Mismanagement, “Jumpers,” and Morality

Covertly Concealed Managerial Ignorance and Immoral Careerism in Industrial Organizations

Reuven Shapira

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351795777
• Edition: 1
• Topic: Business
• Subtopic: Management
• Index: Business

Executives' morality and ethics became major research topics following recent business scandals, but the research missed a major explanation of executives' immorality: career advancement by "jumping" between firms that causes ignorance of job-pertinent tacit local knowledge, tempting "jumpers" to covertly conceal this ignorance. Generating distrust and ignorance cycles and mismanagement, this choice bars performance-based career advancement and encourages immoral careerism, advancing by immoral subterfuges. Such careerism is a known managerial malady, but explaining its emergence proved challenging as managerial ignorance is covertly concealed as a dark secret on organizations' dark side by conspiracies of silence.

Managerially educated and experienced, Dr. Shapira achieved a breakthrough by a 5-year semi-native anthropological study of five "jumper"-managed automatic processing plants and their parent firms. This book untangles common ignorance and immoral careerism, concealed as dark secrets by executives who "rode" on the successes of mid-level "jumpers" who high-morally risked their authority and power by admitting ignorance and trustfully learned local tacit knowledge. The opposite choice tendencies accorded power, authority, and status rankings, which made practicing immorality easier the higher one's position, suggesting that the common "jumping" between managerial careers nurtures immoral executives similar to those exposed in the recent business scandals.

1 Practicing Covertly Concealed Managerial Ignorance

This is a study of immoral mismanagement by intelligent, educated, and experienced but mostly job-ignorant managers and executives, who advanced careers by “jumping” between organizations. The books teach that effective management requires managers to learn and know a lot, hence much research and countless writings have been devoted to the study of organizational knowledge and management learning. However, one crucial question was missed: Which practices do managers use when they are promoted and face inevitable ignorance of job-essential local know-how and phronesis (Greek for practical wisdom; Flyvbjerg 2001), which some subordinates know well due to specialized education and/or practicing jobs and learning in communities of practitioners (Orr 1996)? In order to learn from the knowledgeable it is necessary to admit one’s own ignorance, but such admission is problematic, degrading one’s managerial authority. Ethnographer Blau (1955) found that senior professionals in a US enforcement agency defended their professional authority by consulting only with juniors rather than with senior peers when facing the need for more knowledge to cope with especially problematic tasks, avoiding exposure of their ignorance to the latter, who decided one’s professional authority in the department. Ignorance exposure is even harder for an executive: Intel CEO Grove (1996: 144) hesitated much before admitting his ignorance of computer programming to Intel’s programmers when he wanted to learn their job secrets prior to leading a corporate transformation that required such know-how.

Many executives avoid such admissions, using their power to conceal and/or camouflage their ignorance by means of bluffs, abuses, double talk, shirking problematic tasks, and other subterfuges, scapegoating others for resulting own mistakes and failures and concealing these immoral deeds as dark secrets, i.e., their very existence is secret, veiled on organizations’ dark side by conspiracies of silence.¹ Only few studied managerial ignorance, but these few found it common.² Studies of managerial effectiveness concur: Ineffective managers advanced careers more than effective ones (Luthans 1988); among Gallup-studied 80,000 managers only a few were effective (Buckingham and Coffman 1999), as found by others as well.³ Many ethnographers, from Collins et al. (1946) to Mehri (2005), uncovered managerial ignorance of employees’ know-how and phronesis as admitted corporate CEOs,⁴ while an executive at a large US industrial corporation explained executives’ incompetence thus:

“In the 1960s we thought we were really terrific. We petted ourselves on the back a lot because every decision was so successful. Then came the recession, and we couldn’t do anything to stop it… . it became clear that we don’t know the first thing about how to make this enterprise work”

(Kanter 1993[1977]: 53).

However, neither Kanter nor other ethnographers studied executives’ handling of their own ignorance (Roberts 2012). Ethnographers’ findings concerning managers’ bluffs, power abuses, scapegoating, and other such subterfuges, suggest that by these immoral means they defended authority and jobs, concealing mistakes, ignorance, and incompetence.⁵ However, managers’ morality was not grasped as a personal strategic choice (e.g., Mintzberg 1987) that affected ignorance handling, and the finding that managers used immoral means was rarely related to covertly concealed managerial ignorance (CCMI for short). Such means are kept as a dark secret, seemingly explaining how the research missed CCMI as a common strategic personal choice. Also stupidity research missed CCMI and explained mismanagement just by psychological dysfunction (Sternberg 2002), although ignorance escorts promotion: one takes charge of at least some unfamiliar units/functions, lacking their “[p]ractical wisdom … [which is] emerging developmentally within an unceasing flow of activities, in which practitioners are inextricably immersed” (Shotter and Tsoukas 2014b: 377). However, her/his authority and power enable avoidance of immersion and, as cited, many found that managers often use immoral means to veil CCMI and resulting incompetence because

“… it is not the generalized knowledge of science that is required in prudently leading people and handling human affairs, but a special sensitivity to the unique contours of the circumstances in which leaders happen to operate each time”

(Shotter and Tsoukas 2014a: 240).

A review of managerial stupidity studies concurs: “academic and practical intelligence are not highly correlated,” managers develop practical intelligence (phronesis) by sharpening their abilities, while simultaneously increasing and narrowing them (Wagner 2002: 60). “Phronesis [is] knowing what to do and how to do it, at the right time and with the right people, with the right mix of persuasion and challenge and the right sense of what to leave unsaid and undone… . the crucial knowledge … is knowing which facts and theories matter, when to use which skills, and who should perform actions” (Schweigert 2007: 339–340). Phronesis develops by learning local tacit know-how through ignorance-exposing authority-risking vulnerable immersion in practitioners’ deliberations that engenders trust, knowledge sharing, and problem-solving.⁶ Managers’ mistakes, failures, and incompetence are explicable by CCMI through using immoral means which are kept dark secrets, veiled on organizations’ dark side, and by employees’ avoidance of sharing knowledge with distrusted managers who use immoral means, secrecy, and information and knowledge as control means.⁷

Managerial morality and ethics became a major research topic after Enron, Worldcom, and other such scandals,⁸ but research missed the possibility that executives’ amorality stemmed from opting for CCMI that led to immoral careerism (hereafter Im-C) because CCMI barred moral career advancement through performance. According to Arendt (1963) the common vice of mass society that promoted Eichmann to a high Nazi position from which he organized the industrialized extermination of millions of Jews and others, was Im-C. Dalton’s (1959: 152–157) mid-levelers asserted that their bosses advanced by immoral, non-performance means and many authors, from Riesman (1950) to Wilson (2011), found that managerial Im-C was all too common.⁹ However, the etiological connection between Im-C, CCMI, incompetence, and mismanagement, were missed probably because mostly managers were not aware of their own ignorance (Kruger and Dunning 1999) and because they used status, authority, and power to conceal their ignorance as a dark secret.

This begs major unanswered questions: Was CCMI largely missed as a dark secret that explains the common vice of Im-C? Does managerial career advancement by “jumping” between firms (Downs 1966) as is common these days¹⁰ encourage CCMI and Im-C that result in mismanagement? Do mid-levelers further mismanagement by emulating a “jumper” boss’s CCMI and Im-C or does contrary choice by some of them amend her/his mismanagement and help its continuity?¹¹ Does such an ignorant boss advance career by “riding” on mid-levelers’ successes, which encourages her/his CCMI and Im-C? Do prospects of career advancement by the auspices of patrons rather than by performance encourage CCMI and Im-C? To what degree are the two encouraged by contextual factors such as an oligarchic field in which sponsored mobility is dominant?¹²

It is not incidental that organizational anthropologists rarely studied executives (Welker et al. 2011), heeding the advice given by sages of old: “Don’t judge others until you have stood in their shoes.” They faced a major barrier: they could not be executives and “stand in their shoes”; their participant observations as workers did not uncover higher-ups’ dark secrets. For example, Mehri (2005: 199), an engineer at Toyota’s R&D department, found that its new manager was “incompetent and spineless” and that the previous manager put “his puppet in [his] place so he [could] keep pulling the strings from another department,” but untangled nothing about higher-ups’ role in the fiasco, for instance whether they disengaged it to conceal their own ignorance of the expertise required of this “puppet” to manage effectively.

Semi-Native Longitudinal Anthropology Exposed Executives’ Dark Secrets

In order to untangle the dark secrets of executives’ and managers’ ignorance concealment anthropologists must become insider-outsiders (Gioia et al. 2010) among them, while in order to assess their expertise levels (Flyvbjerg 2001: 10–16) and how these impacted behaviors such as CCMI an ethnographer needs managerial education, referred expertise, i.e., expertise in other action domains that facilitates the learning of local practices, their language, and interactional expertise—that is, expertise that does not make one a full expert but enables fruitful communication with experts.¹³ This enables fruitful interviewing of the executives, subordinate managers, employees, ex-employees free to criticize higher-ups, and trade experts to untangle executives’ personal strategies and functioning. Then an anthropologist “enters executives’ shoes” and explain them as if s/he is one of them who witness their dark secrets such as bluffs, power abuses, and other subterfuges that conceal ignorance, incompetence, and a lack of experience-based learning (Morgan 2015). Lengthy fieldwork is also required in order to gain full trust, openness, and managers’ genuine rapport unattainable by a temporary employee, the organizational anthropologist’s usual status. Moreover, when managers practice CCMI, secrecy prevails since even speaking of one’s knowledge may have negative effects by generating pressure to reveal knowledge, which superiors can use against one’s interests (Mehri 2005). Hence, an anthropologist may need years to become trusted enough to gain access to local secrets.

I overcame these barriers by a unique semi-native longitudinal anthropology: A native anthropologist studies his/her own people and being too close to them s/he may adopt their particularistic views (Narayan 1993), while outsider ethnographers often miss locals’ sincere views and/or other decisive insiders’ knowledge (Gioia et al. 2013: 19). I have avoided both by studying five cotton gin plants and their parent inter-kibbutz regional cooperatives (hereafter I-KRCs), each owned by dozens of kibbutzim and managed by their members called pe’ilim (singular: pa’il), which emulated Israeli capitalist firm managers. Like them I was a kibbutz member, had a similar managerial education, and had experienced management at my kibbutz’s automatic processing plant that its problems resembled those of plants studied; unlike other ethnographers I knew some managers long before the study and the high-moral kibbutz context that socialized them.¹⁴ I approached pe’ilim as their peer and interviews often turned into openly discussed common problems, and I gained access to their documents. I entered the field to explain its culture like other anthropologists, without choosing a research design in advance. I aimed at thick description (Geertz 1973) based on variegated data collected while participating in local life and sensing subjects’ feelings, building much mutual trust with informants and achieving openness so that full, reliable, accurate, and sincere information led to my analysis.¹⁵

However, the present book utilizes much more extensive knowledge of mismanagement, since after studying gin plants for five years I studied it in other inter-kibbutz organizations (hereafter I-KOs) and in kibbutzim, as will be explained below. However, I use the analytic strategy of developing case description (Yin 1988: 107) to ground my theory.

The Main Theory

Ample literature has been devoted to educating executives by management science theories and findings, but Shotter and Tsoukas (2014a: 240) suggest that something else is required:

“… it is not the generalized knowledge of science that is required in prudently leading people… but a special sensitivity to the unique contours of the circumstances … an ability to be guided … by contingent sensing as each new step brings us into new circumstances, where pre-established rules or recipes cannot … apply.”

However, executives who conceal ignorance to maintain an authoritative image may not try to acquire “a special sensitivity to the unique contours of the circumstances” and “an ability to be guided … by contingent sensing … [of] new circumstances” since in order to be motivated for such learning one must know why “pre-established rules or recipes cannot, in principle, apply” to these circumstances and be aware of the...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Foreword
• Acknowledgements
• Glossary
• Preface
• 1 Practicing Covertly Concealed Managerial Ignorance
• 2 The Dark Secret of Immoral Careerism of “Jumper” Rotational CCMI-User Executives
• 3 The Concepts of Trust, Leadership, Culture, and Democratic Management
• 4 Effective, Innovative Northern Gin Versus Four Mostly Mismanaged Plants
• 5 Other Negative Processes of Low-Trust “Jumping” Cultures that Furthered Mismanagement
• 6 Contextualizing Gin Plants’ Mismanagement in the Kibbutz and Israeli Fields
• 7 Conclusions, Discussion, and Plausible Solutions
• Index