Contemporary management theories and Catholic Social Teaching: similarities and differences.

The human person, searching for his own global orientation, needs decisive answers about the meaning of life. When the most interior of spiritual motivations are obscured, man is reduced to a productive machine, culture and ethnicity become 'useless differences and politics is 'maximized.' It is therefore necessary to rediscover a 'culture of work' which is not simply dictated by productive demand, but by the global needs of the person and civil society.

John Paul II, The Dignity of Work

Introduction

The purpose of this paper is to examine contemporary management theory in light of Catholic Social Teaching (CST). As markets become more global and competition increasingly fierce, and as advances in technology continue to redefine competitive advantage, management theories and styles are also changing. In our goal to compare and contrast CST with management perspectives, we begin by describing contemporary themes in management theory and industrial relations, followed by an examination of CST itself.

Contemporary Management Theories

One of the most popular current management theories focuses on the concept of the "learning organization" (31). Since the early 1990s, research on this important topic has proliferated (10). Indeed, a bibliographic review (7) found as many academic papers on organizational learning in 1993 as in the entire 1980s.

Let's begin with a brief explanation. As defined by DA Garvin, a learning organization is "an organization skilled at creating, acquiring and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights" (12). Easterby-Smith describes this type of organization as an ideal action- and change-oriented enterprise that maximizes learning (10).

One reason for the growing interest in the learning organization is its unique suitability for today's fast-paced, global and "hyper-competitive" business environments. Anderson (1) argues that from a strategic perspective, the learning organization is especially important in highly competitive situations because it builds the capacity to change strategies, to be creative, and to avoid a narrow and rigid dependence on the status quo. Baldwin, Danielson and Wiggenhorn likewise claim that "the dynamics of rapid change, heightened global competition and advancing technology mean that organizational success will be increasingly dependent on learning" (3).

Traditional strategy models, such as the Strengths.Weaknesses.Opportunities-Threats (SWOT) approach (1), have focused heavily on analysis and relatively lightly on the importance of creativity and innovation (14). Perhaps there was a time when this type of emphasis was acceptable, even appropriate. But competition in most industries is more dynamic now than it has ever been, and competitive advantage more fleeting, Especially in mature industries, successful new products are quickly imitated by competitors and advantage is temporary at best. Competitive industries are characterized by "the cycle of innovation -- imitation -- equilibrium" (35), as shown in Exhibit 1.

Under these circumstances of accelerated industry change and rapid diffusion of innovation, Liedtka argues that "today's product is no more than a temporary solution to today's customer problem -- it offers no hope for sustaining an advantage." Rather, the ability "to continuously build new capabilities is at the heart of competitive advantage" (21). In this case, the essence of competitive advantage focuses on identifying and developing organizational processes rather than on particular products or markets -- processes that produce meaningful and continuous learning and strategic innovation in the organization.

In short, the ability to develop an ongoing flow of innovation provides a path to competitive advantage in today's fast-paced environments. And this capacity to innovate is sustained by -- you guessed it -- organizational learning.

Catholic Social Teaching and the New Competitive Landscape

Thus, contemporary management theories emphasize the importance of an organization's ability to acquire and leverage knowledge that produces meaningful change and innovation. These are, in fact, the hallmarks of a "learning organization," as we've just described. Catholic Social Teaching echoes a similar theme:

Whereas at one time the decisive factor of production was the land, and later capital -- understood as the total complex of the instruments of production -- today the decisive factor is increasingly the person, that is, one's knowledge, especially one's scientific knowledge, one's capacity for interrelated and compact organization, as well as one's ability to perceive the needs of others and to satisfy them [29: paragraph 32]. (2)

In other words, both contemporary management theories and CST agree that the key to competitive advantage has changed and that the human person -- the employee -- now plays an increasingly important role in organizational success. Bartlett and Ghoshal make the following statement in a 1995 Harvard Business Review article, a statement strikingly similar to Pope John Paul II's quote above:

In the emerging information age, the critical scarce resource is knowledge... [not capital]. The implications for top-level managers are profound. If front-line employees are vital strategic resources instead of mere factors of production, corporate executives can no longer afford to be isolated from the people in their organizations (4).

Bartlett and Ghoshal also state that the new competitive landscape has changed the role of top management. The new role of management and "the most basic task of corporate leaders is to unleash the human spirit, which makes initiative, creativity and entrepreneurship possible."

The Human Spirit and the Learning Organization

So CST and contemporary management theories both stress the critical role of the human person -- the employee -- and the organization's capacity to utilize employee knowledge and ingenuity to change, innovate and grow. But initiative, change and creativity are outcomes -- the result of various processes and characteristics embedded in the organization. What are these characteristics and processes that foster the change and innovation that distinguish the learning organization? Furthermore, how does one unleash the human spirit in the organization?

A review of the management literature suggests that different authors stress different aspects of the learning organization. Easterby-Smith did an extensive search of the organizational learning concept and found six disciplinary perspectives on the topic, each with its own distinct contributions and viewpoints (10). Stepping back from the differing perspectives, and accounting for different terminologies but similar meanings, at least three characteristics of a learning organization consistently emerge: (1) human development within the organization, (2) information-sharing and collaboration, and (3) community-building.

1. Human Development within the Organization (for Continuous Learning).

One of the six disciplinary perspectives described by Easterby-Smith is the psychology and organizational development (OD) view (10). The central theme of this perspective is "human development within the organizational context." This theme focuses on topics such as how individuals learn, stages of the learning process, cognitive styles and obstacles to learning. Implicit in the theme is understanding that organizational learning depends on employees who are growing and developing on the job.

2. Information-Sharing and Collaboration.

A second perspective on organizational learning described by Easterby-Smith emphasizes information processing and sharing. This theme is also one of the "principles of learning" identified by Baldwin et al. These authors stress that organizational change is a shared responsibility, and that innovation and change require employee participation and involvement. "Innovation is much more likely to occur when people participate in the solution rather than having it handed to them" (3).

The information is not only made available, but is expected to be disseminated efficiently within the organization. As Garvin states, employees learn from the experience and best practice of other organizations, and are expected to transfer knowledge quickly (12). These activities are built into the systems, processes and culture of the organization.

This inclusive approach to decision-making and planning brings new voices, new perspectives and new energy to the process. It allows the organization to tap into the knowledge of its people. Gaining this input may be a key to competitive advantage, according to Bartlett and Ghoshal (4).

Information-sharing and collaboration are important for still another reason. The learning organization thrives on change, as we have discussed. But managing change can be a distinct challenge for organizations. Open, honest communication and ongoing employee participation are two great ways to overcome resistance to change [18].

3. Community-Building (a.k.a. Team-Building and Shared Purpose). Anderson (1) represents the views of many contributors to organizational learning research when he claims that a strong organizational community, that is, team building, is fundamental to the learning organization. "When there is no community, trust and respect are hard to maintain and performance is even more difficult to reinforce."