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AFTERNOON SESSION-TUESDAY, JULY 13, 1971

(F. D. MORGAN, Vice Chairman, Presiding)

MANAGEMENT AS A MODERN APPROACH

by DR. M. L. SHOTZBERGER, President, Catawba College

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Before we talk about the general field of management, I would like to comment about a number of trends that are going on in the society and that are having a very great impact on the practice of management. There are six of them, and I will mention them generally and then have a comment about each. These trends are as follows: Government policy, education, enterprise, technology, urbanization, and secularization. I want to suggest to you what each of these six things are doing within our society in very general terms, but first I would like to suggest to you what they are doing to those of us who have what we call managerial responsibility.

There has always been in this nation a high level of philosophic freedom for all of us. You are all familiar with it; there is no need to trace it in any detail. We talk in terms of free individuals and free institutions. However, in the early days of our society, given these six trends, the tendency was only for the very rich to have what we call practical freedom. In other words, you were free to go to the West Coast, but you probably could not get there. You had to spend a lifetime doing so, or at least our families and predecessors did.

Today, however, due to these critical organic trends, most of us as individuals are freer than we have ever been. Since most of us work for institutions, this freedom has put a tremendous constraint on the institutions and on managers. And managers, by the way, are institutional decision makers. The generalization very quickly is this. Since the people who are working for and with us are more free, we as institutional decision makers are less free. Yet it is interesting, in spite of these two basic developments, we are still required, as institutional managers or institutional decision makers, to produce with great quality and at low cost; yet we have a group of people working for us who no longer may be bullied around because of their personal freedom.

Now let us see how these trends fit in. Since probably the middle 30's the emphasis at the level of government policy, particularly with

regard to the federal government, has been that people are, after all, more important than institutions. Your very professional aspects of life suggest that this is right.

The idea of a sound pound, a sound gallon, a sound foot, a sound yard is to assure that I, as a consumer, get a fair break. It also is to assure, as you well know, that the manufacturer and the purveyor of certain things deals with me honestly.

The essence of the policy has been to say that people, individually, are more important than institutions, and also more important as individuals than as institutional decision makers. What this has done actually is to free us as individuals from the autocracy of our boss. In other words, we cannot be shoved around any more, as was the case perhaps in the 30's and prior to that.

The second trend that I mentioned was education. The actual accomplishment of the educational process, particularly since the turn of the century, has been to free most of us from ignorance, all but about 15 percent in terms of the adult population. The Blacks, the ghettos, the urban Black, and the rural White are still not free from the tyranny of ignorance, as we call it.

For those in the age bracket of 25 and over, the quantity of education has gone up better than 50 percent since 1940. No one really knows how to measure the quality of it except to say that it is better. Most of you who have high school students know that most of your offspring know more in the tenth and eleventh grades than all of us did when we were seniors in college. So the quality of their education is better too.

An educated person is in a position to measure the decisions of all leadership, be it political, professional, social, or managerial. The enterprise system interestingly has freed all but about 15 percent of our society from the tyranny of poverty. The handmaidens of slavery, as perhaps you know, are ignorance and poverty. If you want to keep someone unfree, you keep him stupid and ignorant and poor.

But most of the people with whom you are working and most of the people with whom I am working are protected by government policy. They are rather well educated and they have control over economic resources. All this, of course, means that we, in turn, have a great capacity to take advantage of technological development, and there is not much question about what technology has done. Its general characteristic has been to reduce almost our entire society and much of the world from the mechanics and the nastiness of drudgery. One way of putting it, as the census data now indicate, is that since 1960 and as of 1970 the control of energy output that each American has at his command has increased by 25 percent in a decade.

A simple way to measure the force is by what technology has made available to us, such as immense production capacity. Many

of your functions are within the department of agriculture in your state and local area. No one has to tell you what has happened in regard to food output on this continent, and particularly in regard to the man hours that it takes to produce a given quantity of food since 1900. It is almost unbelievable. Consider also the shear output in the production of physical goods. About six percent of our working population produces everything we need, at least in our society. This is just amazing.

Technology has been the handmaiden to this development, as you well know, but at the national level it has made the world so small it is almost unbelievable. At the personal level, it took me less than four hours to get from little remote Salisbury, North Carolina, into the Shoreham Hotel just yesterday. The day after tomorrow my dear wife and I will leave Salisbury at 11 o'clock our time, and at about 4 o'clock our time the next morning we will be in Rome. That is about 6,000 miles. Technology has made the world a smaller place. It is interesting because your education tells you all about it, and your economic resources let you take advantage of it. All of these things indicate that people are enhanced and that they are much better off than they have ever been before.

You can listen to all of the Butlers and Kilpatricks that you want to who say the number system is destroying society. It simply is not so. Just let me give you one number-1-704–636–7136. That is a lot of digits, but that number is more unique than my name. Martin Luther Shotzberger is quite a lot of name, but I know six other people who have my name, but nobody else in this world has that number. What I am suggesting is that the number system has helped me to be more unique than even my name. My social security number is all mine and nobody else's. What I am suggesting is that technology and the computer have made you and me and all of our millions of colleagues in this country eminently more important individuals, freer individuals.

You are the manager, and here is an individual who is covered by government policy and who has a good education and can command a good salary and is free to use technology to his greatest advantage. He does not have to bother too much with what you think, because he is employable elsewhere. So his freedoms now are eminently greater than they ever were. In addition to that, he has an organizational base, and this is the function of urbanization and urban structure. It has given us the markets by which weights and measures can really become meaningful. It has given us the social structure by which I and all of you are free to enjoy all of our newly found freedoms.

How well does the concept of secularization fit in with all of these five developments? Actually, what it ends up being is this.

Through all of these developments, we are so free now, we have an urban structure under which to enjoy our freedom, and we have a sense of values that does not cause us to feel a deep sense of immorality. In short, in 1900 it was almost sinful to be rich and free. Today it no longer is that. And the younger generation has caught on to this. They have accepted the freedoms of the society without the great remorse that we had at the turn of the century. I think, and many others think, by the way that they are better off than we are because they have this appreciation.

I think it would be significant at this point to tell you that we know these things in large part because of the nature of your work. We can weigh and measure almost every one of these statements. You are all familiar with the level of education. We can measure it. You are familiar with the level of economic wherewithal-$8,400 per family unit in the United States now. All of these things are measurable—the average income and the speed of technological development. This now lets us move to some extent into this area of management.

Let us refer now to the chart entitled "A Management Model." We can take this model and we can generally define the field of management as involving the use of information around which or from which we will make decisions. And then we would know automatically that a decision all by itself is really pretty sterile. It is not much more, if you will, than a process of mental games, riddles. So once we get a decision, we then have to think in terms of planning the implementation of the decision, organizing the institution so as to achieve and implement this plan, and developing the control factor so as to make certain that the decision itself is implemented through the plan and through the organization. So, in a conceptual sense, we say that management involves the use of information, arriving at decisions, planning the implementation of those decisions, constructing an organization to implement the decision, and setting up control processes to make sure the various decisions are accomplished.

Then the next question is, obviously-With what? Well, resources is our word; and we say functions which might be translated as jobs. We want to plan, organize, control functions, people, and facilities. And many people argue that, if you are planning, organizing, and controlling any one of these three, you are a manager. But we know that, if you are planning, organizing, and controlling all three of these, you are a manager. Like it or not, you are one.

We know also that it is a bit foolish to plan, to organize, and control even a decision without purpose, and so we do all of these things in order to achieve objectives. In this model, the first statement of objectives uses the phrase "routine or normal" objective.

High Exception results in mis-allocation of managerial resource.

Low Exception and High Acceptance provides released resources for innovation or improvement.

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We will, for the moment, disregard item (b) under objectives, because at this point the control function becomes critically important and we develop tools of routine. We want to make certain that the normal functioning of the organization does get achieved, and here we use such language with which you are familiar-procedure, policy, method, rules and regulations, and technique. All of this is to make certain that the normal decisions and the normal operations of the institution go on constantly. We do this basically by means of control process (on the lower righthand side of this model). We establish standards with which you are quite familiar, such as a pound, plus or minus a tolerance, a foot, and so forth. We get a report back on performance, and then hopefully we will make an immediate evaluation.

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