Abstract
In this chapter I discuss the rise of the managers in the first half of the twentieth century and the implications that managerial practices had, and still have, on business in general. I use this analysis to gain additional insight into the collapse of Australian HIH, American Enron, and Lehman Brothers. Management is a relatively new phenomenon that emerged more forcefully with the rise of the corporation in the early years of the twentieth century. The rise of the managers had an enormous effect on ownership. Prior to the advent of incorporated businesses the private owners or the family owners had also managerial responsibility for their businesses. With the rise of new business forms and incorporated risks the managers took a more predominant role and as a consequence a separation of ownership from management occurred. In other words, when managers took control over the means of production, which also includes services, the owners lost direct control over how their money was used and invested. The incorporated firm became the working place of the managers in the roles of chief executive officers, chief financial officers, and chief operational officers, also known as executive managers. The managers represent a separate group/class driven by self-interest. Not only employees and workers are subjected to the decision-making power of the managers. So, also, are owners, shareholders, and, increasingly, societal stakeholders.
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Notes
- 1.
The term corporation, however, is at times more intimidating as it evokes size and powerful incorporated interests. Organization can often be confused with organizing, the activity of business, and it not always conveys the sense of compactness that the term corporation does. The term firm is the most innocuous and I will use it only in citations or in relation to citations.
- 2.
The dates in square brackets indicate the year of the original publications. In-text referencing will include the original year of publication only the first time I mention the author.
- 3.
Worth remembering here that the decentralization of General Motors started at exactly that time (Vinten 2003, 39).
- 4.
This is reminiscent of Schumpeter’s analysis of big business and the role of the executives within corporations discussed in Chap. 1.
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Betta, M. (2016). The Rise of the Managers. In: Ethicmentality - Ethics in Capitalist Economy, Business, and Society. Issues in Business Ethics, vol 45. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-7590-8_6
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