Magazine article Management Today

Schooling Society

Magazine article Management Today

Schooling Society

Article excerpt

The London Business School is 25 years old this year, an anniversary which provides appropriate occasion for reflecting on changes in management and the educational environment 25 years after my appointment as the first member of the professional staff.

Support for the development of the School came from a number of far-sighted businessmen, who were led by its chairman, Lord Plowden; however, the general response from business was not encouraging. The business heroes of the period were broadly dismissive of education and development. Insofar as there was any enthusiasm, it was for some mass programme of remedial treatment for middle management. During the '70s, the London Business School grew larger and stronger, in proportion as management declined, reaching its nadir in 1976, as underlying industrial and commercial profitability in Britain slumped to zero. Many of the business heroes of the '60s and '70s failed to survive.

Where are we today? The management environment has changed dramatically in several respects. The technology of business has fostered the development of greater sophistication in communication and analysis. This process is irreversible and results in more demands being made of the successful practising manager than at any time in the past.

The international dimension of business was always recognized as important, and the deregulation of economies and markets on an international scale has increased the degree of competition between firms on a worldwide basis. But 25 years ago the internationalism of British industry and commerce was still related to the old concept of Empire rather than to the expanding economies of Europe, North America and the Pacific Basin. With notable exceptions in the area of non-traded goods an organization's strategy must now be placed in a world setting, making the distinction between domestic and overseas markets increasingly irrelevant.

Over 25 years, the development of financial engineering has meant a dramatic change in the nature of the market for corporate control. Current debates on this issue take in problems that may arise from a material substitution of debt for equity. They include allegations worldwide that financial institutions, their objectives and time scales are driving the real economic variables such as fixed capital investment. Managers, under pressure, protest against short-termism. These debates have raised the fundamental question of the accountability of corporate management, particularly to its shareholders. Management is expected to provide better evidence of its ability to create shareholder value than it has in the past. …

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