Inauguration Speech of Professor Andrzej K. Koźmiński, the President of our University
We invite you to familiarize yourselves with the inauguration speach of Professor Koźmiński, which he gave to commemorate the 25th anniversary of our University.
ON THE VERGE OF A GLOBAL TRANSFORMATION?
Management science and managerial education in the face of challenges of the future
Andrzej K. Koźmiński
A Speech on the Inauguration of the Academic Year 2018-2019
8 October 2018
25 years of Kozminski University
“We are on the verge of a global transformation. All we need is the right major crisis, and the nations will accept the New World Order”. These words are attributed to David Rockefeller, an influential financier, believed to have said them twenty five years ago. Today, they seem to be coming true in a perverse way, certainly against their author’s intentions. It’s human emotions that trigger major economic changes, not the other way round as it has been so far. The logic of economics yields to the logic of emotions.
The neo-liberal order of the world dominated by one superpower after the cold war is falling to pieces in front of our very eyes, like the Morandi Bridge in Genoa, considered a symbol of modernity for many years. There is a global transformation ahead of us, but the “new world order” is nowhere to be seen just yet. It will be therefore a kind of “journey into the unknown”. The key to understand it is the idea of the “generalized uncertainty”, which is the impossibility to predict the parameters crucial to the survival and development of individuals, communities, organisations, and even countries and nations, and the related emotions, often verging on aggression and panic.
In recent decades both the practice and theory of management as well as managerial education have been under strong pressure for globalisation and the resulting standardisation of patterns, principles, philosophies, and practices. They were shaped and cemented many years ago, and therefore are less and less suited to the dynamically changing reality. Businesses practitioners operating in competitive markets intuitively grope their way to adapt to the new reality, taking advantage of the opportunities brought about by the latest technology: AI, Big Data etc. There are no clear explanatory concepts, but management science without them becomes unable to explain the reality, and therefore loses its educational value. It’s no longer possible to teach management based on ancient Harvard cases and subsequent editions of the same textbooks. Management science and managerial education are now facing a great challenge of re-explaining the processes of management taking place in the economy and society – from a global perspective because the world is a “global village” nowadays, if only for technological reasons, and no “new nationalism” will change it.
I’ll try to mention the issues which I believe to be most important and which should be raised in order to face up to the most urgent challenges of the future, or actually of the “buzzing present”. I’ll limit myself to five.
Firstly, regardless of any pledges and pleas, politics has already made its way into management and will remain there. To quote Shakespeare: “Hell is empty and all the devils are here”. The management theory as we know it is not fit for explaining political games. Meanwhile, the role of the political state in the economy is not decreasing. Far from it, we can see an intensified regulation and a continued activity of sometimes huge organisations more or less directly owned and managed by the state. It’s not “pathology” or a “temporary difficulty”. What mechanisms govern such structures? How do we design, modify, and – possibly – improve them? The imitation of a traditional private sector is certainly not the answer.
Secondly, we are witnessing a radical shift on the job markets and in employment relationships. Jobs that require average skills and offer average pay are disappearing. We are left with jobs for those who “do the thinking” and those who “do the dirty work”. The economic basis of the existence of the middle class is vanishing. And so are the traditional ambitions and dreams: it’s not about having or possessing anymore, but about using, experiencing, and being thrilled. The only way to escape is entrepreneurship, which involves also treating and promoting oneself as a mini-business. The employee-employer relations become more like short-term commercial transactions that can be aborted, modified, reversed. HR specialists find it hard to handle such relationships. The situation becomes complicated and additionally destabilised by the unavoidable migration and the multicultural context of all management. We’re not able to foresee the intensity of these processes. As of now, Pakistanis are delivering pizza on bikes all across Warsaw.
Thirdly, monolithic structures are crumbling, giving way to networks of changeable architectures and compositions. The position in a network defines the extent of the benefits gained by the people and organisations. Networks exist and function thanks to information technologies (platforms, computing power) and increasingly more common elements of artificial intelligence, accelerating and rationalising decision-making and adaptive processes. Such a reality makes human aspirations change. Dreams of a vertical career from shop floor to a “CEO” now seem to be funnily old-fashioned, and are so perceived by young people, who ‘surf’ not only virtual networks but also real ones. Our duty is to prepare them for this exciting and challenging work- and lifestyle. To teach them the ability to recognise changeable currents and waves, to catch them in search for euphoria, and to get off them in a way to avoid their sometimes devastating force.
Fourthly, our knowledge about managing “hard” assets, on the one hand, loses significance when faced with AI systems (which can be seen by the drop in the demand for “human” financial analysts or logistics experts), and on the other hand, appears useless when applied to the most fundamental resources: information and knowledge. How to invest in resources whose production volume escapes the limits defined on the grounds of classical economics, i.e. the law of diminishing returns, and whose ownership appears to be increasingly illusory? How to cover the massive costs of the creation and upkeep of intellectual assets since the marginal costs of their products head towards zero, which means they should be available free of charge? What will the rules of the sharing economy be? We don’t know any of that. The champions of new technologies defend themselves by using the brutal force of monopoly, but these are only temporary and makeshift solutions, which cause an increasing social resistance and political pressure of global dimension.
Fifthly and finally, one of the most mythologised issues in today’s practice and theory of management is leadership. We can see wild offers popping up every now and then in the market in response to the common aspirations of popular culture, promising to turn anyone into a great leader. Meanwhile all serious analyses show that the heroic era of great leaders mounting wild stallions and followed by masses is coming to an end. In networked systems, their authority is too limited and too unstable. So it is necessary to explore and develop the ideas of bounded leadership and dispersed leadership.
If the community of management experts, educators, and researchers wishes to stay relevant and maintain its prestige, popularity, and money, it needs to rethink its paradigms and question many ideas considered indisputable until recently. This will be especially difficult in academia because of the fossilized division into rigidly defined sciences and disciplines, and the increasingly narrow specialisations established by scientists themselves. Formalized mechanisms of promotion and academic career development follow increasing fragmentation of science. Related significant issue is the conservative criteria of distribution of research grants and the “peer review system” applied in more or less prestigious academic journals acting as platforms for academic advancement. It effectively prevents innovative or unorthodox ideas appearing in print.
Despite all this, management scholars, as people with particularly extensive practical experience, with their own best interest in mind, should do whatever it takes to avoid wearing “red turbans” as depicted by a great Polish poet, Tadeusz Różewicz:
“At a university
a professor shaded under an umbrella
wearing a red turban
suggests inhaling prana.
Nonsense, duplicity, and lies”.