TOO BIG TO MANAGE
We’ve heard enough of the slogan “Too Big To Fail.” For some it was an excuse for government handouts; for others, it was a symbol of the corrupt relationship between regulators and those they regulate, benefitting undeserving mega-banks whose leaders are compensated more that than their institutions pay in taxes. Was it justified after the housing bubble to rescue the giants of finance? It did ensure some financial stability and may have averted further deterioration of the economy—a point difficult to prove retroactively because of the notorious “self-fulfilling prophesy” feature of any economic judgment—and therefore it was practically justified.
Yet, on principled and moral grounds, it was a travesty on a grand scale: what happened to capitalism? What happened to the belief in market forces determining who shall survive stiff competition and bad decisions? What happened to rescuing the weakest link in the chain we call society, rather than enabling greedy behemoths to thrive? Didn’t the dinosaurs become too big for their own good?Learning from that experience, perhaps we should be more forceful in our assessment of the latest scandal plaguing the media empire owned by the Murdoch dynasty. There is ample evidence that there have been illegal and immoral electronically-eavesdropping on royalty, celebrities, and victims at the News of the World. It’s appalling to discover around the ten-year anniversary of 9/11 that last summer the FBI opened an inquiry into allegations that News of the World tried to intercept the phone records of victims of the 9/11terrorist attacks.
Murdoch famously testified before a House of Commons Culture, Media, and Sports Committee that since that operation accounts for less than 1% of his overall news-media conglomerate, he can’t be expected to be responsible for its management. Have we shifted from “Too Big To Fail” to “Too Big To Manage”?
Yes, it’s impossible for Murdoch to know all the details of phone-tapping and bribery in his $5 billion empire; it’s practically unwise for him to micromanage such a large workforce. One cannot expect him to know all his employees by name or remember their birthdays. Innocence by ignorance remains understandable but legally and morally unjustified.
More importantly, practical considerations raise moral issues. First, consolidation is the rule rather than the exception in capitalist market formation: economies of scale dictate mergers and acquisition. This entails a concentration of power that should lead to an increased sense of personal responsibility at the top. Second, if consolidation is inevitable, despite the Sherman Act of 1934 aka anti-trust law that warns against market collusion that undermines free competition (see the US Department of Justice lawsuit against the AT&T mobile merger with T-Mobile), then let’s make sure corporate leaders are trained to become role-models and mentors. Third, in addition to proper training for corporate leaders, there ought to be policies in place that ensure corporate compliance with basic moral principles, such as not lying or stealing or harming others. Simple principles are simple to follow even in large institutions. Without good role-models up and down the chain of command and ongoing mentoring, no policy is worth the paper on which it’s printed.
As any business owner knows, there is a big difference between running one store or restaurant or factory and running two or more. With one, you can manage every detail, answer every question, and make decisions in “real time.” Once you move to two locations, you must hire a manager for each location, delegate authority for decision-making, and train your managers to think like you. Since human cloning isn’t available yet, the prospect of delegating is difficult, especially for Type A control-freaks. But it’s exactly these individuals who get to the point of opening another location…
No business manual, textbook, or course can prepare you to transition from micromanaging to delegating, from knowing about every dollar that is spent or earned to seeing only at the end of the month a Profit/Loss statement about what happened weeks before. This requires different kinds of planning and controls, policy-setting and measuring tools, all contributing to the ability to manage from the sidelines, like a coach or guide.
Size matters, after all. The larger the entity, the more attention is required to preserve a corporate ethos of integrity and morality that can be expected at every level by every employee. Vigilant monitoring is part of responsible management. If we are serious about personal responsibility, then letting the likes of Murdoch get away with a mere mia calpa is an admission of a bankrupt capitalist system that has lost its original claim to moral superiority over feudalism.
Raphael Sassower is professor of philosophy at UCCS and has refrained from managing entities too large to micromanage. He can be reached at rsassower@gmail.com Previous articles can be found at sassower.blogspot.com
