Keywords

Section B. Can Not Become a Profession

Introduction

The emergence of bureaucratic, hierarchical large-scale firms has had extensive effects on management of companies and on top managers’ backgrounds. Managing these big corporations required new skills and a new approach to the task and led to an influx of professional experts at various levels and in various positions. Top management positions were gradually taken over by a new generation of well-trained and highly experienced cadre of managers. To an increasing extent, this new generation consisted of salaried employees, without ownership in the firm. According to the American business historian, Alfred D. Chandler Jr, this led to a “managerial revolution”, where old, ad hoc-based systems of management were replaced by systematic approaches to the managerial task (Chandler 1980). This has been equated with a professionalization process of top management. Although Chandler’s views received criticism, he contributed with some important notions about the emergence of the modern large-scale corporation and the transformations in top management.

The question of managers as a new profession occurred as a result of—or in conjunction with—the development of industrial society and cannot be studied separately. Nevertheless, the question is complex and as I shall highlight here, these discussions go further back than the debates Chandler inspired. Not surprisingly, it has been going on since the emergence of the modern large-scale corporation; contemporary thinkers could well observe the development which occurred in society. Overall, it was not seen as an unambiguously positive development, but already early observers noted that there were negative effects from the process. For instance, in the 1920s, Adolf C. Berle and Gardiner C. Means observed that managers without a stake in the company often had different goals from the owners (Berle and Means 1932, pp. 119–25).

In this volume, the overreaching aim is to answer the question: should management become a profession? This connects closely to another question, namely whether management can become a profession. On the first question, my answer as a historian is: “it depends”—and on the second one: “only to a limited extent”. Firstly, there has not been a clear consensus that management should become a profession, not within the business community, among management thinkers or even among the managers themselves (and their associations). Some wanted to promote such strives, while other opposed or were reluctant. Secondly, aims to become or form a profession have as a rule failed. Nevertheless, I will show that some kind of process resembling a professionalization process of the “managerial cadre” has indeed occurred.

I will in this chapter discuss: (a) the debates concerning management as a profession in historical scholarship; (b) what professionalization of management has been considered to mean at various times; (c) how the process resembling a professionalization process has been reflected in managerial background (education, work experience, recruitment etc.); and, finally, (d) when and why aims to become a profession have been particularly to the fore among managers.

In the first part of this chapter, I will address the main discussions in the course of the 20th century. I will highlight if the contemporaries considered that it was important to form a profession, if such a professionalization process was considered possible, and if so, how was it to happen.

In the second part, I will give a broad description of the historical development pattern(s). I will briefly discuss changes in the managerial profile, i.e. managers’ education and careers, but also the role of professional “ethics” and identities. This was an issue which was on the agenda early on and it connects closely to the question of whether the managerial élite wanted to become a profession or not. I will concentrate on top managers. In the short conclusion, I will sum up the two questions set out at the beginning. The focus will be on the development in the Nordic countries, but I also discuss occurrences in other parts of the world. Historical analyses are usually comparative, both over time and across different areas and regions. To understand these transformations, it is important to look at the broader social, political and economic context.

Professionalization of Management and Modernization: Early Debates

One early proponent who thought that management could—and should—become a profession was the renowned management thinker, Mary Parker Follet, who drew attention to the subject in some of her lectures in the 1920s and early 1930s. The key questions she addressed seem familiar from today’s perspective; one of her key messages was that managers should become “more” professional due to the challenges of the changing society. Management in modern society was, according to her, a task too important to be left to those who did not have the correct attitudes and competencies. Management was a task for which one was to be as well prepared for as for any other. It was also the duty of the managers themselves to advance their professionalization and to work actively towards the establishing of a profession. In modern society, a profession provided an important function. In order to become a profession, management was to rest on “a body of knowledge” and on a willingness to serve others (Follet 1925a/1942, p. 134).

Overall, during the early decades of the 20th century, discussions on what actually managers did and what the management function consisted of were frequent. This is well known from the work of, for example, Henri Fayol and Chester Barnard. Corporate management in large industrial enterprises was at the time in many ways a new function. The discussions were also motivated by the changing society. As Follet emphasized, the need for professionalism among managers came from, most notably, the increasing competition on the market and from a growing scarcity of labor (and other resources). In modern society, managers could only legitimize their authority by having the correct competence for the task (Follet 1925b/1942, p. 118). She also emphasized that the growing role of the large companies made them increasingly play a public service role (Follet 1925b/1942, p. 122). The large corporations had become influential actors, which gave them responsibilities. Follet, like many other thinkers of the time, also emphasized ethical motivations; managers are dealing with human beings, and therefore they need to pay attention how these workers were to be treated. This was not an argument against a more efficient and systematic management, but, on the contrary, by paying attention to good leadership, the productivity of the employees would increase.

This connected to the ideas of a more systematic approach to managerial problems which were to the fore during this period. Most famous is of course the scientific management movement and the work of Frederick Winslow Taylor. According to Taylor, detailed studies of the production processes could solve the problems managers met in their daily work (Taylor 1911/2014). These ideas were also influenced by the period’s general belief in science as a tool for advancing the modern world. In fact, social issues could also be solved by a scientific approach. By addressing managerial problems in a rational and systematic way, firms would be better managed and eventually even the tensions between “labor and capital” would be eradicated.

These challenges required both new skills and new attitudes among managers. According to Follet, in order to become a real profession, a proper scientific knowledge base was important, but there was overall a growing interest in how leadership skills could be achieved. A rapid expansion in business education occurred in many countries in the first decades of the 20th century (see, for example, Engwall 2009; Locke 1984). Follet did not explicitly take a strong stance about which type of education was to be preferred. She acknowledged the work of the early business schools, but she also concluded that appropriate competencies could be achieved through talks, carefully selected readings, lectures, wisely led discussions and conferences. Collaboration between teaching institutions and practical business life could also be useful (Follet 1925a/1942, pp. 130–1). Nonetheless, systematic training and discussions would advance professionalism.

Follet was a strong proponent of professional associations. The associations would be significant for skill formation, but they were also to establish, maintain and improve professional standards and ethical guidelines (Follet 1925a/1942, p. 135). The association should also be responsible for overseeing that members kept to the standards and protect the public from those representatives of the profession who had not yet attained the acceptable standards or “willfully” did not follow them (Follet 1925a/1942, p. 136).

In the Nordic countries, these questions were on the agenda at the time. Early proponents of business schools and technical universities debated the role of formal education to meet the new demands from growing companies and fast industrialization. The first Nordic schools for business emerged in the early 1900s. Although the concept of “professionalization” (Swedish: professionalisering, profession) was not commonly used in the Nordic context at the time, it was increasingly argued that management was to be seen as an “occupation” (Swedish: yrke), for which specific competencies—and occasionally also a specific education—was required (Fellman 2000, p. 79; Fellman 2001). Another motivation was to lift the status of the business leaders to compete with the old élite (see, for instance, Engwall 2009). Leadership qualities were at the time still seen by many as something innate, while formal education was even regarded as something that could hamper the “entrepreneurial spirit” (Fellman 2000, pp. 76–82). Practical learning of the trade was therefore considered as the best way to start a successful business career. Systematic discussion in the business community about becoming a profession and how to advance such goals were not yet frequent.

Nevertheless, these discussions were part of a rapidly changing society. The first decades of the 20th century were a period of industrial progress, but also a time when in many countries the old class society withered away and was replaced by a meritocratic society (or at least the idea of it). In this environment, new opportunities gradually arose for strong professional and educational groups, like the engineers, to claim their leading role in the advancement of the modern industrial world. Occasional wrangles occurred between the engineers and the emerging business graduates about who was best suited to lead big corporations, and this made the groups formulate stronger professional aspirations.

Management as a Profession: The 1960s as a Watershed and the Backlash of the 1980s

In retrospect, the early thinkers propagating management as profession were few and the question only came strongly onto the agenda in the postwar period, especially the 1960s. During this period, the idea of “professionalization of everyone”, as described by Harold Wilensky (1964), was to the fore. The idea that management was a “specialist function” and an “occupation” that required specialization and special competencies gained ground. As Thomas Imse (1960, p. 38) argued, it was not surprising that “thoughts of professionalization of this occupation should arise”, as management had come (then) to play an important and visible function in society. During these decades, a belief in the development of a management science and a proper management education, which would provide particular leadership and management skills necessary to lead any kind of firms, irrespective of size or industry, grew strong. The “professional manager” became also increasingly equated with managers with a management education, i.e. an MBA or equivalent. For example, in the 1960s, Robert Gordon (1966, p. 318) defined professional managers as “salaried experts, trained by education and experience in the field of management”. This was especially the case in the US, but the American business schools spread their “gospel” around the world and the heyday began (see further Locke 1996). As the US was the leading economy of the world, it followed that they must have the best managers and the most modern managerial methods.

Also in the Nordic countries, similar arguments were to the fore in this period. For example, Finnish business school graduates began to compete with engineers over top management and claimed expertise in management (Fellman 2000, p. 120). Until then, the university engineers had had an advantage in the “professional competition”; the technical education had hitherto been on a higher level than in the early business schools, while the role of technical expertise and branch-specific competencies had been considered crucial for developing the modern company during the catching-up phase. The Swedish business graduates were able to compete with engineers after World War II, but engineers were due to their technical competence frequently found in top management positions, especially within manufacturing companies (Carlson 1986; Engwall 2009, p. 122). In the 1960s, the idea of management education also got a tail wind in Nordic business. The significance of promoting skills taught in business education became especially to the fore in Finland, where big business gradually started seeking markets abroad. Business school education claimed expertise in doing business with foreign cultures (Fellman 2007).

In spite of professionalization efforts, the goals were not reached, however. One reason is to be found in the field itself. One fervent critic from within the business schools, Henry Mintzberg, has often stressed that management is not a science, although the study of management can apply scientific principles (Mintzberg 2004, p. 10). Moreover, JC Spender (2005) points out that while a rigorous body of knowledge did develop in the business field, there was a large gap between the scientific knowledge taught to business graduates and their work in practice. What is to be considered managerial competence is highly dependent on the specific organization in which the task is carried out and its context. Another reason is an inherent problem in forming a “proper” professional group. The MBAs and various forms of executive education grew fast after the Second World War and have continued to do so until today. Nevertheless, not even those with an MBA-degree have been able to monopolize management positions. Business graduates’ associations have not been able to act as gatekeepers and regulate access in the same way as associations in the medical or legal profession. As Spender emphasizes, to become a profession is not only a question about developing a rigorous body of knowledge that shapes practice, but also about gaining monopoly power (Spender 2005, p. 5). Whether the obstacles of business graduates and/or managers to form a profession is a failure of the business schools or is due to the nature of the managerial function remains partly open.

Another important issue, but to a lesser extent debated, is the question of professional values, as we have discussed already using Follet. According to Rhakesh Khurana (2007, p. 146) many deans of American business schools aimed to create an education that would enable the formation of a managerial profession in the first part of the 20th century. This was to be done by bringing into the studies traditional professional values such as objectivity, self-discipline and disinterested commitment to be transferred to the larger community. These values are quite similar to those put forward by Follet. However, these values, commonly attributed to university education, did not particularly excite the employers in private corporations, neither were scholars within the field unanimously in favor of assigning such goals to business education. The business schools advanced the idea of creating professional management skills—and marketed them as such—but the schools were quite disinterested in providing their students with “higher” professional values. I will return to this in the conclusion.

Traits of the Professionalization Process: Transformations in Managerial Background

The transformations in top management gained early interest among scholars. Empirical investigations of changes in, for example, managers’ background were already carried out prior to Alfred D. Chandler Jr.’s (1980) work. In the 1920s and 1930s, managers’ origins and social backgrounds were especially the focus of attention (Taussig and Joslyn 1932; Miller 1949). Soon also other factors, like educational background and careers, were investigated. In her famous book, The Big Business Executive: The Factors that Made Him, which is based on a detailed investigation of the background of three cohorts (1900, 1925, 1950) of top managers in big US corporations, Mabel Newcomer (1955a, b) gave a detailed account of how industrialization, the growth of big business and the transformation in the educational system had changed executives’ backgrounds. Newcomer showed that industrial and corporate development had not only been marked by a transition towards selecting managers from outside the owning family, but it had also profoundly transformed the profile of the big business executive. Among other things, the amount of formal education had increased and managerial recruits had to work more years before reaching top positions. Moreover, management had become a full-time task and managers became more tightly tied to the firm and committed to their work. These notions show similarities with the characteristics of the classical professions, the last one resembling a “professional ethics”. In fact, according to Newcomer (1955a, pp. 143–4), modern professional management signified a prominent position in relation to the surrounding society and this position required high moral values. Big business leaders had obligations to contribute to “the community chest”. This is interesting in relation to Mary Parker Follet’s arguments as she emphasized the role of serving society. Thomas Imse (1960) emphasized that a professional status for managers should include taking a greater responsibility towards both employees and customers.

Newcomer’s results, which are seminal in the scholarly field, gained support in later research, although some refining and additional aspects have been entered into the debate. For example, the role of MBAs and executive education in top management has increasingly been in focus.

In scholarly literature, discussions on “the professionalization of management” have often focused on the separation of ownership and management. Professional managers are even considered as the same as “full-time salaried managers”. This is a very simplistic view of the concept, however (Fellman 2001, 2013; Hall and Nordqvist 2008). Nevertheless, when looking at historical research in this field, there is indeed a path away from the owner managers towards salaried managers. As the demands for competencies and profound skills grew, it also opened up opportunities to climb to the top for young ambitious contestants without the right kinship relations or ownership in the firm.

One of the most notable transformations in managerial background was the increasing level of education. The big corporations became increasingly dependent on graduates with high skills. There have been national differences in the educational background of managers. The recruitment of managers is historically and culturally embedded. In, for example, France, Germany, Sweden and Finland, a large share of top managers have a higher education. In UK and the US, the level of education has been somewhat lower. Business managers in the UK have also had a more diverse educational background, for example, degrees in the classics, humanities or in political science (see Cassis 1997, p. 133). There was in fact a shortage of business education until the 1960s. Reed and Anthony (1992) quote a famous book by stating that in the 1980s there was still too little provision of management training in Britain and that it had come too late, and it was for far too few. This phenomenon led to active efforts to improve professionalization among business management. The development process has also looked different in different countries and often it did not occur along an even path. Fellman showed in her research that in the case of Finland, it was swifter at some points and slower at other times (see Fellman 2000, 2003). Nevertheless, in all countries the level of education has grown steadily over time. A gradual convergence towards education for business has also occurred (for instance, Kaelble 1980; Cassis 1997; Fellman 2000). This can be seen as evidence of a professionalization process, too. However, in no country have managers with one type of education been able to monopolize top management positions, and national divergences continue to persist.

Although the importance of formal education grew and opened up new career opportunities, top managers, especially in big business, continued to come from the top layers of society long-into the 20th century (Miller 1949; Taussig and Joslyn 1932; Fellman 2000). This is perhaps surprising, but there are several reasons for this. Students at university-level institutions have largely come from upper- and middle-class backgrounds and business schools tend of course to attract sons and daughters with a “business-friendly attitude” often from business families themselves.

Students from the upper strata of society have often accumulated social and cultural capital, which makes them move easily in a variety of social contexts. Sons and daughters from business families have often acquired tacit knowledge about the managing of a business enterprise. Such capabilities are undoubtedly useful in career advancement (see, for example, Maclean et al. 2006, p. 91). In many countries, like France and the UK, there are specific élite schools and universities from which a considerably high proportion of the top layers in business and civil service come. Whether these educational institutions provide the best education and competencies, or provide platforms from which students get access to the right networks, or just provide a strong signal effect of correct attitudes and values—or all of these factors together—is often difficult to evaluate.

Interestingly, the share of top managers in big business that could be classified as “sons and daughters of business owners or business leaders” increased, for instance, in Finland until the 1970s (Fellman 2000, pp. 66–7). This seems at first to be quite paradoxical, as the share of owner managers and heirs decreased rapidly. One explanation was a fast economic and industrial change in the early 20th century, which meant that the number of “business owner and business leaders” increased overall in society. Another reason was the growing role of an education suited particularly for the business sector (business schools, engineering) in the corporate career. This type of education attracted especially sons and daughters of businessmen and -women. Finnish business is also today reluctant to recruit graduates with other types of education than business or engineering. Cultural factors affect career and recruitment patterns.

Education and career patterns are also closely interlinked. The growing number of years of schooling meant that young men and women entered the practical business life later than during early industrialization. Instead, careers moved faster; as managerial candidates started their careers later they moved faster “up the ladder”. In fact, future top managers were often fast-tracked, but they were also to show their ambitions early. Managers’ careers increasingly occurred within the corporate sector. During early industrialization, it was not uncommon to have worked in other fields prior to management positions. Experience from management positions became also increasingly important. Due to the growing hierarchies and new middle-management positions, there were growing opportunities for this (for an overview of literature, see Fellman 2000, 2003; Vinkenburg and Weber 2012). A growing tendency towards outside recruitment has also taken place. The rise in managers’ educational level—and a development towards some form of “general managerial skills”—resulted in managers becoming more mobile between firms. The development is not completely straightforward, however. The preference for recruiting top managers from inside or outside has varied between countries and between firms.

In conclusion, empirical research has shown that managers’ career patterns became more similar over time. In Finland and several other countries, this development occurred irrespective of the managers’ ownership in the firm (Fellman 2000, p. 159).These features can be seen as signs of a professionalization process.

Scholars have also discussed other dimensions, which could be seen as indicators of professionalism among managers, but which are more difficult to put into quantitative terms. Professionalism could, for instance, be observed in the introduction of meritocratic values, routinization and systematization of procedures and formalization of structures (for an overview, see Stewart and Hitt 2012). These aspects are important both in family firms and in firms managed by salaried experts, but it is often assumed that family firms more often suffer from nepotism and lack of meritocratic values and formalization. On the other hand, as Fellman (2013) showed, many family managers were during early industrialization better educated and often better prepared for their task than their salaried colleagues were. This was a result of owning families’ responses to increasing competition from career managers. In any case, routinization and systematization is to be considered a part of the professionalization process.

Concluding Remarks

Today, there is widespread agreement among scholars that the professionalization of management did not signify the transformation of management into a fully-fledged profession resembling a classical liberal profession. Aims to monopolize management through educational credentials have failed. The idea of creating a general management education, which provided the students with generalist managerial competence suitable in any firm, irrespective of size, branch or nation, has also been rejected. Alas, no specific knowledge base which could form a specific platform for a “managerial profession” has developed.

Nevertheless, some kind of development resembling a professionalization process occurred. For example, Michael Reed and Peter Anthony (1992, p. 600) argue that managers could be considered as a “prototype of an ‘organizational profession’”. Managers do display some specific characteristics, which are central for a professional group, like the ability to exclude and exercise limited monopoly control of the knowledge base. Managers have over time developed a knowledge base that can provide some protection against competing groups, although the control and exclusion is much more limited than for a traditional profession. Managers have also special techniques and languages which others do not have (Wilson and Thomson 2006, p. 173). Nevertheless, managerial knowledge is highly context-dependent. There is quite large organizational- and task-related heterogeneity among managers and among members of their professional associations. According to Reed and Anthony (1992), there is also quite high internal differentiation and hierarchical stratification within the group. Such features are not typical for strong professional groups.

So we can conclude that managers cannot form a strong professional group. But should they aim for that? What have their goals been in this respect? An interesting question concerns the role of professional ethics, values and (possible) professional identities and loyalties, which can be considered important indicators if a group want to form a profession. A profession, as mentioned, is expected to have a professional ethics and a strong identity with—and loyalty to—the profession. Mary Parker Follet was a strong proponent of managers forming a profession. Nevertheless, if the group develops strong professional—and ethical—values (duty to serve a broader purpose, dis-interestedness etc.) and loyalties, these might clash with the loyalty to the company and expectation of the employers. As Khurana emphasizes, there was not even unanimity within the scholarly community about aiming to make business school graduates able to enter a pure profession. According to Reed and Anthony, efforts to improve the professionalization among business management in the 1980s was, ironically, not well received by either the business community or employers. It was feared that managers’ commitment to the companies would be threatened by the managers’ growing commitment to the profession and increasing mobility on the labor market. This is in fact probably the main reason why managers and business graduates have been reluctant to aim towards developing management into a profession in the strictest sense.

It is often emphasized that business schools tend to educate people with similar ideas, values and attitudes and that this is what makes them attractive to employers. However, these values are seldom professional values as described by Follet or Khurana. On the contrary, to show their loyalty to the company and to the art of making business are values the employers often look for in top-level employees. On the other hand, this one-sidedness of the business graduates occasionally receives criticism from the business community. As Spender argues, some executives prefer to recruit arts graduates or even PhD physicists. They find them more adaptive and creative, while the MBAs’ “imaginations seem calcified by irrelevant—but rigorous—theory, and questionable ethical attitudes” (Spender 2005, p. 1290). So perhaps a little more of professionalism, in the form of traditional professional values, would in the long run be advisable?