Abstract
The paper expands on Goshal’s criticism of what management as a scientific discipline teaches and the effects on managerial and societal ethics. The main argument put forward is that the economisation of management has a detrimental effect on the practice of management and on society in large. The ideology of economism is described and analysed from an epistemological perspective. The paper argues that the economisation of management not only introduces the problems of economics (three are identified and discussed) but destroys the very essence of management because economics is focused on efficiency and management should be focused on effectiveness. What is more, the basic axioms of mainstream economics stand in stark contrast to the philosophy of the Enlightenment and therefore endanger the foundations of Western societies. Management theory (via corporate governance) is the Trojan horse carrying economism into society.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Badaracco J. L. (2001) We Don’t Need Another Hero. Harvard Business Review, 79(8), 120–126.
Barley S. R., G. Kunda (1992) Design and Devotion: Surges of Rational and Normative Ideologies of Control in Managerial Discourse. Administrative Science Quarterly, 37(3), 363–399.
Beer S. (1972) Brain of the Firm: The Managerial Cybernetics of Organization. Penguin Press: London.
Bennis W. G., J. O’Toole (2005) How The Business School Lost Their Way. Harvard Business Review, 83(5), 96–104.
Blaug M. (1992) The Methodology of Economics: How Economists Explain. Cambridge University Press: Cambridge.
Broekstra, G.: 2001, ‹Metaphor and the Evolution of the Living Organization’, in J. Henry (ed.), Creative Management (Sage Publications, London), pp. 105–121.
Cross R. (1982) The Duhem-Quine Thesis, Lakatos and the Appraisal of Theories in Macroeconomics. The Economic Journals, 92(366), 320–340.
Collins J. (2001) Level 5 Leadership. Harvard Business Review, 79(1), 66–76.
Drucker P. F. (1964) Managing for Results. Harper & Row, New York.
Eastman W., J. R. Bailey: 1998, Mediating the Fact-Value Antimony: Patterns in Managerial and Legal Rhetoric 1890–1990, Organization Science, 9(2), 232–245.
Fayol H. (1949) General and Industrial Management. Pitman: London.
Feyerabend P. (1975) Against Method. 3rd edition, Verso: London and New York.
Freeman R. E., A. C. Wicks, B. Parmar (2004) The Stakeholder Theory “And the Corporate Objective Revisited”. Organization Science, 15(3), 364–369 May–June.
Friedman, M.: 1970, ‹The Social Responsibility of Business is to Increase Its Profits’, New York Times Magazine, September 13.
Friedman M. (2002) Capitalism and Freedom (40th Anniversary Edition). University of Chicago Press: Chicago.
Goshal S. (2005) Bad Management Theories are Destroying Good Management Practices. Academy of Management Learning and Education, 4(1), 75–91.
Gutenberg E. (1983) Grundlagen der Betriebswirtschaftslehre, Bd. 1: Die Produktion. Springer-Verlag: Berlin, Heidelberg, New York.
Hayek F. A. von (1975) The Pretence of Knowledge. Nobel Memorial Lecture. The Swedish Journal of Economics, 77(4), 433–442.
Hoppe H.-H. (1997) On Certainty and Uncertainty, Or: How Rational Can Our Expectations Be? Review of Austrian Economics, 10(1), 49–78.
Hühn M. P. (2005) What is Management? International Journal of Management Concepts and Philosophy, 1(4), 290–315.
Janov, J.: 1994, The Inventive Organization: Hope and Daring at Work (Jossey-Bass, San Francisco).
Kuhn T. S. (1962) The Structure of Scientific Revolutions. University of Chicago: Chicago.
Lakatos, I.: 1973, ‹Lectures on Scientific Method’ (London School of Economics Archives Lakatos 9/1).
Lakatos, I.: 1978, ‹The Methodology of Scientific Research Programmes: Philosophical Papers Volume 1’ (posthumously Edited by John Worrall and Gregory Currie) (Cambridge University Press: Cambridge).
Lindblom C. E. (1959) The Science of “Muddling Through”. Public Administration Review, 19(2), 79–88 (Spring 1959).
Livingston J. S. (1971) Myth of the Well-Educated Manager. Harvard Business Review, 49(1), 79–89.
McCloskey, D.: 1998, The Rhetoric of Economics (University of Wisconsin Press, Madison).
McFarland, J.: 2001, ‹Leading Quietly’, Harvard Business Review, 79(7), Special Section, 4–5.
Mintzberg H. (1971) Managerial Work. Analysis from Observation, Management Science, 18(2), 97–110.
Mintzberg H. (1975) The Manager’s Job: Folklore and Facts. Harvard Business Review 53(4), 49–61.
Mintzberg H. (1979) The Structuring of Organizations. Prentice Hall: Englewood Cliffs, NJ.
Mintzberg H. (2004) Enough Leadership. Harvard Business Review, 82(11), 22–22.
Mintzberg, H. and F. Westley: 2001, ‹Decision Making: It's Not What You Think’, Sloan Management Review, Spring, 89–93.
Mintzberg H., B. Ahlstrand, J. Lampel (1999) The Strategy Safari. Prentice Hall: Englewood Cliffs, NJ.
Neuschel R. P. (2005) The Servant Leader. Northwestern University Press: Evanston, IL.
Nord W. (2005) When Henry Mintzberg Writes, People React. Academy of Management Learning & Education, 4(2), 213.
Paton H. J. (1952) Kantian Ethics. The Philosophical Quarterly, 2(6), 53–58.
Porter, M. E.: 1985, Competitive Advantage (The Free Press, New York).
Porter M. E. (1996) What is Strategy? Harvard Business Review, 74(6), 61–78.
Popper K. (1934) Logik der Forschung. Springer: Vienna.
Popper K. (1965) Conjectures and Refutations. Harper and Row: New York.
Regierungskommission Deutscher Corporate Governance Kodex (Government Commission on Corporate Governance): http://www.corporate-governance- code.de
Simon, H. A.: 1947 (1976 3rd Edition), ‹Administrative Behavior’ (Macmillan: New York).
Slater E. P., W. G. Bennis (1964) Democracy is Inevitable. Harvard Business Review, 42(2), 51–59.
Tetlock P. E. (2000) Cognitive Biases and Organizational Correctives: Do Both Disease and Cure Depend on the Politics of the Beholder? Administrative Science Quarterly, 45, 293–326.
Tomajan J. S. (1945) But Who is To Lead The Leader? Harvard Business Review, 23(3), 277–282.
Weber, M.: 1947, ‹Wirtschaft und Gesellschaft’, 3rd Edition (Mohr-Siebeck: Tübingen), Originally Published in 1921.
Williams W. A. (1923) Theory of Industrial Conduct and Leadership. Harvard Business Review, 1(3), 322–330.
Wöhe, G.: 2002, ‹Einführung in die Allgemeine \Betriebswirtschaftslehre, 21st Edition’ (Verlag Franz Vahlen: Munich).
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Huehn, M.P. Unenlightened Economism: The Antecedents of Bad Corporate Governance and Ethical Decline. J Bus Ethics 81, 823–835 (2008). https://doi.org/10.1007/s10551-007-9550-x
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-007-9550-x