The rate of change within contemporary business environment has intensified over the last few decades, which in turn have resulted in significant strategic implications for organisations of all types. According to Ford et al (2010), critical management studies (CMS) has been an important radically different development to mainstream management theory that offers alternative thinking to the management of contemporary organisations. Drawing upon Wickert & Schaefer (2015), it is noted that CMS is based on critically appraising and sceptically analysing the contemporary management practices that are based on profit maximisation rather than social and ecological sustainability. The proponents of CMS have argued that although there has been improvement within management literature away from the explicit organisational characteristics towards implicit factors, however the underlying factor that dictates allocation of resources within organisation remains creation of value for the firm (King & Learmonth, 2014). It is argued that due to this underlying managerial power in shaping the organisational behaviour therefore the contemporary management studies should be critically appraised for their links with social injustice and environmental degradation (Bergstrom et al, 2009).
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The review of CMS as an alternative to the mainstream management theories and practices has pointed out the importance of power and its distribution across the different actors related with the organisations (Alvesson, 2010). According to Ford et al (2010), CMS highlights the prevailing power structures that dominate contemporary organisations and their management, which in turn results in systemic decline in moral obligations concerning people and ecology that should be justified from the lens of profitability. The aim of this report is to critically explore the critical management studies (CMS) debate concerning power. In order to achieve this aim, the report has used multiple schools of thoughts from proponents and critics of CMS to provide a balanced review of literature. The report has used “inverted funnel” approach in critically appraising the literature concerning role of power within CMS.
Power has been defined in a number of ways within the management literature due to the degree of influence from its origins in a number of other disciplines. According to Ailon (2006), due to the diversity of definitions, it can be suggested that power suffers from tautological issue within management literature. However, the review of the popular definitions have noted that there is a high degree of overlap within them and therefore understanding the underlying basics can result in better development of the topic (Bachrach & Baratz, 1962). The very basic definition of power has been developed by Dahl in 1957, which encapsulates that “A has power on B to the extent that he can get B to do something that B would not otherwise do”. Although it is a very basic definition that focuses on the negativity of power, however it provides the basis understanding of the concept. This is the reason that Brown et al (2010) has pointed out that this definition has become the basis of more elaborated conceptualisation of the topic of power within the context of management studies.
The review of the literature has pointed out that traditionally power was seen to be arising from explicit organisational factors within managerial theories, however proponents of CMS have pointed out that there are implicit organisational factors that can be the source of such power. According to Ailon (2006), power is seen as the influence of any set of individuals inside or outside of the organisation that can have implications on the people within the organisation. Therefore, it is argued that individuals within organisations have a number of actionable options when faced with any particular decision, however due to the explicit and implicit power structures within the organisation, they tend to conform to undertaking certain actions in comparison with others. Drawing upon Brown & Lewis (2011), power is the concept that would influence the actions of individuals that they would not have undertaken in the absence of such power.
Power has remained explicitly or implicitly at the heart of a number of management theories and practices that have been developed and reported within the popular management literature. According to Ford et al (2010), management literature has evolved over the decades in the light of the changing macro and micro business environment, where the focus has remained on the development and sustainability of the competitive advantage of the businesses. It is suggested that as management has emerged as a value within contemporary businesses, there has been significant private and public power attached to it that has attracted attention from CMS (Ahonen et al, 2014). It is suggested that as management has been elevated to a powerful position, the overall criticism and scepticism with the current system has become concentrated on the topic.
The research has pointed out that traditional management literature has focused on the creation of value for the shareholders of the businesses. According to King & Learmonth (2014), this highlights the fact that shareholders have the explicit power to shape the overall long term organisational strategy and organisational behaviour within any given situation. However, it is suggested that such a view of the business has received sharp criticism from a number of areas, where conserving human rights and ecological destruction took centre stage. Drawing upon Erkama (2010), in order to overcome these criticisms, the management literature evolved into arguing that organisations should focus on the value creation for the stakeholders of the firm. Although, stakeholder focus apparently highlights that the demands for a variety of actors that have interest or are influenced by the business are included within managerial decision making (Tadajewski et al, 2011). However, it is noted that there is a high degree of diversity and multiplicity of demands from the stakeholders of the business and therefore their prioritisation is undertaken. The prioritisation of the stakeholders and their demands are undertaken within the context of their ability to achieve profitability for the business. The proponents of CMS have argued that even with the evolution within management literature, the overall managerial decisions are the function of power of shareholders and profitability of the firms.
CMS have pointed out that although there is an emergence within management literature regarding importance of human resources, environmental management and corporate citizenship; however all of these aspects are driven out of their links with the profitability and shareholder wealth creation (Mccabe, 2000). It is argued that although there is the perception of increased independence of decision making of the individual human resources, however the power of shareholders dictate the overall acceptable set of decisions while eliminating decisions that would be undertaken by managers in the absence of such an influencing power. Similarly, it is suggested that corporate social responsibility has gained importance in contemporary management literature, however only the areas that can be linked with profitability and creation of positive perception of the business are focused (King & Learmonth, 2014). According to Contu & Willmott (2003), the companies would self-report the positive community and environmental behaviour to gain a positive perception from the customers and other influencing stakeholders. Despite the fact that large multinational corporations have developed detailed corporate social responsibility plans, there remains disjointed implementation of these plans across the national boundaries based on their impact on the profitability of the businesses (Wickert & Schaefer, 2015). Therefore, the countries with stricter legislation and higher understanding of the issues by the customers have a better implementation of CSR policies by the firm in comparison with developed economies. This is the reason, it can be argued that both explicit and implicit power within contemporary organisations dictate the organisational behaviour.
There is a great deal of management literature that has focused on the use of organisational structure to achieve the strategic goals of the organisation. According to Alvesson & Willmott (2012), traditional management literature has pointed out the use of hierarchal structures, where the power of strategic decision making is concentrated at the top, which is then distributed and diffused through the rest of the organisational structure. The proponents of CMS have argued that such use of structure essentially focuses on the use of autocratic leadership to keep the employees aligned towards achieving the long term goals of the firm. It is suggested that the overall long term goal is divided into isolated goals for different value adding functions of the business, which are then further divided for each individual. As the individual employees are allocated their particular tasks within the hierarchal structure, therefore they are unable to exercise power that can influence the overall outcome of the organisation.
The managerial literature has however evolved over the decades towards the recommendation of flatter and team based organisational structures. According to Ford et al (2010), with the increased competition and industries moving into the mature stages of their lifecycles, it is important for businesses to rely on the human resources for the differentiation of their products and services. The use of team based structures is expected to bring higher level of innovation and creativity within the products and services of the business. The proponents of CMS have argued that even though there is a degree of freedom allowed to the employees in a team based organisational structure, however there is implicit power influencing their decisions so that the outcome can maximise the value creation for the organisation (King & Learmonth, 2014). It is suggested that business use this type of power to control the outcome from the organisational teams. The process and culture or monitoring and motivating the employees is geared towards limiting overall options available to the employees of the organisation.
The concept of personal identity and organisational culture in influencing the behaviour of individuals, groups and organisations has been discussed within CMS. According to Erkama (2010), identity is a set of reflexive narratives that are derived from participation in competing discourses and related experiences. The concept of work identity has been highlighted as the individual or group representation towards being productive for the organisation. According to Tadajewski et al (2011), it can be argued that the overall identity of individuals at work can be determined from their ability and motivation to achieve the organisational objectives. The contemporary management literature has played a pivotal role in developing the work identity as achieving the overall long term goals of the business, which are in turn dictated by profitability.
This has been exemplified by the analysis of identity of lawyers. According to Mccabe (2000), lawyers have self-identification of guardians of societal ethics and as trustees of the ethical profession, where they would defend the rights of individuals and other legal institutions. However, at the same time, their work dictates them to develop the identity to be distinctive in offering solutions to their customers that would minimise their liability and minimising the rights of others to achieve competitive positioning for their businesses. Drawing upon Contu & Willmott (2003), at individual level lawyers have the identity crisis to offer competitive solutions that would solely benefit their customers while ignoring the implications of their advises on other economic actors. At firm level, lawyers are operating as competitive businesses that are intrinsically motivated through profitability and growth in business. Therefore, these aspects suggest that the contemporary management literature promotes the development of identities within professionals that would inhibit their natural decision making towards profitability and creation of value for shareholders.
Similarly, it is noted that organisational culture has been promoted as an important managerial tool available for effective and efficient management outcomes. Organisational culture is defined as shared values, beliefs and assumptions that are shared across the organisation that have implications on the combined behaviour of the individuals (King & Learmonth, 2014). The proponents of CMS have argued that management literature uses organisational culture to ensure that all the employees of the business would behave in a very similar manner. The organisations with a strong organisational culture would ensure that the employees would undertake their decisions that would result in the short and long term profitability of the business. The focus on organisational culture would also suggest that human resources become dispensable as the new recruits are likely to continue making decisions required to achieve corporate success.
The review of CMS literature has noted that the contemporary organisations use routine activities to use disciplinary power to achieve high degree of conformance from their employees. According to Wickert & Schaefer (2015), disciplinary power uses processes of comparison and standardisation of individual performance, which determines their compensation and other motivational factors. The individuals that create higher value for the shareholders of the businesses are likely to receive a higher overall cooperative compensation and other motivational factors than their peers. On the other hand, the actions and behaviours of individuals that are not focused on creation of wealth for the shareholders receive lower overall compensation and motivation. This critical gap developed through the processes used within an organisation is therefore used to induce disciplinary power among the individuals.
It is suggested that management literature apparently allows for the individuals to have high degree of independence in undertaking decisions that they seem fit for the situation, however due to the disciplinary power they are likely to make similar types of decisions. According to Ailon (2006), the use of organisational processes to shift the burden to decision making from the top management towards individual employees of the business are likely to be the source of disciplinary power. The discipline is enforced through the consistent use of monitoring and surveillance of the individual actions, behaviour and attitude, which are judged as their performance.
The research within management literature has pointed out that power within contemporary organisations is embedded in the overall authoritative structure, culture and process of the organisation. According to the proponents of CMS, traditionally organisations had a hierarchal structure where the power was explicitly concentrated at the top (Brown et al, 2010). It is however noted that contemporary management literature has led to the development of team based matrix style structure, where different levels of management are jointly present in strategic and tactical decisions. However, drawing upon Ailon (2006), despite the apparent devaluation of power, there remains a strict guideline within tasks allocated to these teams regarding the overall long and short term objectives of the organisation. Therefore, although there is increased overall degree of decision making among the individuals within organisations, there remains overall pressure to conform among the managers to develop ideas that can become the source of sustainable competitive advantage. This is the reason that CMS literature has pointed out that organisations are structured based on processes and systems that are likely to use the power of shareholders to direct the decision making of the managers and the employees of the organisation.
The use of explicit and implicit power within contemporary management literature has been accepted as the source of achieving the long term goals of the organisations. According to Brown et al (2010), the long term organisational goals can be perceived as adding value to the shareholders of the organisation, which can be seen as profitability for commercial organisation. It is suggested that the power in extrinsic or intrinsic forms should be present within the organisation so that it can direct the energies, motivations, skills and competencies of the employees and other resources of the firm to achieve the long term aim and objectives of the organisations. CMS has argued that mainstream management literature present a number of reasons for the use of power within the context of the organisations.
There is a group of managerial theories that argue that in the absence of the power, the individuals of the organisation will do “negative” things. According to Ailon (2006), CMS has pointed out that mainstream literature has suggested that negative employee and individual behaviour can be seen from its normative or moral meanings. In the normative meaning, the individual would conduct actions that would negatively impact profitability of the business. On the other hand, moral meanings suggest that the individual would conduct actions that would be deemed immoral within the society, which in turn would also deteriorate organisational perception. Therefore, both of these cases justify the development of structures, processes and systems that would minimise such individual actions. There are two types of theories within contemporary management that have used this perspective, which include: (a) economically based management theories; and (b) psychological and social based management theories.
The economically based management theories have argued that individuals are inherently focused on maximising their personal outcomes from any action. This is the reason, according to Theory X and Y, there is a group of individuals that are lazy and lack the motivation to work till their full potential (Bachrach & Baratz, 1962). Taylorism has therefore suggested that businesses should develop profit maximisation routines and systems. It is further noted that Agency Theory and Transaction Cost Economics are important theories that have resulted in the use of power to direct employees of the organisations to achieve their desired outcomes (Alvesson, 2010).
The psychological and social management theories have pointed out individuals are easily misguided and therefore can lead to immoral behaviour and actions if not directed by the management and organisation. According to Ford et al (2010), the theories that fall within this domain highlight that the organisational way is the only moral way for the individuals to conform. The review of the theories that fall within this domain, it is suggested that individuals can have diverse set of moral understanding of the issues and therefore if they are allowed to make judgements based on their understanding then the overall response of the organisation is likely to be very weak. This is the reason that it is argued that development of systematic organisational mechanism to inhibit personal judgement of morality has been undertaken within mainstream management literature. The organisational cultural theories were developed to develop and strengthen a group wide system of values, beliefs and assumptions that can lead to conforming attitude from the individual employees (King & Learmonth, 2014).
There is another school of thought within the management literature that has suggested that if the power is absent to make employees conform to organisational values and goals, then it is likely that employees would make the business work for them. According to Bergstrom et al (2009), individuals are focused at maximising outcomes for themselves, therefore in the absence of any power, it is likely that the employees would misuse the organisational resources to maximise their personal outcomes. This has been exhibited through the examples of managerial greed that has resulted in the demise of large corporations like Enron. Therefore, it is argued that power in some form is likely to exist within organisations due to the resources that they have acquired or developed over time. Either the power can be from organisation acting on the employee or vice versa.
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CMS has pointed out that organisational power should not be perceived as something that would result in negative or selfish outcomes by the employees. According to Bergstrom et al (2009), power is everywhere within the organisation, however some actors have pervasive power and rest have subtle power. This is the reason that it is argued that power within organisations should be viewed from a critical standpoint, where all diverse areas of power and its origination should be analysed. It is suggested that the diverse stakeholders, actors and institutions surrounding the organisations have different types and levels of power, which should be balanced to achieve effective and efficient results for social and environmental sustainability along with profitability of the businesses. Drawing upon Tadajewski et al (2011), it is suggested that processes should be in place for the counter balance of power among the different groups of actors surrounding the contemporary organisation.
In the light of above discussion of the debate regarding power within the context of critical management studies (CMS), it can be concluded that contemporary mainstream management literature is based on the use of explicit and implicit power structures to achieve long term strategic objectives of the organisations. The report has pointed out that traditionally management literature has shown a high degree of power concentration within shareholders of the business, however despite its apparent diffusion, there remain high degree of influence on individual behaviour due to implicit organisational power structures and cultures. The discussion has highlighted that power has been used within mainstream management literature through explicit and implicit means through organisational structure, identity, culture, discipline and conformance. It is suggested that the contemporary management literature fosters behaviour of the individuals that is shaped by the power of shareholders and profitability. The review of the mainstream management literature has pointed out that the main reason that is highlighted for using organisational power is that without its presence, the individual employee would resort to negative actions both economically and morally. It is noted within the report that CMS have argued the presence of power across the organisation and its diverse stakeholders, however has suggested that power should be balanced through the deployment of effective and efficient processes and systems.
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