William Hopper on Managerial Culture

Why are you interested in studying the culture of management?

Well, my interest was first stimulated by my elder brother and co-author Ken. As an engineer, he had worked for many different companies in Britain and the US and been struck by the enormous differences which existed in managerial styles between these two countries. Although each enjoyed strengths and weaknesses, the American version was, in his opinion, much superior. This started him off on a lifelong study of what you might call ‘comparative national managerial cultures’. He began to write a book about it way back in the 1970s, but regrettably took ill and became a chronic invalid soon after. As a result, his book would be put on hold for many years. About seven years ago, I said to him that it was a very important book and persuaded him that we should try to produce it together and so we co-wrote our book, The Puritan Gift.

What is the ‘gift’ of the title of your book, and how is it relevant to managerial culture?

The Puritan migrants, who went from England to America in the 1630s, brought with them an enormously successful managerial culture which we refer to as the ‘gift’ in our book. In the next three centuries, this gift provided the driving force behind the transformation of 13 tiny colonies into the most powerful nation in the world. Under the US occupation of Japan from 1945 to 1952, America would implant this same culture, metaphorically, in the soil of its defeated enemy, an event which led to the Japanese economic miracle. The story doesn’t end there; the Japanese would teach this same culture to the future ‘Asian Tigers’, including Taiwan, Singapore and South Korea in the 1970s and 1980s. The Taiwanese then passed it to mainland China in the 1990s and to Vietnam in the decade just past. A managerial culture that had its origins in East Anglia before 1600 would conquer a large part of the globe. The Puritans’ gift to America became Japan’s gift to the world. Where will it go from here? Let us hope it reaches large parts of Africa, where it is badly needed to raise the general standard of living.

Tell us about your first choice, The Practice of Management.

The author Peter Drucker was by any standard a remarkable man. He was an Austrian Jew who emigrated to the US in 1933. I got to know him in the 1950s when he was an adviser to the shipping company W R Grace in New York, where I worked as a financial analyst. The Practice of Management describes American managerial culture as it was at the mid-20th century and is a treasure trove of information about the period. Drucker’s choice of title is significant. He saw management neither as an art nor as a science, but as something one did in practice. In our book, my brother and I use a different term, ‘craft’, which we believe to be more precise than ‘practice’, but all of us are getting at the same thing. A craft is something that is learned in practice under the direction of a master. This is precisely how good management was taught and learned in American companies of that period; it was not something that you learned in a class at college.

Next book, The Visible Hand.

The author of this book, Alfred DuPont Chandler was the Professor of Business History at Harvard Business School. As his middle name implies, he was a scion of the family which founded the great chemical company DuPont. In the 1920s, one of its principal customers was General Motors, to which it supplied paint. When the car maker went bankrupt because it was poorly managed, DuPont went to its rescue. DuPont installed good management and created one of the greatest companies of all time. The Visible Hand was published in 1977. Its name is derived from Adam Smith’s ‘invisible hand’ – an expression which implied that free markets were largely self-correcting. Chandler takes a different view, arguing that whatever relevance Smith’s theories may have had in 1776, they did not describe the American economy after 1850. By that time, in his view, ‘administrative co-ordination’ had taken over from ‘market co-ordination’. The former ‘invisible hand’ had been replaced by a ‘visible’ one.

It sounds like Chandler’s book bears upon our current recession. What insights can he bring?

His analysis of the limits of free market economics fell on stony ground when it materialised in 1977. This was a period when the Chicago school of monetarist economics was dominant – people believed that the market could do no wrong. As a result of our current great recession, however, the central thesis of The Visible Hand has come back into its own. Both Drucker’s and Chandler’s books fill in gaps in free market ideology by highlighting the importance of the practice of management.

Next book, Adam Smith’s An Inquiry into the Nature and Cause of the Wealth of Nations.

The Wealth of Nations was the first serious tract on economics in the English language and it profoundly shaped the way people thought about the economy and society. However, it has been seriously misrepresented by people who either have not read it or, if they have done so, overlooked important passages. Many people know Smith’s arguments in favour of free markets but how many people know his thoughts about the failings of market economics? In the book he argues things like: ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public…’ or the even more damning: ‘Commerce sinks the courage of mankind? The minds of men are contracted and incapable of elevation.’

Your next book elaborates on the content of this good managerial culture.