in regulation. Look around see how many of our top officials have hands on practical experience. No wonder they make such costly blunders.

One is reminded of Shadwell’s play "The Virtuoso". Sir Nicholas Gimcrack, the "Virtuoso," is discovered lying upon a laboratory table where he is learning to swim by imitating the motions of a frog in a bowl of water. When asked whether he had practiced swimming in water, he replies that he hates the water and would never go near it. "I content myself," he said, "with the speculative part of swimming; I care not for the practical. I seldom bring anything to use’...This seems to be the approach in our universities too. Our universities are no different from the Virtuoso. Management or trading skills or any skill for that matter cannot be taught in a course.

Creativity and competition through innovation

  Most of the best European universities have no tradition of formal business management education. How do our own products fare? Some years ago I read some comments by the Head of the Postgraduate Institute of Management, Dr Gunapala Nanayakkara, regarding the quality of our top managers. He thought they were below par although they draw fat salaries. He said "Sri Lankan managers are not capable enough; I will go further and say they are even below the third world average." In a competitive rapidly changing world, top managers   have to be innovative. And entrepreneurship should be the buzzwords.

Are there rules to promote creativity or is it a matter of genetics. In a globalized environment top managers have to be innovators and competition will have to be through innovation. What I notice is that our corporate sector is dominated by conformists rather than non-conformists. They do not value experience so much as qualifications. Qualifications only indicate the potential and not the actual. Our small enterprises need managers who know the basic rules of running a business. Are they taught this in our universities? Their products are keen and intelligent but lack an understanding of the functioning of a small business.  They know little about banking or insurance. They lack mundane business knowledge.