The Culture of Monopoly Management

An Interpretive Study in an American Utility

Steven P. Feldman

• Publisher: Routledge
• Year: 2018
• eBook ISBN: 9781351189057
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

The primary objective of this study, originally published in 1986, is to provide a detailed description of the cultural aspects of interpersonal relationships as they are found in the career development process and the cooperative process. The study also develops a theory of culture and applies it to these parts of a modern organisation. The focus will be on the ways in which managers protect and advance their careers and initiate and contribute to collective effort. This title will be of interest to students of Business Studies and Management.

Chapter III

The Culture of Career Development

I. Introduction: An Interview

So you want me to tell you why these fifty were promoted to the top. I’ll be eighty years old this June and I’ve been retired for fifteen years, so I don’t know how much I can remember. I started in the telephone business in 1924, I worked for Bell for forty-three years. I was considered one of the most outspoken vice-presidents of human resources in the whole system, I had that job from 1950 to 1967.

When I came into the job managers were being held down because one person didn’t like them, we tried to break this up. We set up a program of continual appraisal, of group appraisal. We started out by testing them at the bottom of the hierarchy, but after this we believe in appraisal, not only boss’s appraisal, but boss’s boss’s appraisal.

Before the 1920’s we had college recruiting; the recruiters would go to State and make offers to all engineers. They hired a lot of people but none stayed around. After World War II this changed and we started choosing people on class standing, extra curricular activities, and calibre of college. AT&T knows more about colleges and recruiting than anybody because we have been doing it longer. We started recruiting the best students at small colleges, no other businesses were doing it. We had a policy that the people we hire into the college graduate program should have the potential to hit at least third level; we gave them special attention. It started with a two year indoctrination course. They were given selected jobs and moved around through all the departments. Noncollege people were watched also, but college skills helped move them ahead quicker in the early years of their careers. In the 1930s, 1940s, and 1950s, thirty percent of our best people did not go to college. We had vice-presidents and assistant vice-presidents without college diplomas.

I kept extensive records on each third level manager and up. I had a color code scheme where every third level and up was appraised by color, I kept this in my desk. By color he was rated as: one, could not go higher; two, could go one level higher; three, could go two levels higher. I personally, and my people, looked at college graduates to see how they were doing—are they progressing toward third level? If not, why not?

If a third level job opened up we would get together—the general operations managers (fifth level) from each geographic area, the senior operations vice president, and myself—and decide who gets the job. The chief executive officer (CEO) did not sit in these meetings but had a veto over any decision we made—he only overturned the group decision once in seventeen years.

One of the biggest Issues during this period was training. I was very very strong on training. I learned that if I spent money on training I got results back that paid for the training many times over. After World War II we started nontechnical training. We were the only system company to validate this new training course. We set up a course, set objectives, got advice from academics. After people went through it, we checked up on them by questionnaires and interviews. We eventually started getting selective and sending people to specific programs if they showed potential.

I master-minded the Institute for Humanistic Studies at the University. A professor of industrial psychology advised us on this. Ve used him as an advisor during a bad strike we had in 1951, then set up the program the following year. We followed the careers of the Humanities graduates for ten years. The Institute was a big success. David Rockefeller liked it but could not sell it to the top executives at Chase. Three out of the four top people at AT&T today went there. If you had officer potential (sixth level), we sent you there. AT&T had programs at Williams, Dartmouth, and Swarthmore. We sent people to Wharton (it wasn’t worth a damn), Columbia, Northwestern, and the Sloan Program at M.I.T. We tried to pick people who had the greatest potential to send to the programs. If you were coded blue on my chart that meant you had potential for two or more levels advancement. So if you were on the third level, this meant you could make it to fifth; you can’t figure these things too far ahead, so we didn’t appraise which third levels would make it to sixth level.

We had not hired anybody all through the depression and the war. The result was that in the 1950s all officers were within two years of each other’s age and two were older. This was the toughest job I ever had to do—bring in younger men. This meant promoting younger people over older people who were better qualified. If you need five you had to pick fifteen because you knew some would not make it. This was one of the most distasteful things I ever did in my life. Some of the guys who are officers today moved quite fast to solve this problem.---Lintz, Roberts, Piatt. This was done at all levels. It meant heartaches all over the corporation. People were held back for three or four years because of this. I knew what this was like because I was third level in the traffic department [operator services] for eleven years because there was no career movement during the depression and war; we were cutting back a lot. This was a period in my life where I was held back and frustrated, it was the result of the business cycle.

Anyway, back to the people you’re interested in; we adopted a policy that these guys who were moving fast had to stay at one job long enough that any of the curves they threw would come back to them. These young kids didn’t like this. A guy had to stay in one job until he licked that job, and you don’t lick a job in a year, it takes some time. By the way, the other side of this coin is that some people reach the top and stay in their job too long. I was in human resources too long; I told CEO Godfrey he had been on the job too long, not adding anything new.

Now, let’s see where was I, I told you about selection, I talked about training, oh yes, movement. If you move someone up a level you usually moved him into staff. Staff got paid less than line. Then you moved him back to line. As he moved up again, then back to staff. Also, we moved people around the state if they had potential. Leach was moved much too often. It affected his children; yes, much too often. He was a real sharp young fella, everybody wanted him, good talker, knew his job, did it well. He would have made a good marketing man. He is suited well for the public relations job he has now.

I was In on Hill’s promotion to the top office. He came up through commercial. Names have a bearing on these people getting ahead. Appearance makes a difference. He was a nice looking guy, makes a good impression, good talker.

The CEO before Hill, Mathews, was a perfect example of luck and age. He would not have gotten the job if he wasn’t younger than the rest of us. Mathews was a bright guy though he was different than the CEO before him, Godfrey. Both had come up through commercial. Godfrey had a lot more experience. Godfrey was better liked but could get tough with you. Godfrey was the better boss because he let you run your own job, he didn’t get involved in details. He never told me what to do and backed me up. You feel good when your boss backs you. Mathews did not do this, he was more inclined to get into details.

Mathews let his wife horn in on company affairs. She did not like some guy and it affected Mathew’s judgment. I was always strong on the rule that you don’t promote a guy because of his wife. There is no question that a good wife can help a man and a poor wife can hurt him. A wife could hurt a man by being obnoxious in public or at social events.

One last thing on this career stuff. Different companies will change as top men change. The stage of history the company is in determines what type of people it needs. When I came in the business top people were engineers and plant people because we had to build the network. Then after World War II top people came from commercial [customer relations] and traffic because we had a tremendous demand of phone service to fulfill. Now as we head into competition, marketing people are the most needed.

II. An Approach to Career Development in American Bureaucracy

The career development in this Bell organization during the post World War II years, up to and Including today, was as much a form of adaptation to one’s superior’s emotional needs and job standards as it was a development of one’s own self-control and expressive capabilities. The most illuminating fact of the eight months of full time fieldwork in this management society was the degree of distance between the standards enacted during subordinate-superior interaction and the standards enacted during informal conversations with a trusted, or at least temporarily trusted because of similar interests, collaborator. In discussions with each other most everything was analyzed in relation to the current problem at hand, coalitions formed and reformed according to how a particular problem affected individual interests. In discussions with me most people were willing to be “objective” about old bosses or even potential future bosses but most people had little negative to say about current bosses. The temporal frame of reference was primarily on the present. Personal attachments were strongest when they were currently employed, especially if concentrated on task responsibility or political coalitions.

The managers in the center, the ones with jobs that were vital to the organization’s success, were extremely careful of what they said, when they said it, how they acted, but at the same time the same strong ambition that enforced these strict codes of conduct and self-control also demanded recognition for their superior accomplishments and performance. And there was no better way of expressing one’s superiority than by exposing the inferiority of other successful managers.

Thus a tension always existed within the motivation of the individual. His belief in the need for status (i.e., to be shown deference) and his belief in the need for personal success and independence (i.e., individualism) were in conflict.¹ No doubt status seeking was the stronger motivation, since otherwise the individual would not have joined a bureaucracy to begin with. Hence, as we shall see, status is the main descriptive category in the study of American bureaucracy, but American individualism plays a strong role in defining the status category. Managers wanted to be shown deference, but they wanted to be shown deference because they were seen as successful and independent individuals. Therefore, the key to understanding career development in this American bureaucracy lies in the dynamic relationship of hardened individualism, emphasis on self-worth (in the utilitarian sense) and the need to be respected and honored by others, the need to be shown deference.

The result of a strong sense of individualism is that interpersonal relationships are based primarily on personal characteristics as opposed to rules and regulations or tradition. This Bell company is primarily characterized by emotive bonds and political coalitions. Authority is embodied first in the individual and second in his office. The office carries authority, but when viewed in the context of the whole corporate pattern of relationships, it becomes clear that the vital concerns of the company are given to individuals who have worked their way into the center group. If the environment changes and a particular job becomes more Important when It was not important previously, the occupant of that job will be replaced by an Individual acceptable to the ruling group. It is much more complex than “of course we want our best managers in the most important jobs” because “best managers” are ultimately defined by cultural standards; that is, the tasks of most, or large parte of all, jobs are to balance off competing interests. Hence, a “cooperative” manager means a manager who makes decisions that reflect the interests of the ruling powers (it is another issue what cooperation means horizontally, here we are talking about vertical cooperation because vertical relations are responsible for promotions and job movement).

Thus authority is embodied in the individual by his personal relationship to the ruling group. This leads us to the important conclusion that authority in this organization primarily took the form of a charismatic authority. Charismatic authority is an attribution of sacredness to the person. This differs from rational-legal authority which disperses the charisma throughout the hierarchy of roles and rules. Both authoritative systems ultimately rest on faith; but one has faith in the legitimacy of the individual, the other has faith in the legitimacy of the system of rules.

The American people are a charismatic people, our emphasis on individualism leads us to want heroes for leaders.² Our culture was formed around the individual’s relation to God not to his social group, since most of the first settlers came for religious freedom.³ Also, due to the continent’s physical isolation there was no fear of attack, which would contribute to the forming of strong social ties.⁴ We do not, fundamentally, run our government nor our large organizations by authority that adheres to the rules of bureaucracy, but by authority established on personal relationships. Kennedy, Nixon and Carter were all anti-bureaucratic leaders, each one set up personally authorized counter-organizations to do the job that the established bureaucracies were designed to do.⁵ Reagan, of course, is also anti-bureaucratic as is reflected in his belief to destroy much of the bureaucracy altogether “to put decision making back in the hands of individuals who know best” (read individual as charismatic authority).

The traditional concept of charismatic authority, the belief by the charismatic and his followers in the special gifts the charismatic has for order creating leadership,⁶ can be seen to be just part of an expanded concept of charisma. Charismatic authority, here, will be the belief in the legitimacy of concentrated personal authority of any kind.⁷ Since authority has life altering power—promotions, demotions, organizational restucturing—it has a certain amount of charisma associated with it always. What the subordinate responds to is not just the specific delaration of the incumbent of the role—as the definition of rational-legal authority would have it—nor the extraordinary personal qualities of the individual—as the psychologized definition of charismatic authority would have it—but the incumbent enveloped in the vague and powerful nimbus of the authority of the entire institution.⁸ The fire of a charismatic leader like Anwar Sadat does not die out after Sadat’s passing, but a flame continues to burn as long as a concentration of authority exists that provides order. Authority is the structuring element that gives order to any organization without which it could not exist as a collective body. This moves the concept of charisma beyond the realm of psychology and makes it sociologically applicable...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• I. Management as a Cultural System
• II. The Economics of Monopoly Management
• III. The Culture of Career Development
• IV. The Quality of Cooperation
• V. Conclusion: An Essay on Culture in Organizational Process
• Bibliogrphy
• Index