General Information, Management Styles and Risks

Management: Art or Science?

Management is a process, a way of getting things done. The methodology employed in that process by any given manager is a curious mix of well-defined models, quantitative and qualitative components of planning, leading, organization and control, and the manager’s own interpretation of the results of decades of research into the very concept of management. The knowledge and skills needed to complete these processes are not innate: managers are, on the whole, taught to be managers through formal education and industrial experience. In addition, they need to be able to use specific management techniques tailored to small firms or to large corporations.

Researchers have found managers to exhibit twelve performance characteristics. Some of these performance characteristics are taught in business schools – the ability to analyze complex information, an understanding of human motivation – and others are learnt by the manager whilst working, such as the ability to make decisions in ambiguous situations, or the ability to quickly develop strong professional relationships. More interestingly, still others in this set of characteristics are more aspects of the manager’s personality than anything else, for example the willingness to be flexible or to think boldly. These last few characteristics suggest good managers, while learning most of their skills in tertiary education and then in the commercial world, have some level of managerial skill that is not yet fully developed until actual management education is undertaken. High-impact managers have some predisposed skills that lend themselves to a management role. The concept of management intuition is rarely formalized but often rewarded with promotion in the work environment.

This management intuition is often assumed to be part of the manager’s skill-set. When writing on best practice in the design of multinationals, Forteza and Neilson (1999) claimed managers must “design a blueprint, manage the flow of resources and inject some soul”. They provided a new model for organizational design and provided action items for each area for managers to enforce the new, global-oriented design. However, the actual implementation of these suggestions – restructuring a company in dozens of nations – requires insight, applied knowledge, and the identification of all required considerations. Forteza suggests that “balancing these considerations is a delicate art”, highlighting a key point of their research and others along similar lines: providing a model is the first step, but the organization’s leaders – the managers – need to apply some creative and innovative skills in realizing the goal of transforming the organization.

This line of thinking is not new. Management consultancy firms around the globe provide dozens of new ways to manage every aspect of an organization, but implementing these ideas requires specific skills and knowledge – especially in the small-to-medium enterprise (SME) segment. Such firms do not regularly engage change consultants, primarily because of the cost involved. Instead, the managers in SMEs maintain a broad range of management knowledge, and tailor new knowledge – such as that acquired from journals and conferences – to their own organization. Managers in small-to-medium enterprises often take on roles that are split into many positions in a larger firm. In addition, the total number of persons in managerial roles is greatly reduced, thus placing an additional burden on each manager in an SME to be a strong leader. As such, the ability to apply general management knowledge across many functional areas is especially important at the SME level, and forms part of the essential skill set for managers in such firms. The ability is obviously still relevant for managers in large corporations, but it must be refined for managers at the SME level.

The skills needed in such situations should be specifically addressed in formal management education. However, many of the competencies that tomorrow’s managers will need are ignored by existing managers and many educational institutions (Goldsmith, Walt, & Doucet 2000). Formal management education relies on models developed by key theorists, but often does not highlight the particular implementation issues that would be faced in a large corporation or in an SME. One the twelve management characteristics is the “ability to allocate limited resources perceptively”. This is one characteristic for which the translation into actions in a corporation compared to those in an SME varies greatly. With lower levels of staff and fewer in-house skills, success in this area can be the driving force behind an SME’s prosperity or decline. Even the process of deciding when and where to outsource a support service becomes more difficult at the SME level because more trade-offs must be made due to fewer initial resources. However formal education rarely provides a platform for learning such skills, and the business intuition of the manager becomes important. Internationally, organizations such as Certified Management Accountants of Canada have briefed the Canadian government on the need for specific SME management education programs, given the importance of SME’s to Canada’s GDP. They went on to suggest a ‘national strategic business plan’ for SMEs to ensure such companies have the management skills needed to survive. These observations suggest that the skills needed for managing an SME do indeed vary from those needed for a large corporation, and that specific training for each size of organization should be introduced.

Managers in large corporations face similar dilemmas but in different areas. Managers need the capacity analyse a situation quickly then act boldly, which is often difficult in such large firms due to the sheer size of the tasks required to ‘act’ on a decision. Managing teams and understanding the interplay between corporate groups becomes increasingly important as the organization size increase. This is highlighted in much recent research and best explained by what one writer calls the ‘core group’ – that is, a group ‘on whose behalf decisions are made’ within the firm. There is tension between the Core Group and outsiders, creating a leadership challenge for managers. In addition, the organization is seeking to prove its “own tacit views of the way it believes the world is supposed to work”. The implications of this is that one very important aspect of management, the ability to manage people and be an effective leader, has quite different applications in small businesses compared to large corporations. As such, the means by which managers learn those skills need to consider these factors in order to create the best-possible management team