Have business gurus (and business schools) lost touch?

Some pillars of management theory are weakening.

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Interesting article in The Economist asserts that “business gurus have lost touch with the world they seek to rule” and that “management theory is ripe for a reformation, especially at Business schools — the cathedrals of capitalism.”

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More specifically, the author argues that: “Management theories are organized around four basic ideas, repeated ad nauseam in every business book you read or business conference you attend, that bear almost no relation to reality.”

Here are some snippets on those four disputable basic ideas …

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The first idea is that business is more competitive than ever.  That it’s a hyper-competitive world in which established giants are constantly being felled by the forces of disruption.

To the contrary, the most striking business trend today is not competition but consolidation.

Even technology is high on the list of industries that are concentrating.

In the 1990s Silicon Valley was a playground for startups.

It is now the fief of a handful of behemoths.

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A second, and related, dead idea is that we live in an age of entrepreneurialism.

The evidence tells a different story.

In America the rate of business creation has declined since the late 1970s.

A large number of businesspeople who were drawn in by the cult of entrepreneurship encountered only failure and now eke out marginal existences with little provision for their old age.

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The theorists’ third ruling idea is that business is getting faster.

In many respects business is slowing down.

Firms often waste months or years checking decisions with various departments (audit, legal, compliance, privacy and so on) or dealing with governments’ ever-expanding bureaucracies.

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A fourth wrong notion is that globalization is both inevitable and irreversible.

Today globalization shows signs of going into reverse.

Donald Trump preaches muscular American nationalism and threatens China with tariffs. Britain is disentangling itself from the European Union.

The more far-sighted multinationals are preparing for an increasingly nationalist future.

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Thanks to AL for feeding the lead.

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#HomaFiles

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