Rebalancing Management and Administration: Some Philosophical Conundrums

Management (including administration) is the process of doing things (including getting things done). Without management and administration, orderly and directed development of organizations and societies would be difficult. Over the last several decades, however, management has become more identified with organizational or business development while administration has become identified with economic or social development. Management has also become a major instrument of competitiveness while administration has become an instrument of governance. The issue that has emerged is whether management in its quest for growth and development has become a driver of profligate use of resources while administration in its twin focus on growth and equity has got stuck between the two.

As the same limited space is being exploited by different practitioners and theoreticians, increasingly greater separation is being sought to be made, like technical being different from management and administration, or technical operations being different from technology management, and so on. The proliferation of such segmented thought processes has led to relentless efforts to maximize parts without realizing that the whole is being sub-optimized. With challenges of federal structures in administration and global structures in management there is a need to recapture the fundamental purpose of all management and administration. The key purpose of all management and administration needs to be development (not necessarily growth) with equity (not necessarily with equality). This blog post falls back on one of the most fundamental branches of study - philosophy - to restore the perspectives.

Philosophy  

Philosophy is the study of fundamental aspects of knowledge and practice, abstraction and reality, and perception and existence. The objective of philosophy as a branch of study is to vest one with wisdom. Enquiry and logic as well as hypothesis and validation form the bedrocks of the study of philosophy in any field. While the Western philosophical thought owes much to Plato, Aristotle and Socrates, many others added to subsequent philosophical streams. In contrast, Hindu, Buddhist, Jain and other oriental philosophical streams had an even more hoary past. The Hindu Vedic Upanishads are considered the earliest exponents of philosophy in the world. Indian philosophy in general brings significant analytical rigour to metaphysical issues and enquires about the existential reality through the nature and function of human psyche. The ultimate purpose of Hindu philosophy is the attainment of moksha or nirvana (salvation).

Modern philosophy builds on the fundamentals of ancient philosophical wisdom with a contemporary tweak. Indian leaders and philosophers, Sarvepalli Radhakrishnan, Sri Aurobindo, Mahatma Gandhi, Madan Mohan Malaviya, Bala Gangadhar Tilak, Rabindranath Tagore, Ambedkar, and Jiddu Krishnamurti, to name a few, sought to superimpose contemporary social imperatives on fundamental philosophical premises to generate new developmental ethos. It is a matter of regret that business and economics have not had philosophers who brought to bear such contemporary tweaks in organizational systems. These disciplines have produced leaders driven for execution or academicians focussed on strategizing. Only Mahatma Gandhi brought in valuable social and economic philosophical underpinnings to business. The world would be a better place if professionals dedicated to management and administration begin to apply principles of philosophy to what these disciplines aim to achieve.  

Logic

Logic is the foundation of philosophy. The logic for business, or ‘business logic’ as is commonly phrased, is pursued by professionals. Some interpret it as improving quality of life and some as providing more value for money. Almost universally, businesses desire to be in perpetual growth mode; more products, more customers, more revenues, more profits, and more market capitalization. All things that are synthetic, that is all manmade goods, come from natural resources. Everyone knows that natural resources are not unlimited. Today’s oil, gas, mineral and metal resources are built up over several centuries but are being consumed to finish over just a few decades. Logic, therefore, says that industrial progress as we see today (newer and varied products in larger quantities) is going to stutter and stop one day. While the principles of conservation are invoked time to time, the fundamental drive to convert natural resources to synthetic products has not stopped.

The only living activity that is self-sufficient is organic agriculture that is rooted in the soil, nourished by rains and nurtured by seasons. Even if all the modern day products (from tractors to fertilizers and from processing to packaging) disappear, agriculture would survive as the sole economic activity that would help the human race survive. Management and administration are not adequately recognizing the very primal role of agriculture in human life and are not doing enough to ensure a virtuous agricultural ecosystem. Logic would require that there should be more institutes of rural management and there should be more aspirants for diplomas in agricultural management offered by the IIMs. Unfortunately, the contrary seems to be true. Logic requires that ‘ruralization’ should have greater priority over urbanization and agriculture must continue to be the dominant national culture.

Rationality

Equally unfortunately, however, not all logic can be followed, especially when one has to contend with a legacy of what fruits of development, as commonly understood, bring to population. With development, what has not been necessary becomes absolutely commonplace and what has been an option becomes fundamentally necessary. Development surprises and intoxicates people with surprisingly newer and richer products. A television three decades ago cost no more than Rs 10,000 but today advertisements galore for televisions that cost more than Rs 500,000. Development is modern day economic marijuana; like the cannabis has its medical uses, development has its economic uses but the primary risk of intoxication and addiction will never cease. However logical it may be from a philosophical angle to moderate profligacy masquerading as development, the appeal of development can neither be wished away nor rebelled against.

Rationality offers a solution when logic is stymied by legacy. Rationality requires conserving as much as consuming. As a seemingly bizarre but actually rational example, rationality may require that all mineral water and soft beverage plants must be located only at river mouths which see loss of millions of cusecs of water every day, especially in rainy seasons. The mineral water park must have its own aqua reservoir filled in with water which would have otherwise gone waste to the sea. Another way to look at conservation could be that soft beverages must be made only with desalinated water; if people have an aversion to drink desalinated beverages, so be it - as the result would only be conservation of water. Another example of rationality could be that any large scale electronics firm should set up its own electronic waste recycling facility along with the main plant. There will no longer be any naturally aspirated engine but only turbocharged intercooled engine, as another example.

Hypothesis

One bedrock of philosophy is hypothesis. Without hypothesis there can be no discussion, without discussion there can be no debate, without debate there can be no inclusivity and without inclusivity there can be no progress. It is important that managers and administrators proceed based on intelligent hypothesis. While there is a strong element of intuition in successful management and leadership, intuition is not impulse; intuition also works on hypothesis. For a rendering on intuition see the author’s earlier blog post, “Educated and Experienced versus Instinctive and Intuitive”, Strategy Musings, May 10, 2015 (http://cbrao2008.blogspot.com/2015/05/educated-and-experienced-versus.html). Philosophy as a branch of study focuses as much on gaining knowledge through prior art as on building knowledge through forward looking hypothesis.

Managers and administrators feel that they are rational if they are planners. Planning, however, is not hypothesising. Development of hypotheses is a more subtle form of thinking about and feeling for other persons (stakeholders, for example) and other events (competition, for example). Every route that is taken up as part of a planning process must have a solid hypothesis. If the government believes that fiscal incentives are necessary to innovate in India, there must be an underlying hypothesis on investor behaviour and expectations (and not on GDP growth rate, per se). Hypothesis is not the equivalent of assumption; the latter being another superficial component of the planning process. A view on ‘action-reaction’ (quantitative easing leading to reversal of recession, for example) is not hypothesis either. In this case, the hypothesis is probably one of restoring people’s faith in an economic future.

Validation

The fourth pillar of philosophy is validation. Science is built on experimental validation. Management and administration have a lower scope for validation because they deal with people and require rather irreversible commitments. Validation usually occurs in managerial and administrative spheres by past results or by pilot projects for future. If hypothesis construction is perceptively carried out based on past results validation has a lesser role to play. However, when major initiatives are undertaken validation of hypotheses through pilot projects is well merited. Validation is fundamental in all technical areas and equipment as well as process related aspects but is a challenge when people and culture related aspects are involved. Progressive validation is a useful way to ensure execution perfection and also improve the quality of hypothesis itself.

When definite public good is involved through breakthrough concepts, it makes sense to ensure maximum coverage in a risk proof manner. A highly fuel efficient car deserves a universal hypothesis with little validation. A solar powered car may require progressive development of concept through progressive validation. Philosophical approach to business and administration requires that resources are conserved by not throwing them into arena without validation. Whether a Singapore type of capital is viable in Andhra Pradesh may have answers in how the Gachi Bowli development in Hyderabad has taken wings. The hypothesis that development skyrockets land prices, and escalating land prices benefit owners is a hypothesis, for example, that can be validated with the examples of New Raipur and such other developmental regions.

Wisdom

The life of a philosopher is lonely and controversial. In a world that seeks speed, a philosopher’s approach of logic, rationality, hypothesis and validation could be seen as time consuming. A philosopher has, many a time, few followers and many critics. Even a saint-philosopher as great as Sri Ramanuja had to face opposition.  Business and administration which seek conformity of thought are not the natural habitats for philosophy. Yet, these are the very domains which could benefit from application of philosophical principles. Corporations and public bodies which have departments and officers for compliance must also institutionalize cells and sentinels for philosophical enquiry and objectivity. A judicious amalgamation of philosophy in an organizational ecosystem leads to balanced economic and social development, rooted in wisdom. 

Posted by Dr CB Rao on May 24, 2015