Why Management and Business Studies Need History

By Harry Knowles*

In the late 1980s, a roundtable discussion between prominent Harvard business historians and management academics concurred with the proposition that understanding history is an important part of managing. Participants agreed that history also helps managers determine their organisation's current position using comparisons with the past. In addition managers can determine whether current events are part of a continuous trend or are discontinuities. It was also recognised that history is even more important in choosing strategies in today's rapidly changing business environment.

John D. Rockefeller (right) with Ludlow Miners, 1915. Business History can provide key insights into management practice and the evolution of business strategies.

In 1996, a survey of 75 members of the Management History Division of the Academy of Management considered that employing a management history perspective in business courses delivered a variety of benefits. These included providing a much needed context to understand various other courses in the field, giving students a perspective to employ in understanding their discipline, anchoring students in theory and dispelling the myths found in various text books.

These outcomes have been mirrored in additional research into the role of historical perspective in a business education curriculum. An historical component can also be justified on the basis that:

  • It is an important tool for understanding human nature and its past endeavours and can throw light on the present and future in many ways
  • Historical study increases our understanding of humanity and has lessons for human aspirations, ambitions and organisations. Eg contemporary empowerment and subcontracting initiatives were better known in previous eras as the helper and putting-out systems.
  • Historical study can develop communication skills (language ability, writing proficiency), an ability to evaluate evidence and a healthy scepticism to received opinion and propaganda
  • It can provide management students with an overview of the development of the national and international economy and provide key insights into industrial structure and the evolution of business strategies.
  • It can broaden business education by illuminating government-business relations, technology, corporate culture and business ethics
  • Business and management history not only encompasses the study of organisational systems but its breadth of approach provides managers with insights into human behaviour operating under a variety of constraints and influences
  • Modern managers operating in a world of high-speed decision-making need to be aware of how long-tem changes have affected enterprises. Business/management history is multi-disciplinary and concerned with long-term change and offers a more practical focus.
  • Business/management history supplements management theory's principles for managing organisations by offering ‘portrayals of reality against which those principles may be tested and experienced vicariously”.

At the Harvard Business School, history has long been and “remains a vital part” of the School. More than any other business school, the Harvard School “has integrated the study of history into its curriculum from its earliest days. Today, the School offers three MBA courses in business history, including the module Creating Modern Capitalism which is taken by all incoming students.

A particularly important aspect of management/business history is historical research. Not only does it provide a foundation for identifying the current state of knowledge but it also offers a framework for securing and integrating new information. Yet another valuable feature is that it affords the opportunity for management teachers, researchers and practitioners to frame the right questions – the “how”, “why” and “what” questions that historians ask appropriately link into the academic areas of enquiry of theory, process and practice. A third benefit is that the information that is obtained in historical research allows for the construction of an integrated framework which presents research data in a manner that is valid, understandable and applicable. A reassessment of the past is essential if we are to properly understand the present and predict the future.

The value of management/business history has long been recognised. Early work in the 1920s focussed on topics such as employee relations, productivity, wage plans and work methods. In the 1950s, John Mees (1959) work, Twentieth Century Management Thought provided one of the most significant in depth analyses and discussions of management history from the scientific management era to the immediate post World War 2 period. In the 1960s and 1970s, Claude Georges's The History of Management Thought (1968) and Daniel Wren's The Evolution of Management Thought (1972) provided an important synthesis and direction in that particular field.

In the field of management history, some of the approaches have included a discussion of management developments within a particular chronological period; the identification of various ‘schools' of management thought and demonstrating the extent to which management theory and practice have been a direct reflection of the ideas which emerged from these groups.

The employment of an institutional approach involves an historical focus on the operations within an organisation, business firm or industry. For example, Chandler's research in Strategy and Structure (1962) on the linkage between organisational strategy and structure. A biographical approach employs biographies to provide insights into the lives and actions of famous business people and entrepreneurs as well as providing the foundations for a fifth approach which combines ideas and concepts with biographies. For example, an investigation of the ways in which an individual has employed particular concepts in managing an organisation or in achieving particular organisational goals.

So much of business and management teaching and research, particularly in Australia, is undertaken in a temporal vacuum. Surely a management consultant retained to diagnose problems in a business organisation needs an understanding of the organisation's history and the historical context of its environment in the same that a medical practitioner requires knowledge of the patient's medical history as a prerequisite to diagnosing an illness. It is unlikely therefore that a management professional would claim than an historical perspective is unimportant. Nevertheless, the need to integrate an historical perspective into what is taught and researched in Australian business schools is generally ignored.

Clearly, the employment of an historical perspective adds a further important dimension to management/business research and teaching, particularly in the realm of theoretical explanation and methodology. Many trained historians have found their way into business schools and management departments in Universities – the opportunity is there for the taking.

References:
J. W. Gibson et al, ‘The role of management history in the management curriculum :1997', Journal of Management History, V. 5 (5), 1999, pp. 277-285
Alan Kantrow (ed), ‘ Why history matters to managers', Harvard Business Review, January-February 1986, pp.81-88
R. Warren and G. Tweedale, ‘Business ethics and Business History: Neglected Dimensions in Management Education', British Journal of Management , V.13, 2002, pp. 209-219

* Harry Knowles, Work and Organisational Studies, University of Sydney.

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