Responsible (project) management in an unstable world E Laszlo
The globaiization process in the world socioeconomic system leads to new challenges and opportunities for (project) managers. Projects impact on a given social environment. They bring benefits, if their objectives coincide with wider trends in that environment. The paper discusses how project managers should manage responsibly under these conditions. Keywords: globaii~ation, corporate power, trends, evolutionary strategies
At the beginning of the 1990s the world is at a crucial juncture in its history. There is a transition into a new kind of society, from nationally based societies to an interconnected and increasingly seamless global socioeconomic system. Standard answers are no longer relevant - classical assumptions about the nature of the contemporary world have collapsed. Not only have the rules of the game changed, but the game itself is new: it is now mainly economic and environmental rather than political and military. This world is no longer an arena of the struggle between capitalism and communism led by two superpowers - it is a more complex world, with more players. In addition to the USA and the USSR, there are now Japan and the ‘little dragons’ of Asia, and the Europe of 1992, with its 325M people and increasingly competitive technologies. The issue of environmental degradation has shifted from being of interest to marginal intellectual and youth groups to the centre stage of politics and business, and the situation Wiener Akademie ftir Zukunfts~agen, Porzellangasse 35, 1090 Vienna, Austria Paper based on a paper that appeared in Gareis, R Handbook of ~a~age~e~~ By Prujects Manz, Austria (1990)
of the Third World - now containing three-quarters of the world population - is becoming desperate. All over the world, extensive quantitative growth is giving way to intensive qualitative change. This is a major shift. Extensive growth can occur by linear accretion (more of the same can be accumulated), but intensive development is nonlinear and transformative. It affects the very structure of the system that undergoes it. It either evolves the system in which it occurs, or it destroys it. Will the intensive development of the last few decades end by evolving the complex sociotechnical systems in which it is occurring, or by destroying them? Both outcomes are as yet open. Scientific applications have raised human living standards for millions beyond all dreams and expectations, and the proper application of the new knowledge through forward-looking governmental policies and private-sector strategies could assure life and well-being for all people for generations to come. At the same time, social inequities, political stresses, and unreflective uses of technology are polarizing societies and degrading nature, and creating problems of global dimensions. The dangers of atmospheric warming and climate change, the attenuation of the ozone shield, the menace of deforestation and desertification, the destruction of many species of flora and fauna, the extensive pollution of air, water and soil, the poisoning of the food chain, and the malign underworld of drugs and crime, are threats that face all societies, in every part of the word. There is no lack of intellectual and economic Scientific resources to tackle these problems. breakthroughs and technological ingenuity have given humankind the capacity to overcome all challenges; global networks and markets could bring the benefits to all. Motivation is now needed to face the problems and
@ 1991 Butterworth-Heinemann
smooth the path of the present major transition. The business community carries its own share of the responsibility in this as the private sector has the greatest capacity for the constructive application of science and technology, and for assuring the beneficial functioning of worldwide networks and markets. Fate and fortune have combined to place unprecedented powers into the hands of contemporary enterprises, and, together with governments, these enterprises are now the fulcrum on which success in the current transition will turn. Managers, especially project managers, have a unique role and great responsibility in this regard.
PROJECTS AND THE GLOBALIZATION PROCESS The project manager is now operating in a business environment dominated by giant multinational and global actors. In the immediate post Second World War years, US corporations in search of profit pioneered the shift from the national to the international level of operation. The driver was the low cost of labour overseas. In the process, they transferred considerable knowhow and technology to the host countries. Competitive domestic industries arose in Europe and Asia, as well as in Latin some of the overseas America. Before long, companies, especially in Japan, caught up with, and even surpassed, their US counterparts in competitiveness. profitability and market share. Subsequently, the worldwide flows of information became another driver of the globalization process. Because information could spread rapidly from company to company, it became more difficult to build competitive advantage through the commercialization of inventions. In the early part of the twentieth century, research and development of new products led to profitable leadership positions that could be conserved, first through patents, and later through famous brand when the knowledge base of names. However, innovation became globally and almost instantly accessible, imitation quickly led to the dissipation of profits in new projects. As a result, firms turned to new forms of growth and profitability. On the one hand, they moved further downstream into consumer and service areas, and, on the other, they expanded horizontally, through mergers and acquisitions. This created further growth in the size, scope and geographic span of leading enterprises. The creation of multinational companies constituted one stage in the globalization of business; the next stage was the emergence of nonnational, i.e. genuinely global, corporations. By the late 198Os, no country was holding a monopoly on technology, capital, talent and innovation. In the continued search for profit and growth, internationally operating companies made breakthroughs in the laboratories of one country, placed shares with investors from others, and put the nationals of still others on a fast track to the too. Today, the management of global players reliesbn cashflow calculations rather than on national loyalties to decide where to shift oroduction and canital. The multinational economies of scale are complemented by global economies of scope.
Vol 9 No 2 May 1991
In search of profits and competitive advantage, enterprises became international, then multinational, and then global. However, in the course of this process, business has outgrown traditional modes of organization. If it is to remain efficient, and become a positive force in the contemporary world, a business must shift from hierarchical to network modes of organization, and from centralized corporate planning to decentralized multiple-project strategies. This is where the role of projects and of project managers becomes important. The globalization of business raises the spectre of the global concentration of economic, even socioeconomic, power. The handful of global players that now dominate entire sectors could transform the world economy into a pyramidal structure. If the market leaders were to be hierarchically organized themselves, a rigid decision-making chain would emerge, concentrating from the shareholders and the board of directors to the top executives of the global companies, and diffusing from top management to middle-level managers, employees, subcontractors, service companies, clients, and ultimately to the great mass of consumers on all five continents. Apart from the ethics of subjecting the majority of the world population to decisions made within closed circles and in light of self-centred considerations of profitability and competition, there is also the question of efficiency. Centralized corporate strategies are likely to be inefficient in a complex and rapidly changing evolutionary environment. The computer simulation of evolutionary strategies by dynamic-system theorists shows that success does not presuppose a hierarchical organization committed to carrying through a single master plan, but the availability of parallel-processing capability in the system, i.e. of active, simultaneous problem-solving activity by a collection of subsystems. These insights argue loudly and clearly for replacing hierarchical structures, defined as ‘tall’ organizational charts, by network-like structures, described as ‘flat’ charts. Such an ‘organizational revolution’ is, in fact, occurring among the most advanced of the global companies. As the motto of ASEA Brown Boveri claims, they are becoming ‘locals - worldwide’. Despite the concentration of market power in their hands, the global companies are decentralizing their operations. Whereas the multinationals of the 1960s treated foreign operations as distant appendages for the production of goods designed and engineered in their home country with a hierarchical chain of command, the advanced global companies are now network-like structures that do not command, but merely orchestrate, the efforts of their far-flung subsidiaries. The new global companies are diversified ensembles of a wide variety of enterprises, many of which are of modest dimensions.
SOCIAL EVOLUTION CONTEXT
AS THE PROJECT
Young people say ‘go with the force’. There is no determinant ‘force’ for project managers other than
success in carrying out the projects entrusted to them, but success itself can depend on whether the project is ‘in tune’ with larger trends and processes in the project’s environment. Every project is, at the same time, an economic proposition, a technological challenge, and a social system. It impacts on a given social environment, and brings it benefits if its objectives coincide with wider trends in that environment. The trends that hold sway today are not just local and temporal, such as are trends in fashion, or medium-term, or even a combination of demographic, economic and technological factors, such as the megatrends described by John Naisbitt. There are deeper trends as well, trends defined and determined by the evolutionary dynamics of complex systems such as contemporary technological societies. Project managers would be well advised to familiarize themselves with these trends, for coordination with them can enhance the chances of success in the implementation of projects, and render the projects more responsive to the problems of contemporary societies. Acquiring evolutionary competence in project management is not an unmanageable task. A new system of knowledge is now available about the basic trends that underlie the evolution of complex systems. The new sciences of evolution, and their allies: cybernetics, information and communications theory, chaos theory, dynamic-systems theory, and nonequilibrium thermodynamics, convey an understanding of the laws and dynamics of complex-system evolution, regardless of whether the systems are physical, biological, ecological or human. The new understanding contradicts facile views that the world would have reached the end of history, or that the future will be made by chance, or mere ‘bricolage’. The course of history, it tells us, has a logic of its own - a logic that is not rigidly predetermined, and yet not the plaything of chance. This logic governs the evolution of life on earth, and the evolution of matter in the observable universe. It also governs the evolution of human societies in the course of history. The evolutionary process is irreversible, chaotic, and nonlinear, but not unordered and haphazard.
LESSONS FOR PROJECT MANAGEMENT The evolutionary process is likely to continue in the future. A first extrapolation of the trend would suggest that societies will be more and more structured and complex, more effective and efficient in exploiting the energy flows of their milieu, and therefore more and more negentropic. Such a world, of course, cannot be structurally stable. Expectations that, beyond the current crisis, there will be an unaltering social, economic and political order are mistaken. Societies will remain vulnerable, both in regard to the rapid, and possibly radical, changes in the values, world views and expectations of their members, and to the equally rapid
and radical changes that powerful new technologies are likely to create in their physical, social and ecological environment. However, even if the future is likely to be as adventurous as the present, with sound foresight it could be made less hazardous. The present epoch of instability need not open the way to catastrophe; it could also yield to a new period of dynamic, rather than structural, stability. With sound evolutionary management, that period could be extended. Societies could be kept on a functionally stabilized dynamic plateau for a long time, if not, obviously, forever. Management can be more than a personal game of chance; it can be a game played with the developmental probabilities associated with the evolution of the complex systems within which contemporary businesses and projects operate. Managers, and project managers, need to inform themselves and act responsibly. In the 1990s responsible management no longer means merely efficiency, interpreted as doing a given job faster, and nor does it mean simply effectiveness, in the sense of doing a better job. Responsible management also means more than securing strategic advantage doing new jobs to increase revenues and competitiveness. Today, responsible management means all this and more; it means accessing information on evolutionary processes and impacts, and using the information purposefully, to coevolve the enterprise together with its wider socioeconomic environment. Responsible managers are informed managers. Scientists are gaining a remarkably accomplished understanding of complex-system evolutionary dynamics, but they are powerless to influence the course of system evolution. Managers, especially project managers, operate at the leading edge of technological innovations, and could have a crucial impact on the socioeconomic processes that decide the outcome of the major period of transition in which humanity now finds itself. They owe it to their companies, as well as to their clients and to humanity at large, to operate responsibly, for the shared benefit of all.
Ervin l.as.710, recipient of the Doctorat Ps-Lettres et Sciences Humaines of the Sorbonne University, France, as well as of several honorary PhDs, is the author or editor of over 50 books und 300 articles in over half u dozen languages. A member of the Club of Rome, the World Academy of Arts and Science, and the international Academy of Science, and editor of World Futures and the Journal of General Evolution, he has heid professorships of philosophy, systems science and futures studies in various univer,sities in the USA. former director of the United Nations Institute for Training and Research, he is currently founder and head of the General Evolution Research Group, science advisor to the Director-General of UN~CO, and Rector of the Vienna Academy, Austria.