By Dr. Hassan Shirvani—Much of the recent management\u00a0research\u00a0deals with\u00a0the\u00a0presumed\u00a0growing\u00a0business competition,\u00a0the\u00a0increasing\u00a0roles of entrepreneurship and technological progress in economic growth,\u00a0the\u00a0deepening\u00a0appreciation of\u00a0corporate\u00a0social responsibility,\u00a0and\u00a0the\u00a0rising importance of\u00a0globalization. \u00a0As a matter of fact, however, there is considerable evidence that (1) businesses are becoming more concentrated and less competitive, (2) most recent tech startups seemingly contribute more to leisure than to productivity and growth, (3) unethical business conduct is still rampant, and (4) many\u00a0businesses are operating in environments that are becoming more\u00a0protectionist\u00a0and less global.<\/p>\n
Such contradictory evidence once again highlights the\u00a0enduring\u00a0chasms\u00a0between perception and reality in management research and between the\u00a0academically acceptable scholarship and\u00a0the\u00a0actual\u00a0needs of business practitioners. \u00a0Thus, while many academic scholars keep patting themselves on the backs for the high qualities\u00a0of their research, many managers consider much of this research\u00a0to be\u00a0out of touch and irrelevant.<\/p>\n
Role of Psychology<\/strong><\/p>\n One important reason for the growing gap between management theory and practice seems to be the rising popularity\u00a0of psychology in management research. This is partly evidenced by the large number of behavioral models now regularly appearing in many management books, journals, and conferences. Many of these models, however, are based on highly simplistic assumptions regarding managerial motivations and attitudes. \u00a0As a result, the dramatic fluctuations in the fortunes of many businesses are now directly related to the psychological characteristics of their managers, employees, and even customers.<\/p>\n In the process, many of these models have gratuitously coined new terms and phrases for familiar concepts and theories. \u00a0Thus, forward-looking, flexible, experienced, decisive, and gregarious\u00a0managers are now routinely rebranded as anticipatory, feline, intuitive, alpha, and socially intelligent individuals. \u00a0Likewise, managers lacking in these same qualities are dismissed as reactive, canine, rational, beta, and socially impotent. \u00a0In a similar vein,\u00a0unethical\u00a0managers are no longer deemed to be the inevitable products of\u00a0their\u00a0materialistic\u00a0and\u00a0permissive\u00a0professional\u00a0surroundings,\u00a0but rather\u00a0the innocent victims of\u00a0their own\u00a0“congenital dishonesties.”<\/p>\n In addition,\u00a0in their eagerness to produce original research, many management scholars have developed\u00a0a multitude of\u00a0theoretical models which are\u00a0mostly belaboring the obvious. \u00a0It is hard, for example, to find any management theory which sounds both true and not obvious. \u00a0As a result,\u00a0while much of\u00a0management\u00a0research is\u00a0routinely\u00a0presented as scientific, in reality it is no more than a motivational\u00a0training exercise\u00a0for managers and their employees. \u00a0At the same time, by focusing too much on individual emotional and personal traits, researchers run the risk of neglecting the truly important outside factors affecting business performance, including the economic,\u00a0institutional, political,\u00a0and social environments in which many businesses operate. \u00a0Of course, many management scholars do acknowledge the presence of these factors in principle, but they\u00a0often\u00a0have a hard time incorporating\u00a0them in their models\u00a0in practice.<\/p>\n Rigor versus Relevance<\/strong><\/p>\n On the other hand, and in an attempt to give a scientific air to their published work, many management researchers are now making\u00a0increasing\u00a0use of\u00a0highly rigorous quantitative and statistical techniques. \u00a0While such an approach makes sense in finding optimal solutions to specific quantitative problems, it often fails to provide adequate theoretical and empirical justifications for essentially non-measurable behavioral issues. \u00a0This\u00a0situation is further exacerbated by the frequent application of regression analysis to document the empirical validities of the proposed models.<\/p>\n To\u00a0the extent that many of these regressions are often performed without exercising due diligence as to the distributional properties of the underlying data (or the\u00a0suitability of\u00a0the\u00a0causal or\u00a0functional forms\u00a0used for\u00a0the estimated equations) many of the results may simply be spurious and, thus, unreliable. \u00a0At any rate, and for what they are worth, many of these tests regularly tend to give passing grades to the theories they are supposed to objectively evaluate. \u00a0This means that the\u00a0indiscriminate application of statistical techniques to largely mis-specified equations may be more of a smokescreen than a genuine\u00a0attempt at\u00a0scientific discovery.<\/p>\n Conclusion<\/strong><\/p>\n As the preceding indicates, while the field of academic management may have originally started as a serious study of business organizational structure\u00a0and performance\u00a0under different market and regulatory environments, at least some branches of it have\u00a0now\u00a0gradually degenerated into mere branches of applied psychology. \u00a0In the process, instead of concentrating on such important management\u00a0issues as\u00a0deteriorating\u00a0corporate governance\u00a0standards,\u00a0excessive business risk-taking and leverage,\u00a0flawed\u00a0managerial compensation\u00a0arrangements,\u00a0and dereliction of business\u00a0stakeholder interests,\u00a0a significant part of modern management theory has increasingly chosen to focus on the personal traits and emotional characteristics of\u00a0business\u00a0managers as the ultimate driving forces behind modern business developments.<\/p>\n Thus, having made significant inroads into economics, finance, law, and marketing, it seems that psychology has now turned its determined gaze upon\u00a0the field of\u00a0management. \u00a0While,\u00a0judging from\u00a0the experiences\u00a0of\u00a0other\u00a0academic\u00a0fields,\u00a0the application of\u00a0psychology\u00a0to management decision-making should be taken with a grain of salt, many management scholars seem to favor it, as it\u00a0provides\u00a0them with\u00a0a new\u00a0publication\u00a0gold rush in this age of academic publish or perish. \u00a0Therefore, to return to its former glory days, management research\u00a0will\u00a0need a major overhaul\u00a0to\u00a0render it more accessible, less quantitative, more practical, and, ultimately, more relevant. In the meantime, by engaging in\u00a0largely\u00a0irrelevant research, management academicians run the risk of gradually\u00a0losing ground to\u00a0the\u00a0less academically qualified but\u00a0more practical\u00a0business consultants.<\/p>\n Hassan Shirvani, Ph.D.<\/a>
\nProfessor Cullen Foundation Chair in Economics<\/p>\n