Abstract
This is a truly ambitious work that compels readership by way of proclaiming to present an alternative to the existing dominant paradigm of business management. The two authors, both business consultants, offer what they see as a paradigm shift as defined under the criteria established by Thomas Kuhn (1962) in his seminal work, The Structure of Scientific Revolutions. The book is structured into two parts. The first part outlines and discusses the roots and consequences of the managerial dysfunction resulting from the existing paradigm. The second part of the book presents the components of an alternative paradigm which the authors believe to provide a more effective, competent, and ethical model.
The authors argue that the current paradigm fosters strong managers to be single-minded, within an incorrect top-down view of control while operating in a “gloomy perception of human nature” (p. 86) and focusing almost exclusively on enhancing shareholder value without much regard to ethical considerations. This is due, in part, to the “gene-culture” (p. 91) mentality of the dominant paradigm which allows the selfish gene, as per Richard Dawkins’ (1976) The Selfish Gene, to direct human activity and evolution itself. Thus, the authors undertake an anthropic leap greater than Dawkins by stating that the “economic man of biology is the result of the conception of the selfish gene” (p. 62). This gene-centric view is combined with the application of neoclassical economics—another component of the dominant paradigm—whose orientation of selfishness results in a business environment void of morality and altruism. The authors see neoclassical economics as “driven by the gloomy assumptions that human brings … are narrowly self-interested and opportunistic” (p. 113). Neoclassical theory also fails to properly address the existence of uncertainty and consequential risk (p. 117). According to the authors, the operational combination of the selfish gene and neoclassical economics leads to dysfunction, business failure, and a permanently “flawed conception of reality” (p. 86).
As an alternative paradigm, the authors propose behavioral economics over the existing status quo because of what the authors view as its pragmatic nature. Instead of self-interest, the focus is on group welfare wherein stakeholder benefits take precedence in business planning and, specifically, managerial decision-making at all levels. The definition of a stakeholder would include not only shareholders but also “employees, customers, supplies, communities and so on” (p. 250). Essentially, this would mean the socialization of the business by applying the principles of the stakeholder theory that also serve as the foundation for the implementation of corporate social responsibility (CSR). By fostering group welfare and the participation of the stakeholders, the authors argue that new checks-and-balances will be set in place to ensure an operational structure and working environment wherein managers would naturally consult their moral compasses in decision-making.
As an interesting addition to the alternative paradigm, the authors spend considerable time advocating hermeneutic phenomenology as an epistemological methodology for analyzing business, in general, and management practices, in particular. This parallels a similar advocacy found by another business consultant, Christian Madsbjerg (2017), in his recent work, Sensemaking: The Power of the Humanities in the Age of the Algorithm.
The authors are to be commended for undertaking a bold and critical analysis of what they perceive to be the dominant paradigm of management. Of particular merit is their contextual approach by unpacking the paradigm into components that are then matched with alternative contrasting components in the alternative model. However, their presentation of the existing paradigm is the weakest part of this book. The negative characterizations are not empirically verified in any way. This is particularly disappointing since the authors are business consultants who have their own professional experiences, as well as those of their colleagues, to substantiate their allegations and support their proposed alternatives with empirical data, case studies, or just anecdotal references. Unfortunately, the book is almost purely theoretical.
The authors argue that neoclassical economics is largely devoid of morality and that it harbors a negative view of mankind. However, none of these allegations were tied to any of the works of the prominent neoclassical theoreticians, such as Alfred Marshall, John Bates Clark, and Carl Menger. In fact, the first chapter of Alfred Marshall’s (1890) classic work, Principles of Economics, is filled with calls for a moral structure and ethical behavior. Unethical or criminal behavior is essentially irrational and enhances risk. However, neoclassical economics is prominent in its advocacy of rational choice, leading to the development of the rational choice theory. The authors argue that neoclassical theories ignore risk. However, neoclassical theoreticians have been credited for their pioneering mathematical models to minimize risk by generating predictions in market demand, outputs, and income distributions.
In this work, the authors assert that the dominant paradigm of management relies on the primacy of the selfish gene. However, much empirical research has been conducted since Dawkins’ 1976 book to show that environment has as much influence on human behavior as genes. It is interesting that two business consultants would place such primacy on a gene-centric orientation while marketers and salesmen work on a daily basis in the business world to motivate individuals to consume based on environmental constructs and design. Consider the number of times over the course of a year that items are moved around in a supermarket or the choice of products placed by the cashier counter to motivate impulse purchases. More curious is the authors’ interpretation of the selfish gene as primarily negative and how it is anthropomorphized by the authors to insinuate irrational and immoral self-interest. This goes against Dawkins’ work that portrayed altruistic motivations (following his anthropic approach), wherein the behavior of individual carriers may not be for self-survival but for passing on their genes to the next generation. Unfortunately, no real-life business examples are provided to demonstrate the selfish gene at work, and this reviewer wonders how this could be such a prominent component of the dominant paradigm of management when no one refers to this in the real world of business.
The authors’ advocacy of hermeneutic phenomenology in business analysis is surprising since phenomenology is a largely discredited form of methodology, vulnerable to ambiguity, subjectivity, and indeterminacy because of its rejection of epistemic commitments and metaphysical assumptions (except, possibly for the postmodern rejection of objective reality). It would have been valuable for the authors to have included actual examples of hermeneutic phenomenology at play in the world of business analysis. None was provided.
Ultimately, this reviewer is not convinced that this work is a paradigm shift for two reasons: (1) the components of dominant paradigm were presented in a theoretical discussion that lacked any verification, empirical or otherwise, and (2) the strength of the alternative model rested on the analysis of the status quo model which, unfortunately, has the structural integrity of a house of cards. Made even weaker is the fact that the components of the alternative paradigm lack any empirical evidence of any form to support them. This is disappointing given the professional wealth of real-world information which the two authors, as business consultants, did not choose to share to validate their intellectual proposition.