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Business Theory

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Business Theory

The breakup of the mass market and the proliferation of content in the form of products has also seen a segmentation of ideas which has effected the overall search for scientific truth. Once this truth was an elusive something searched for. Now "truth" has become a commodity bought and sold each day in the American marketplace. The once elusive truth is now another product, subject to branding and packaging and sophisticated television commercials and advertisements. Anyone with a few bucks can "find" truth.

It is little wonder that the dominant scientific paradigm of our age is fractals and chaos theory. This paradigm fits well into the overall segmentation of modern life.

But it is one thing when consumers become confused from too many choices and quite another when our leaders are confused from the increasing segmentation of the modern world. This has happened because of the branding and packaging of American thought. To work in the segmented marketplace, economic value comes from differentiation not commonality. This is the paradigm in American academia as well as in the think tanks of Washington and the multi-billion dollar consulting industry. There is economic value in segmentation and little value in sameness. In fact, under modern marketing laws, sameness is a sure receipt for failure.

The lesson of branding is practiced by American management consulting firms and is well documented in The Witch Doctors: Making Sense of Management Gurus by John Micklethwait and Adrian Wooldridge, Staff Editors of The Economist. They find the business world overrun by fads created by management gurus who come from high-powered consulting firms, business school professors and motivational speakers. As the authors argue, these people are modern day witch doctors, promising the cure for what ails corporate America.

The findings of Witch Doctors is confirmed by another book. In Dangerous Company, journalists James O'Shea and Charles Madigan show the huge price and small solutions organizations receive from major league consulting firms. An example AT&T which spent "by conservative estimate" nearly half a billion dollars on consultants between 1989 and 1994. The amazing thing, though, note the authors is that the company seems as confused today as it was from the start. "It has lurched and shifted from strategy to strategy, from consulting house to consulting house, all without landing anything that seems to have provided much help with the challenge of finding a strategic resting place, a market position, a plan, that could give it some leadership and some stability during troubled times."

Eric Abrahamson of Columbia University's Graduate School of teaches a course on management fashions. His research suggests there is a business-knowledge-producing community made from such components as business schools, books, publishing, periodicals and consulting. Abrahamson suggests that all of these that compete to advance/impart cutting edge business information/knowledge. In fact, business schools' long-term survival depends on their strategic positioning within this community.

Many are probably familiar with key management/business fads of the past fifteen years such as Re-Enginnering, Management by Objectives, T-Groups, Matrix Management, Management Grids and Empowerment. Like a bunch of consumer products, they have come and gone and management is left wondering if the management field as been increased or simply confused to a greater extent.

One of the key management fashions Professor Abrahamson has investigated is Quality Control Circles. These reached their height of popularity in 1981 and 1982. He found that what ws written about them was "unreasoned, emotional, unqualifiedly positive." However, then the emotional content plummeted and negative content arose and the number of articles fell. By 1993, the great majority of firms that had adopted Quality Circles had abandoned the technique. But Abrahamson notes that the academic press kept focusing on it even though the popular press had lost interest. The reason the popular press abandoned the concept, though, was taht it had found a new fashion in Job Enrichment. This concept was replacing Quality Control.

Studying similar decline-replacement situations, Abrahamson reached the illuminating conclusion that "The collapse of a fashion leaves a void in discource that management-fashion setters must fill with a discourse launching the next fashion." This is necessary to keep the entire industry of discourse production in business alive.

Again, the problem is that there is branding possibilities in constantly creating different theories to sell to management. Like new cars each year, it is imperative that new theories are rolled out for hardly any one of the theories have had true value to business. But hope seems to spring eternal and the answer might just be in that next seminar, that next business book, that new consultant. It might be in the future for it certainly hasn't been in the past.

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