Saturday, December 29, 2018

Business management studies

There are legions of earnest young Chinese students all over the Western world enrolled in university business management degrees.  The poor darlings evidently think that we have something useful to teach them on that subject. Or maybe they will be happy that other people will think they have learnt something useful by  doing such courses.

I have been successful in business and I know others who have been.  And none of us ever spent one minute in these vastly over-rated courses.  I doubt in fact that any successful entrepreneur has ever done such courses before they became successful.  It is only in the machinery of already successful big businesses that a holder of a business management degree finds employment, as far as I can tell.

So what is going on?  What is in these courses?  What do students there learn?  They learn a fair bit about economics, a fair bit about accountancy, a fair bit about budgeting, a fair bit about industrial psychology and a fair bit about business law.  But all these things are just bits grabbed from other disciplines.  Is there anything unique to business studies?

There certainly seems to be.  There are thousands of books out that purport to tell you how to succeed in business but they all have different ideas and there is very little in them that could be seen as laws of business success.  People and circumstances differ too much for that. But there is one way that they are definitely useful. They almost all offer a heavy dose of business history.

And business history seems to me to be the one useful thing in a business degree.  By reading umpteen histories of how others have succeeded there is a fair chance that in his subsequent life as a business manager the student may encounter challenges similar to the challenges overcome by a writer of one of the books he has read.  But all businesses are different so for him to have any chance of having learned something useful for his business, the student will have to have read MANY books, perhaps all histories of successful businesses that there are.

But in the end all business management is man management (feminists shoot me) and being good at that is as much inborn as it is learned. I have a Ph.D. and many published academic papers in psychology and I can assure you that there is still not a huge lot that psychology can teach you about improving your social skills. What works for one person in one situation may not work for other people in other situations. And so much psychological research is bunkum (as the replication crisis has shown us) that professional advice from psychologists is probably pretty poorly founded anyway.

So what I want to do now is to reproduce the story of a very successful businessman and highlight something you can learn from it that is worth much more than any business degree.  In case it is not obvious, I will add some further comments at the foot of the article excerpt.  The article is from Australia so some of the allusions will not be understood elsewhere but the central message is, I hope, loud and clear:

Born with silver spoon but always unassuming: Maxwell George Rodd, Businessman

IF YOU were married in the 1960s you would almost certainly have received one or more boxes of Rodd Silverware's Jasmine sweet spoons or a canteen of Rodd silver cutlery as a wedding present.

Max Rodd, who built a family partnership into a metals conglomerate through various acquisitions and amalgamations, has died aged 91.

G&E Rodd Pty Ltd was founded in Melbourne in 1919 and by the late 1930s was the leading firm of manufacturing jewellers in Australia. During the 1930s, it diversified into silver tableware -- knives, forks and spoons, including souvenir spoons -- and during World War II, 200 employees were deployed to wartime production.

After his parents died unexpectedly, he took over G&E Rodd in 1948 and it became a public company. Although only 30, Rodd's business ideas and skills saw Rodd Silverware flourish.

It became a household name, its products offered as prizes on Bob Dyer's popular radio and TV game program Pick a Box. In 1961, a set of Rodd Australian gold Jasmine spoons and forks was commissioned as Australia's wedding present to the Duke and Duchess of York.

The year before the company amalgamated with Myttons Ltd, and in 1967 Rodd became chairman and managing director. A quiet achiever, his management skills would make good textbook copy for students of the field.

He embraced corporate requirements, but didn't become a corporate man. He would walk through the Rodd factory in St Kilda each morning and greet each employee by name. He encouraged young employees to progress and implemented superannuation before it became compulsory.

Even after he retired in the late '70s, he returned to attend reunions for employees.


So did you see the gold nugget in that story?  Here it is again:

He would walk through the Rodd factory in St Kilda each morning and greet each employee by name

Can you imagine what that did for his more than 100 employees?  It would have made them feel respected and appreciated.  Would such employees ever go on strike?  Unlikely.  They would feel able to discuss any problem with the boss as soon as it arose.

It is such a powerful business management practice that you wonder why it is not universally practiced.  That it is not shows that only a psychologically big man can do it.  And Rodd was a big man.

1 comment:

C. S. P. Schofield said...

One of the biggest stumbling blocks for a successful business is the inheritance tax. Instead of a business staying in the family (assuming anyone in the next generation cares to run it) it must be IPO'd to raise the money to may the taxes due on the death of the person who built it. This hastens the day that the COE is a college-trained suit with no personal connection to the company reputation. Net result? Decisions that bring disrepute to the company are made by ninnies too focused on the bottom line. Decisions that a family member might have brought to a halt saying, "Don't do that, my NAME is on the goddamned building!"

Can in point; a number of years back McDonalds was running one of their Monopoly games, and a customer found an instant-win piece for $1,000,000. He gave it to his pastor, for his Church. Now, the rules for the game made such pieces non-transferable, and McDonalds said so.

It took THREE DAYS for the suits to realize that that decision represented a public relations catastrophe likely to cost them one hell of a lot more than a million dollars.

The initial "We aren't paying out" decision was made because what companies who run such games do is buy 'insurance' policies, based on the rules, sone demographic studies of what percentage of people bother to play, and the odds of winning. Since the rules were broken, the insurance wasn't going to pay out.

But if Ray Kroc had been alive I like to think he would have killed the 'don't pay out' idea dead in the first hour it was mooted. The bad publicity assuredly cost McDonalds one heck of a lot more than a million, and Kroc wasn't an idiot.

If the inheritance laws weren't designed to keep people from passing fortunes down to their children, it is likely that many corporations would be badly managed by those children. But arranging things to that 'Business Studies' suits are running things virtually guarantees that the company will be run with stunning mediocrity.