Since the Thatcher-Reagan era, a managerial orthodoxy has dominated organisational life. This mindset, focusing on efficiency, control, and the prioritisation of shareholders’ interests, has led to a loss of trust in organisations. It has also resulted in a rise in inequality, as the gap between the highest and lowest paid within companies has widened.
A study of UK companies between 1983 and 2014 found that the proportion of income going to the top 1% of earners increased from 5.7% to 15.4%. The top 0.1% saw their share rise from 1.3% to 5.9%. This is partly due to the shift from collective bargaining to individual contracts, which has given more power to executives at the expense of workers.
Reforms are needed to restore trust and reduce inequality. This includes greater transparency around pay and performance, and more involvement of employees in decision-making. There is also a need for a broader conception of corporate purpose, beyond just shareholder value.
The rise of social enterprises and the B-Corporation movement, which balance profit with social and environmental goals, offer potential alternatives to the dominant managerial orthodoxy. These innovative structures could provide a way forward, promoting more equitable and sustainable organisations.
Go to source article: http://blogs.lse.ac.uk/businessreview/2018/04/10/a-managerial-orthodoxy-dominates-organisational-life-since-the-thatcherreagan-era/