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PHILOSOPHICAL AND SOCIAL FOUNDATIONS OF MANAGEMENT

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					 PHILOSOPHICAL AND SOCIAL FOUNDATIONS OF MANAGEMENT PRACTICES AND
                           NEW PARADIGMS




           Abstract
           Recent developments in management have raised concerns about social and philosophical
foundations on new managerial paradigms. This paper investigates the nature of and motivation of
paradigm shift in management. Using content analysis of various secondary sources social and
philosophical foundations that caused paradigm shift in management are defined. New evolutions in
management have been caused by change in technology, globalization, increased concern for clean
environment, evolution of economic and social human rights, development of socially responsible
programmes, degree of social inclusion and accountability in society before various stakeholders.
Key words: management, paradigm shift, ‘normal’ science, modernism, post-modernism, fordism and
postfordism
           ÖZET
           Yeni yönetim paradigmaları konusunda, yönetimin sosyal ve felsefi temellerine olan ilgi
son zamanlarda artarak devam etmektedir. Bu çalışma doğası ve yönetiminde paradigma değişimi
motivasyonu araştırmaktadır. Yönetiminde paradigma kayması nedeniyle oluşan sosyal ve felsefi
temelleri belirlenen çeşitli ikincil kaynaklardan içerik analizi kullanma. Teknolojik değişim,
küreselleşme, temiz bir çevre için artan endişe, ekonomik ve sosyal insan haklarının evrimi, sosyal
sorumluluk programlarının geliştirilmesi, sosyal içerme ve hesap verebilirlik çeşitli paydaşlar önce
toplumda derecesi yönetiminde yeni evrimler neden olmuştur.
           1. Introduction
            The term of management has been known and used for millennia, but extensively it started
to get developed with Frederick Taylor, who is known as “father of scientific management” and
“founder of “classical theory of management” (Taylor, 1911) that was followed by neo-classical,
modern and post-modern theories of management. Seemed that everything possible in the field of
management has been already found and discussed in details; nevertheless, with development of
technology and change of ethics Kuhn’s ‘paradigm shift’ occurred in field of management. The
purpose of this paper is to provide philosophical and social foundations of management practices and
new management paradigms through defining the concept of paradigm and Kuhn’s writing on
‘paradigm shift’; looking at historical development of the concept and referring to debate among
authors on factors that caused managerial paradigm shift; illustrating the causes of the shift from
modernism to post-modernism and from fordism to postfordism; as well as defining the evolution and
applicability of the term ‘paradigm shift’ to management.
            A new paradigm is remarkably different from the main stream that has over the last century
become the accepted and dominant norm in the field (Ellis, 1992:16-18). To be a competitive and
successful organization some new way of management is needed, one that has the capacity to deal in
many different markets, be effective for the client and be productive for the investment manager. As a
result the need for established ethical frameworks and practices in business communities has never
been greater. Corporate social responsibility has also risen up the corporate agenda, as society is
increasingly demanding that corporations act responsibly. Consequently, corporate social
responsibility has been included in excellence models impacting on company reputation and corporate
image.
           The ‘paradigm shift’ also changes the demanded requirements towards organizations. The
new form of organization must be reliable and sustainable both for the client and for the manager. It
must allow individuals of considerable talent and pools of capital of large size to make long-term
commitments. The new paradigm organization is profoundly different on every important variable-
leading-edge investment innovation, strong client-centered relationships, devoting to product
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excellence in design and conformance in execution, strong business development, and exceptionally
rewarding careers for gifted, motivated professionals, with business strength the foundation for
professional excellence. The organization based on old paradigm cannot come close to competing with
the new paradigm organization. That is why, there is a need for the sake of a successful organization to
study and adopt new paradigms in management.
            A host of non-traditional methods are noticed in workplaces around the globe point to
revolutionary changes and “paradigm shifts” in work organization and managing people. It worth to
study the new “paradigm shifts” that help to understand and adopt to changes; so that be able to
survive, stay competitive in the global market and become among the key important players. Workers
are becoming owners and managing without supervisors. Personnel/human resource function is not
only decentralized, but personnel/human resource responsibilities are effectively devolved such that
the organization no longer needs a separate personnel/human resource department. Organizations are
functioning without traditional structures, separate quality boundaries, unions, personnel departments
or even a complete complement of full-time workforce. Numerous companies have not merely
responded positively to the challenges, but are confident that the changes rekindle the hope for many to
become global leaders. There are millions of reformers now.
            In the emerging economic scenario, the field of management is facing “paradigm shift” due
to five related changes: plan to market, import substitution to export-oriented growth, protection to
competition, sellers to buyers market, and from producer to consumer orientation. That is why, today
many state governments became far more responsive than before, because they need to attract
investment, create jobs if they are to remain in power for long (Ratnam, 1996:153-178). Moreover,
organizations try to understand and adopt new “paradigm shifts” in their management and have
changed their strategy not just to adjust to the changes, but aspire to become important players in
economic areas. As a result the world has seen societies graduating from predominantly to agricultural
to industrial to postindustrial or service and high-tech economies. Such transition and transformation
caused changes in worldview and results in a shift from:
         (a) land to money to information in wealth base;
         (b) muscles to machine-tending skills to mind in the dominant use of human skills/energy;
         (c) one-sided dependence to interdependence and independence in employment relations;
         (d) emphasis on fear to paternalism to fairness in motivational approaches;
         (e) direction and control to inducement (carrot and stick) to consensus and commitment in the
principles and philosophy of managing people at work.
            Some authors went further and argue that organization need not only to study and adopt
‘new paradigms’ in management, but also extensively and continuously search for new paradigms to
be a successful organization in competing world (Prahalad and Hamel, 1994:5-16). The fundamental
structural transitions in a wide variety of industries brought about by major catalysts such as
deregulation, global competition, technological discontinuities, and changing customer expectations
are imposing new strains on managers around the world. Old recipes do not work anymore. Managers,
concerned with restoring competitiveness of their firms, are abandoning traditional approaches to
strategy; they are searching for new approaches that give guidance in a turbulent environment. Many
academics, confronted with the same reality, are reexamining the relevance of the concepts and tools of
the strategy field. Academics continue to search for new approaches and believe that the need for
strategic thinking, during this turbulent decade, is greater than ever.
           Many of the assumptions that were embedded in traditional strategy models may be
incomplete and/or outdated as we approach the new competitive milieu. In the paper philosophical and
social argumentations and justifications on the need for strategic thinking and behavior among
managers will be provided. This reality should force the world to reexamine the traditional strategy
paradigms.
           During the last 10 years competitive space has been dramatically altered. The changing
fortunes of some of the largest and ‘best-managed’ firms of the 1970s and early 1980s, such as IBM,

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General Motors, Caterpillar, Xeros are attributable to the radical changes in their competitive
landscape and the inability of managers to foresee these changes. The problem is not unique to U.S.-
based firms, but European: DAF, Philips, Benz, and Japanese: Fujitsu, Matsushita, Komatsu firms also
face the same problem of refocusing their resources and responding to the new competitive realities.
That is why, there is need in search of new paradigms in management that would let to foresee and
plan projects in management that would make companies competitive and successful.
            Barberis claims that another reason for searching paradigm shift is change in social and
philosophical reasoning in contemporary society. With several recent scandals at the forefront of
business news, the topic of inclusion of business ethics into organization has become a major issue of
discussion. Thus, a major theme of reform efforts is the improvement of public-sector performance
through forms of accountability involving more direct connections between the providers and
consumers of public service, as well as incorporation of business ethics in daily organizational life
(Barberis, 1998:451-470).
            Another social and philosophical foundation in search for a new paradigm is based on issue
of survival of human beings. Approximately 80% of the world’s energy consumption is based on non-
renewable fuels (Williams, 1994:199-228). Eventually human being will run out of the natural capital
of fossil fuels. The emission generation resulting from the combustion of these fuels for energy is not
sustainable. That is why; the fossil fuel-based industry simply cannot contribute to sustainability.
Sustainable development ha an ethical dimension, as well as social and philosophical foundations,
because ethics is a cultural and normative phenomenon. Thus, Kuhn-driven paradigm shift model
contribute to sustainable development philosophy by taking the future generations and their
possibilities to have access to natural resources and ecosystem services into account; and survival of an
organization in competitive global market.
           2. THE CONCEPT OF “PARADIGM SHIFT” IN MANAGEMENT
            The main function of paradigms is to help to organize the process of science. They provide
direction for its development and help sort out facts in terms of their relevance. In the absence of a
paradigm, all facts are more or less relevant and this given the appearance of randomness to those
gathering the facts. The accumulation of knowledge requires an organizing framework such as
paradigm upon which the facts and ideas are organized (MacKenzie and House, 1978:7-23). Most
social sciences are still in the pre-paradigm or paradigm development stage, and they are likely to
remain in this stage indefinitely unless more persons begin to think carefully about their paradigm
development strategy.
            The term of paradigm originally comes from Greek and means “to show pattern that is
beyond”, which means something that is out of ordinary. The Merriam-Webster Online dictionary
defines this usage as "a philosophical and theoretical framework of a scientific school or discipline
within which theories, laws, and generalizations and the experiments performed in support of them are
formulated.” In difference to theory paradigm is being observed in scientific framework, but hasn’t
been accepted widely as a theory. Thomas Kuhn, a historian o science, in his book “The Structure of
Scientific Revolutions” defines the meaning in contemporary term (Kuhn, 1996). The scientist says
that paradigm shift is similar to the phrase "thinking outside the box". Thinking inside the box is
similar to thinking in the framework of normal science; while thinking outside means revolutionary
science according to Kuhn. At the beginning revolution science is unsuccessful and causes obstacles,
because of being extraordinary and standing out from the crow. Later, when paradigm is implemented
in large scale shifts and accepted by majority, it becomes the normal science and in its framework
science starts to progress.
            Science is the disciple that evolves and changes continuously. First, various paradigms are
discovered; later paradigm shift leads to shift within the scientific discipline and the whole scientific
world start to progress within the new direction. However, paradigm shift goes with difficulty in the
stable and mature sciences as physics. In 19th Century a physicist Lord Kelvin publicly announced that
"There is nothing new to be discovered in physics now. All that remains is more and more precise
measurement" (May, 1979:122–134). However, later in physics Albert Einstein published his paper on
special relativity that later became theory of relativity in physics and the whole science of physics


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moved to that direction (Einstein, 1916). The relativity theory challenged simple set of rules of
Newtonian mechanics that was used for over two hundred years as the basis of physics.
           Kuhn’s scientific revolution
            Thomas Kuhn, epistemologist and historian of science, defines an epistemological
paradigm shift as scientific revolution in his book The Structure of Scientific Revolutions. Kuhn
defines paradigms in The Structure as universally recognized concrete scientific achievements, with a
twofold function. They establish, inspire and foster particular coherent scientific traditions, and they
issue patterns and models of scientific research. They include as components law, theory, application,
and instrumentation together. Their study and repeated application initiate practitioners into specific
scientific communities. Paradigms are open-ended and are subject to further articulation and
specification in the course of normal science, that is itself a puzzle-solving activity induced by the
paradigms. During that period, scientists do not handle ‘genuine’ problems. Instead they build their
competence, working with paradigmatically provided projects, the puzzles, which are formulated in the
concepts and language of paradigms. Assembling the solutions, which is guaranteed by the paradigms,
is a mopping-up operation. Rather than investigating and revealing the world, the scientists test their
ingenuity and skills, increasing the accuracy and scope of the paradigms either in theory or in their
match with the world (Kindi, 1995:75-92). As a result based on rules of paradigm the scientists give
shape to the world and come to understand it.
            Most science is 'normal science', in which scholars accept the dominant paradigm of the
day, performing experiments that test and prove its efficacy in a range of situations. New explanations
may extend the paradigm but do not change its fundamental nature. In this way, the paradigm may
grow with many extensions to explain the various exceptional cases that are not easily covered by the
original paradigm.
             A scientific revolution occurs, according to Kuhn, when scientists encounter anomalies
which cannot be explained by the universally accepted paradigm within which scientific progress has
thereto been made. The paradigm, in Kuhn's view, is not simply the current theory, but the entire
worldview in which it exists, and all of the implications which come with it. When enough significant
anomalies have accrued against a current paradigm, the scientific discipline is thrown into a state of
crisis, according to Kuhn. During this crisis, new ideas, perhaps ones previously discarded, are tried.
Eventually a new paradigm is formed, which gains its own new followers, and an intellectual "battle"
takes place between the followers of the new paradigm and the hold-outs of the old paradigm. After a
given discipline has changed from one paradigm to another, this is called, in Kuhn's terminology, a
scientific revolution or a paradigm shift. It is often this final conclusion, the result of the long process,
which is meant when the term paradigm shift is used colloquially: simply the (often radical) change of
worldview, without reference to the specificities of Kuhn's historical argument.
           Kuhn used the duck-rabbit optical illusion to demonstrate the way in which a paradigm shift
could cause one to see the same information in an entirely different way. As is frequently the case
when new ideas are presented, Kuhn took an existing term and gave it a specialized meaning. The term
paradigm now occurs frequently in every kind of discourse, usually to mean something like "way of
thinking" or "approach to a problem."
           Eventually a new and perhaps simplified paradigm is explored and proposed which
challenges the existing paradigm. New methods may be used as new theories are proposed and proven.
This work is outside of the canon of normal science and assumes that the dominant paradigm is
probably not fully true in certain circumstances (Kuhn, 1970).
            The Structure of Scientific Revolutions (SSR) was originally printed as an article in the
International Encyclopedia of Unified Science, published by the logical positivists of the Vienna
Circle. In this book, Kuhn argued that science does not progress via a linear accumulation of new
knowledge, but undergoes periodic revolutions, also called "paradigm shifts" (although he did not coin
the phrase), in which the nature of scientific inquiry within a particular field is abruptly transformed. In
general, science is broken up into three distinct stages. Prescience, which lacks a central paradigm,
comes first. This is followed by "normal science", when scientists attempt to enlarge the central
paradigm by "puzzle-solving". Guided by the paradigm, normal science is extremely productive:

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"when the paradigm is successful, the profession will have solved problems that its members could
scarcely have imagined and would never have undertaken without commitment to the paradigm."
           Kuhn does at least somewhat endorse: that the language and theories of different paradigms
cannot be translated into one another or rationally evaluated against one another — that they are
incommensurable. This gave rise to much talk of different peoples and cultures having radically
different worldviews or conceptual schemes — so different that whether or not one was better, they
could not be understood by one another (Kuhn, 1970).
           Applicability of Kuhn’s ‘paradigm’ to Management?
            Referring to Kuhn’s statement a question arises on applicability of Kuhn- derived paradigm
shift model to management, which is a social science discipline (Kuhn, 1996). Management as social
science refers to “the act of getting people together to accomplish desired goals and objectives using
available resources efficiently and effectively.” In preface to "The Structure of Scientific Revolutions”
Kuhn states that he wrote this book precisely to show that there are no, nor can there be any, paradigms
in the social sciences. The author doesn’t consider the term of paradigm being applicable to social
sciences, because in difference to natural sciences there is nothing exact and commonly accepted
within social sciences. Even the terms within social sciences are defined in different ways, and there
are always various alternatives to each school of thinking.
            On the other hand M.L. Handa develops ‘social paradigm’ and describes that paradigm shift
also happens within social science, where people’s perception of reality changes (Handa, 1986). Social
scientists started to apply Kuhn’s “paradigm shift” to show how values, worldview of society about
surrounding reality changes. One of such striking examples would be equality and increasing
significance of individual in management. Based on this we can say that cultural background and
historical experience have great impact on dominant paradigms within a community.
           It might be argues that the word paradigm is one of the most abused and overused words
today. However, as Thomas Kuhn’s sense of a scientific paradigm the term can be used as the
dominant social paradigm of modernity and to reflect the possibility of sustainability or sustainable
development of this thinking. This kind of philosophy sees that the normal everyday action of social
actors, managers, public organizations, private companies and individuals is carried out within a
commonly held set of ideas and practices. This set of beliefs, norms and standard practices constitutes
the paradigm of these actors and of various societal institutions. Dominant social paradigms are based
on the background and frame the action of social actors. Thus, they form social worldview and policies
implemented in organization.
      3. PHILOSOPHICAL AND SOCIAL FOUNDATIONS OF NEW PARADIGMS IN
MANAGEMENT
            There are philosophical and social foundations that caused ‘paradigm shift’ in management.
Historical developments define such causes. Since industrial revolution different philosophical and
social foundations were used in management practices. In classical theory of management that is
considered to be mechanic the priority of production over human being is emphasized (Walonick,
2011). Workers are considered to be an additional part to the whole production process. Such
tendencies were dictated by social tendencies of that time and industrial boom, where the machines
were more expensive and more valued than human beings. Within classical theory the authoritative
type of management prevailed, where every decision came from top and was implemented in middle
and below chains. Moreover, top-management even defined what, when and how workers should work
in order to have efficient and effective production.
           Later, in neo-classical theory, modern and post-modern theories pay more attention to
human beings, where the counter theory of Z to X was formed. According to Z theory that is widely
applied in Japan more flexibility, discretionary power and space for creativeness should be given for
human beings. Production should be oriented towards the process, but not the results that can be
achieved at expense of workers. That is why, at later stage we see certain “paradigm shifts” in
management such as: jobs should fit people, not vice-versa at it used to be; more autonomy to workers
and their participation in decision-making process; cross-dimensional work among departments;

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cooperation with nature; increasing emphasis both on quality and quantity; the organic structure and
unit of the organization (McNamanara, 2011).
            Another reason is the change within society itself. There are many views regarding the
challenge of implementation of socially oriented programs in management. Cordiero asserts the
development of ethical behavior in managers ought to be grounded in their development as leaders,
“ethics is not something a manager ‘does’; it is something that a manager ‘is’” (Cordiero, 2003: 265-
277).
           Moir defines that corporate social responsibility has proven impact on business
performance. He says that corporate social responsibility is the continuing commitment by business to
behave ethically and contribute to economic developments while improving the quality of life of the
workforce and their families as well as the local community and society at large (Moir, 2001:16-22).
Consequently, it can be argued that corporate social responsibility impacts company reputation and
corporate image, and can be viewed as an integral component of at least some models of corporate
identity. Christiensen and Askergsaard argue that “corporate identity should uncover the true
‘character’ or ‘responsibility’ of the organization behind its various appearances” (Christiensen and
Askergsaard, 2001:292-277).
           Driving forces of “paradigm shift” from modernism to post-modernism
           Within this chapter we will provide the reasons that have caused “paradigm shift” in
contemporary management since 1960s. First of all, technological developments and increasing
telecommunications have provided an arena for diverse values, perspectives and expectations among
workers (Small, 2006:195-211). The impact of IT can be viewed from so called “twitter revolutions”,
when the ideas are being transferred and implemented very quickly. In our days public consciousness
has become more aware of the things changing around them and due to that public started to claim
organizations to be more socially responsible.
           Moreover, due to development of public international law people got higher legal
protection at workplace. With acceptance of Human Rights Declaration of 1948; Millennium
Development Goals, International Covenant of Civil and Political Rights of 1966 and International
Covenant of Economic, Social and Cultural Rights of 1966 those were signed by representatives of
third world countries gave the legal basis to claim organizations be responsible not only to their
stakeholders, but also to wider range of people.
            Due to changes of world view among workers the organizations had to adopt a “paradigm
shift” as a result of which they have to become more flexible, sensitive and adaptable to the demands
and expectations of wider range of stakeholders, including workers. Many organizations have
transferred from the traditional top-down, rigid and hierarchical structures to more “organic” and fluid
forms.
           Also, due to globalizations and organizations becoming transnational, increasing size of
organizations and having branches in different parts of the world today’s leaders and managers must
deal with continual, rapid change and cultural differences of workers. Managers cannot any longer
make a plan beforehand and apply that plan. Because of continuous changes in the world managers
have to be flexible, continuously review the previous plans and respond to changes quickly. So, the
change should not be controlled, but rather should be understood, adapted and guided to the
advantageous side of the organization whenever it is possible.
           The increasing flow of information doesn’t let the managers to know about all changes or
reference resources for every situation. That is why, some part of discretionary power should be given
to workers and managers must rely on and listen more to their employees. Consequently, new forms of
organizations are becoming more common, such as: organizations being more environmentally
friendly, worker-centered teams, self-organizing and self-designing teams, worker empowerment and
others.
          Another driving force in paradigm shift is financial reporting. Many historians regard
accounting system as critical to the development of modern society: they brought rationality to
emerging capitalist economy (Carruthers and Espeland, 1991:31-69) and legibility to modern state

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before its society (Scott. 1998). As important they made the operations of both private- and public-
sector organization’s more transparent and controllable. That transparency not only fostered more
effective management, but also became the major tool for evaluating the enterprise in the open market
and facilitating the oversight and auditing of government agencies.
           From Fordism to post- Fordism
            Fordism and post-Fordism have to do with production and organization of industry, but
they are typically extended to cover social and political aspects as well. Fordism was the standard
method and process in the rise of the industrialization of developing nations as it focused upon
efficiency of mass production, whereas post-Fordism is typically applied to contemporary times as the
old style has become less efficient in the face of new technological advancements.
             The basic principles of Fordism were the foundation of a large processing plant marked by
inflexibility in a process that was overseen by a bureaucratic and hierarchical managerial system. A
semi-skilled labor force was employed for highly specialized and repetitive tasks. The overriding
social and political component of Fordism was that it focused on protecting the national market: it
sought to keep jobs within its own borders with the purpose of selling mainly to citizens of its own
country.
           Henry Ford is credited with the invention of the automobile, but like other heroes of
invention that is mainly myth. While Ford wasn't quite the thief that Thomas Edison was, he didn't
actually single-handedly make the first car. In fact, Henry Ford's greatest claim to fame isn't the
product he made but the manufacturing process he came up with to make that product. His assembly
line process was truly revolutionary and soon spread to other industry as well. Ford's efficient process
was quickly seized upon as the organizational key to sustained economic development. Fordism
forwarded the idea of centralized control, standardization and the ability to foster and meet the needs
of mass consumption of goods and services. Interestingly, this idea was also central to Soviet style
economics.
            Post-Fordism refers to the age of technological advancements that have transformed the
mechanics of production. The primary feature of post-Fordism is the recognition that the large-scale,
bureaucratic organization doesn't apply and, in fact, hinders the process. The post-Fordist ideal can be
seen in the streamlining of the management system in which there is greater flexibility, leaner work
forces and specialization within an entire company. In addition, the mentality of Fordism was wholly
focused on mass consumption: building an entire car to be bought by millions. Post-Fordism is
concerned with consumer choice and the segmentation of the marketplace. The basic principles of
post-Fordism would be introducing more flexibility and decentralizing the manufacturing process
while reorganizing the labor force itself to do away with traditional blue collar class that would be
outsourced to contracted employees. There is a higher emphasis on personal consumer tastes and
individuality rather than seeing the consumer force in terms of a collective homogenized entity.
Another vital difference between Fordism and post-Fordism is that the latter views the economy in
global terms, eschewing the national interests that were marked by the glory days of the Fordist
approach following World War II.
            Both Fordism and post-Fordism are still actively engaged in the U.S. economy. The
technology sector has obviously embraced the ideals of post-Fordism, but the old style is still the
preferred means for many companies. The bigger the company and the more mainstream its product,
the more likely it is to hang onto the Fordist ideals of management. Everything from automobiles to
fast food is constructed on the assembly line process perfected by Henry Ford. But the post-Fordist
way of doing business is definitely making inroads and will continue to do so.
           Diversity management- a new organizational/management paradigm
           One of the main ‘paradigm shift’ is affirmative programs for minority workers at
organizations. Cox and Smolinski suggest that managing diversity may result in higher organizational
productivity, and ultimately in higher profit (Cox and Smolinski, 1994). The effectively managed
workplace diversity can create a competitive advantage in the areas of cost, resource acquisition,
marketing, creativity, problem-solving and organizational flexibility. Empirical research supports the
notion that diversity management can have a positive spillover effect in the workplace. In a recent
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replication of the Heilman study it was found that women hired in organization which valued diversity
were seen as more qualified for the jobs which they held (Heilman, Block and Lucas, 1992: 536-544).
Creating a culture which values and appreciates differences requires major, systematic, planned change
efforts. Diversity management has been considered a new organizational paradigm in that it moves
beyond a human resource model based solely on legal compliance to on that suggests there is inherent
value in diversity.
            Cox describes an organizational continuum in terms of diversity initiative implementation,
comprised of three types: monolithic, plural, and multicultural (Cox, 1991:34-47). In monolithic
organizations, the extent of commitment to affirmative action is the existence of an affirmative action
plan. In plural organizations, minorities may be more aggressively recruited and promoted, but are
ultimately expected to assimilate into the dominant culture. Plural organizations espouse affirmative
action to the exclusion of initiatives which promote true employee integration. The multicultural
organization represents the ideal, a place in which differences are appreciated and used to gain
competitive advantage. Multicultural organizations are suggested to promote both attitudinal and
structural integration of minorities and to effectively manage corporate diversity.
           Cox and Blake identify the following arguments for managing cultural diversity to achieve
competitive advantage (Cox and Blake, 1991: 45-56). Those are:
           1. cost-reducing turnover and absenteeism
           2. resource acquisition-attracting the best personnel as the labor pool shrinks and changes
           3. marketing-bringing insight and cultural sensitivity to the marketing effort
           4. creativity- increasing creativity and innovation
           5. problem solving-bringing a wider range of perspectives and more thorough critical analysis
           6. system flexibility-reacting to environmental changes faster and at less cost.
           There are lots of examples that prove positive impact of diversity management on overall
organizational functioning, and some striking examples are:

              Avon Corporation - Turned formerly unprofitable inner-city markets into among the most
               productive U.S. markets by giving Black and Hispanic managers substantial authority
               over those markets (Cox and Blake, 1991: 45-56);

              Toyota Dealership (Miami) Integrated cultural awareness through respect, targeted
               advertising, bilingual sales people, and special events to break down barriers. Increased
               sales by 400% over six years; captured more than 50% of the Miami Hispanic market
               (Kotkin, 2001:44-52).

              Volkswagen Dealership (San Francisco) - Used cultural sensitivity training to achieve a
               five-fold increase in overall sales per month. Understood role of Chinese family elders as
               ultimate decision makers for major purchases (Kotkin, 2001:44-52).

              Dupont - African American employees recently opened up promising new markets for its
               agricultural products by focusing on African American farmers. The multicultural team
               gained about $45 million in new business world-wide by changing the way DuPont
               develops and markets decorating materials. The team recommended an array of new
               colors that appealed to overseas customers (Labich, 1996:177-178).

              Konrad and Linnehan (1995) found that legal interventions were most strongly associated
               with those organizations that had the lowest percent ages of either females or people of
               color. However, lawsuits do not have to be the moti vating factor for firms to act. Newly
               appointed CEO at Procter and Gamble, John Pepper, is committed to increasing
               organizational diversity as a means of attracting the best talent and serving diverse
               markets (Labich, 1996:177-178).


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            The intent of diversity management is to foster enhanced employee integration.
Management must have both an understanding and a commitment to including ethical principles in the
decision making process. A clear view of these principles and how they relate to diversity management
can facilitate appropriate and relevant diversity management decisions. Diversity management cannot
depend solely on laws, since compliance represents only minimum acceptable standards of behavior.
Ethical behavior focused on diversity management takes knowledge, commitment and work beyond
the law.
           Service based economy requires employees who can successfully relate to customers in
diverse markets, while an increasingly global marketplace necessitates cultural understanding on the
part of vendors and customers alike. Organizations which do not make diversity a strategic objective
may experience inability to sell in diverse markets, a tarnished organizational image as a result of
discriminatory lawsuits, and ultimately, demise. The fact that the future labor force will be comprised
primarily of minority members, combined with the fact that a future labor shortage is expected across
all job categories. makes valuing employee differences an even stronger organizational mandate
(Jackson and Alvarez, 1992).
           4. ‘Paradigm shift’ in contemporary management
            Recent development in technology, deregulation, environmental concerns and other factors
pressured for radical rethinking. Prahalad and Hamel provide several factors that that led to
inevitability of industry transformation and as a result to paradigm shift in management (Prahalad and
Hamel, 1994:5-16).




            Deregulation in the airline industry, telecommunications and financial services industries
caused specific changes within management. The profitability of industries, the pattern of competition
and market opportunities have been influenced by deregulation. These industries in turn influence a
host of other existing and emerging industries.
            The revolution in industries such as the computer industry is driven as much by structural
changes brought about by technology and customer expectations. The new computer industry is very
fragmented. Intel and Motorola dominate the component business; Compaq, IBM and Apple are big on
hardware and Microsoft dominates the operating system. This structural change from vertically
integrated, mainframe-oriented, centralized computing environment to a decentralized, fragmented
structure caused radical changes for competition and the economics of the industries.

                                                                                                     9
           Excess capacity invites radical restructuring of industries. During the last decade, a wide
variety of industries- from customer electronics to automobiles- were faced with excess capacity.
While the industry is burdened with excess capacity, additional capacity is being added by newly
developing countries such as China and India. The global restructuring of capacity is likely to emerge
as a major issue during this decade.
           Mergers, acquisitions and alliances have been used as a method of coping with excess
capacity as a way of accessing closed and public sector markets.
            The emerging concerns over the impact of industrialization on the environment have been
significant. The idea of being environmentally friendly, or 'green,' will have an impact on all aspects of
the business-from the conception of products and services to use and subsequent disposal by
customers.
           Explicit restrictions to global trade are being dismantled. While countries and regions still
protect industries, overt attempts at protectionism are becoming less tenable.
            Dramatic changes in technology not only impact existing industries but spawn new
industries as well. The evolution of the PC and the software industry, for example, is altering multiple
industries-consumer electronics, education and entertainment, as well as office work. In combination
with changing customer expectations, technological discontinuities will usher in new customer benefits
at prices that would have been impossible to imagine.
          The evolution of regional trading blocks, the European Community, NAFTA and ASEAN
change the basis and patterns of trade. Issues such as location of investments, creation of logistics
networks around the world, and costs are influenced by these emerging relationships.
           Global competition is pervasive. From semiconductors to cleaning services no industry is
free from the impacts of global competition.
           Inclusion of ethics and humanities into management programs
            According to Michael W. Small current business schools teach students to prioritize
material things over spiritual and prepare them to choose only advantageous employment for them
(Small, 2006:195-211). Also, according to a survey of London Business School in 2004 among 100
executives in 20 countries it was found out that managers prefer students that are familiar with other
inter-disciplinary subjects such as interpersonal communication, courses on leadership and cross-
cultural management studies, and the ones, who have relevant job experience, from where they have
got positive feedback and showed their potential and aptitude. In short term it might be gainful,
however in long-term such thinking would have negative impact. As a result, in current days we see
that many programs, including business are becoming more interdisciplinary, rather than staying as a
separate branch. Based on the result so the research done by Small among current and graduates
students, as well as their lecturers and mangers the following subject clusters were advised to be
included into business curricula: “ethics and business law, social and industrial history, politics and
political theory, industrial and organizational psychology, sociology and social anthropology,
development of technology and communication studies” (Small, 2006:195-211). Within his research
the author proves that inclusion subjects from different departments would make students more
adoptable in future and prevent subjects from being too narrow.
           Even though the philosophical and social foundations of the concepts of moral direction,
moral theology, virtue, goodness and wisdom were laid down since ancient times, nevertheless they
were ‘outsiders’ of mainstream thinking within management. Some authors, such as Alexander refers
back to ancient philosophy and writings of Hippocrates (460-357 BC) and claim that the new
“paradigm” of providing a healthy work environment for workers was also highlighted in writings of
ancient philosophers (Alexander, 2003:67-76). Hippocrates introduced his primum non nocere or ‘do
no harm’ principle, which means that organization should be able to compete in modern world, but
without harming innocent people and not at the expense of their employees.
            The developments of middle ages also provide philosophical and social foundations for
better treatment of employees at work places. One of such striking examples is Sir Thomas More

                                                                                                       10
(1478-1535), whose writings were influenced by Plato’s Republic (More, 2006:199). Within his book
“Utopia” the author provides 2 different perspectives on life in England. In the first part he describes
England at that time, when corruption and tyranny flourished, workers were treated badly and their
human dignity was completely ignored, and where wealth was held within hands of few people. In the
second part he described a different society, where tyranny was abolished, private property didn’t
exist; labor looked more favorably and employees were treated as equals. His writings latter were used
as basis for reforms within England and had impacts in building contemporary management of
England.
             Changing nature of work environment as a “paradigm shift”
            Another “paradigm shift” took place within the changing nature of work due to
advancements in technological science and building areas. Work is becoming increasingly technology
driven with impact on both content and contexts. The changing nature of work would present
significant contrasts if we compare the work and life of a farmer and a fisherman with that of a miner
and a factory worker and that of the latter’s with white-collar employees in high-tech offices and
modern professions. V. Ratnam provides the table of “paradigm shift” within changing nature of
management at work places (Ratnam, 1996:153-178):

              Robotized work places (assembly operations)
              Unmanned work stations (work plants)
              Officeless work (journalists in newspaper industry or sales professionals)
              Open 24 hours, 365 days a year (be it factory, bank or a restaurant …)
              Contract for work to contract of work
              Employed worker to independent contractor
              Dependent/interdependent to independent worker
              Permanent to temporary
              Office to home
              Fixed to flexible hours of work
              Jobs as property to jobs for prosperity
              Life-time employment to life-time employability
              Single task/single career to multiple tasks/multiple careers
              Individual to team
              Functional to cross-functional
              Ladders to loops
              Managers to facilitators
              Fordist Taylorism to Neo-Fordist Toyotaism
              Sequenced/segmented approach to parallel/circular work organization
              Autonomous hierarchies to interdependent partnerships
              Employee as a servant to employee as a partner/(internal) customer
              Loyalty to competence (ies)
              Norms to values
              Managing to leading
              Control to commitment

                                                                                                     11
                 Direction to empowerment
            These are not just words and phrases. These are the ideas contained in the literature on the
world of work which are based on concrete experience in several workplaces. A major problem,
however, concerns the increasing informalisation of work. Short-term solution like overtime, contract
work and others create eventually bigger problems that often go out of the control management. As a
result of these changes ‘paradigm shift’ happened in field of corporate consciousness that Campion and
Palmer (Campion and Palmer, 1996:389-400) defines as “a set of consciously held, shared values that
motivate and guide individuals to act in such a manner that the interests of the corporation are balanced
against its obligation to be responsible for the effects of its actions upon society, the environment, and
the host of interested stakeholders.
             Changing technology and globalization as driving forces of “paradigm shift”
            Modern technology made finite capacities- sight, speech, travel and effort of human
infinite. New technologies, new materials, new processes and new methods revolutionize the world of
management at work places.
           Micro-electronics and mobile communications revolutionized the world we live in, the way
we work and the way we live. Fax, e-mail, internet and pagers, among others, have revolutionized
communications at workplace and beyond the workplace. The differences in time and space have
shrunk incredibly. Production workers comprise no more than about 15 per cent of the total workplace
in today’s modern, high-tech factories. Even in defence services, hierarchy is becoming less important.
Consequently, changing technology of work caused changes in work organization.
            Another social factor that caused paradigm shift is globalization of organizations. Many
companies are increasingly joining in temporal limited projects to perform joint product developments
or joint marketing activities. In such cases the dilemma is often revealed when multi-national
companies try to define a single best way for a system from head office in the home country and try to
impose it as the universal system throughout the world. Based on social foundations and depending on
cultural differences each case in considered individually and specific approach is applied. For example,
the Chinese appear to have a strong preference for small family-owned business as in Taiwan and
Hong Kong, while in US the preference is given on average to much larger (Moon and Woolliams,
2000:105-115). Cultural differences exist even in perception of the same product in different societies.
Studies on Sony Walkman show that Americans perceive it as a product they can use to listen to music
without being disturbed by others, whereas in China it is perceived as a product they can use to listen
to music without disturbing others. In an individualistic culture, the freedom of the individuals comes
first and serves society. Society is thought to improve because individuals have their freedom to
improve and develop. In a communitarian culture, we take care of society even at the cost to individual
freedom. In a multinational company based in an Individualistic Culture emphasis is made on the
individual, differentiation of one individual from another is made and some personnel as having
achieved high and other low is stated. If this pay scheme is implemented in a communitarian culture
the effect of breaking up the group identity may result in disastrous consequences. In such a culture the
pay should depend on the overall performance of the whole group or even go to the group member
with the greatest need. As a result Moon and Williams defined several factors that should be taken into
account in diversity management paradigm:
             a.      Meanings of rights given to individuals compared to groups
             b.      Meanings given to the degree of involvement in relationships
             c.      Meanings given to body language and other non-verbal leakage
             d.      Meaning given to status
             e.      Meaning given to time
             f.      Meaning given to nature




                                                                                                       12
           Implementation of ‘paradigm shift’ in management and managing diverse cultural
perceptions help managers to develop their competence for doing business and managing across the
world.
           “Paradigm shift” in management at workplace
            Since 1980s the sphere of management has been changing. Product life cycles were
shrinking, employment intensity was shrinking; enhancing competitiveness under the circumstances
focused attention not merely at macro environment, but also manufacturing itself. Some have begun to
argue that the era of mass-production is over and needs to be replaced with some new form such as
flexible-specialization, lean production and beyond, Toyotaism or post-Fordism.
            Due to continuous changes within management we have lots of new concepts in
management of manufacturing, such as Total Quality Management (TQM) on quality, Just in Time
(JIT) on cost control, ISO on systems and Advanced Manufacturing Technology (AMT), Lean
Production (LP) on responsiveness to the market demand. The strategies are both competitive on cost
and quality and responsive to market needs. Such advancement in technology requires newer
approaches to work organization. They warrant a shift in focus from control of worker under
traditional manufacturing to control of work under modern methods of manufacturing. Supportive
changes in human resource and employment practices need assessment and application. Japan has
overtaken the western countries in adopting new, advanced, flexible manufacturing systems.
           As a result there are several revolutionary changes/ ‘paradigm shifts’ in management,
which are (Ratnam, 1996:153-178):

                Managing without managers

                Supervision without supervisors

                Managing without traditional structures

                Managing without traditional owners

                Managing without unions

                Personnel management with personnel managers

                Managing without quality boundaries

                Managing without a complete, full-time workforce
           The import of these non-traditional methods is that the traditional personnel function is
undergoing transformation. Many organizations have created separate HRD units/departments to give
special thrust to the neglected development role of personnel. There is a decisive trend towards not
only greater decentralization, but also greater devolution of personnel/human resource functions back
to the line manager. Employees are not employees in all cases any longer. They are independent
workers, internal customers, partners. Far from being a slave of yesterday an employee has already
come to be treated as an internal customer. In creative organizations, employees walk in with
assignments and walk out with assignments. They do not want to remain wage labour or salaried
employees. They want to be treated as partners, getting royalty than just salary or a rightful share in the
profits.
           New “paradigm shift” in investment management
            The new paradigm is remarkably different from the paradigm that has, over the last quarter
century, become the accepted and now dominant norm in the field. The presently dominant paradigm
is a specialist manager with one investment "product" serving one market, usually pension funds. The
developing new paradigm is a multimarket, multiproduct organization. My thesis is that because the
new multimarket, multiproduct organization-when properly led and managed-is more consistently
capable of meeting the long-term needs of clients and investment professionals, it will be increasingly
accepted and will become the norm.

                                                                                                        13
            Ellis in his writing states that all spheres of management has evolved and changed,
including investment management. Starting from 80s with development of technology and expansion
of business a global or international manager can concentrate on the Pacific Rim, on Europe or Latin
America, on the emerging global markets or on any specific part of the world (Ellis, 2004:17). As a
result, the author makes several statements on contemporary management as some new way of being
organized is needed, one that has the capacity to deal in many different markets. It must be effective
for the client, and it must be productive for the investment manager. It must be capable of dealing
successfully with multiple products. As it must be a multimarket-capable organization, so it can access
business from many sources.
            The new form of organization must be reliable and sustainable both for the client and for
the manager. It must allow individuals of considerable talent and pools of capital of large size to make
long-term commitments. This multimarket, multiproduct investment management organization meets
several needs of major client- product specification and product conformance, product innovation to
meet new needs or exploit new opportunities, the confidence and convenience that goes with long-term
professional relationships, possible lower costs, and relationships that are “client driven” rather than
“product driven”. Also, this organization better meets the needs of many investment managers, for
professional growth and creativity and financial security at high pay level- without betting their
business careers as well as their professional reputations on a single way of investing in a single asset
class. And as product specialization and market segmentation proliferate, an increasingly large share of
new products and new markets will be developed by the organizations that master the new paradigm.
In fact, these new organizations are already dominating new product development and new market
development.
            Three concluding observations seem important. First, the new paradigm will not overwhelm
all the boutiques. The best specialist firms will continue to prosper-but it will be more and more
important to be very, very good. Second, not all of the multiproduct, multimarket organizations will be
assured of success. Only those that produce consistent product quality and service quality will succeed.
Finally, the new paradigm is certainly not "just" a return to the old "balanced manager." The new
paradigm organization is profoundly different on every important variable-leading-edge investment
innovation, strong client-centered relationships, devotion to product excellence in design and
conformance in execution, strong business development, and exceptionally rewarding careers for
gifted, motivated professionals, with business strength the foundation for professional excellence. The
old, old paradigm trust department or insured plan couldn't come close to competing with the new
paradigm organization.
           “Paradigm shift” with environmental dimension
            Since industrial revolution nature and resources were considered to serve human being and
no care was taken towards them. However, last two decades when resources were declared to be
limited issue of preserving nature became central. Egoz in her articles ‘Clean and green, but messy”
provides new productionist paradigm that describes the changed production attitude towards nature
(Egoz, 2000:63-74). The changes in the organic agriculture movement occurred for example in New
Zealand in the 1990s within the context of the world phenomenon of ‘corporate greening’ which is
defined as an attempt to satisfy high value niche consumers who desire green products. The Organic
Agriculture Movement was incorporated into an industry and became internationalized when large
found the New Zealand Organic Agriculture Movement structure suitable for export programmes. This
step resulted in some legitimizing of the concept of organic production amongst conventional farmers,
producers and companies.
            The organic farmers are motivated by a philosophical view which expressed a liking for a
naturalist form of landscape and a clear dislike for the geometric ‘rational’ landscape. The organic
movement is moving towards the mainstream because of the work of corporations which represent a
contradictory world view that of a reliance on sophisticated technology and industrialization.
Nevertheless, such writings on papers as ‘made from farmed trees’ shows the increasing concern on
care towards nature. In modern world industries are concerned not only to produce massively, but to
produce healthy products without harming the nature.



                                                                                                      14
            Shrivastava also proposes ‘ecocentric’ paradigm for management, which advocates an
ecologically centered conception of interorganizational relations and internal management activities
(Shrivastava, 1995:118-137). Thus, organizations are viewed as situated within bio regionally
sustainable industrial ecosystems, relating to each other through a logic of ecological interdependence.
Last two decades have been a period of transition from an industrial to a postindustrial era. Previously,
industrial societies were focused primarily on the creation of wealth through technological expansion.
Industrial modernization covered the period from the industrial revolution to the mid-20th century. This
period of tremendous industrial progress was characterized by scientific and technological
advancements in agriculture, medicine, communications, transportation, energy, chemicals,
electronics, and other sectors.
            Modernization risks are rooted in ecologically destructive industrialization and are global,
pervasive, long term, imperceptible, incalculable, and often unknown. Radioactivity and chemical
contamination are exemplars of such risks. Risks emanating from the Chernobyl nuclear accident were
geographically pervasive, temporally transgenerational, crossed national boundaries, and remain
incalculable. Modernization risks have proliferated through population explosion, industrial pollution,
environmental degradation; and people in communities all over the world have been experiencing
these risks in the form of visible negative influences on their quality of life. Because of industrial
pollution, risks to health and environment have expanded and urban air pollution, smog, global
warming, ozone depletion, acid rain, toxic waste sites, nuclear hazards, obsolete weapons arsenals,
industrial accidents, and hazardous products are manifestations of these risks. Public perceptions of
techno environmental risks have been heightened by frequent high-profile industrial accidents.
Chernobyl, the Exxon Valdez and the accident in Bhopal have raised world consciousness about these
techno environmental risks. Consequently in postindustrial society environmental degradation and
risks left by modernization are central concerns. In this context it is not sufficient to manage
corporations to optimize production variables, such as profits, productivity, jobs and growth.
            Corporations must manage risk variables, such as product harm, pollution, waste, resources,
technological hazards, and worker and public safety. This type of management does not mean simply
an expansion of the management agenda to include new risks. It implies a fundamental reversal in the
focus of managers’ attention that is, substituting the production orientation of existing paradigms. The
new management orientation focuses centrally on technological and environmental risks, that is, one
that does not treat risks as externalities but treats them as the core problems of management. An
example of such an approach is centralization of nature that is fundamental to all life and certainly
human welfare depends on it. Placing nature as the center of management is the hallmark of the
alternative ecocentric management paradigm, which are industrial ecosystems and ecocentric
management. Industrial ecosystems provide a vision of organizational populations and
interorganizational relations that are compatible with bioregional natural systems and it is a network of
connected interdependent organisms and their environments that give and take resources from each
other to survive. Ecocentric management, in contrast, seeks ecologically sustainable organizational
designs and practices, such as ecofriendly products through ecological designs, packaging, and
material use. It encourages the use of low energy, smaller amounts of resources, and environmentally
efficient and appropriate technologies of production.
            Traditionally corporate missions have had a national and financial orientation. They have
aimed at satisfying the demands of a narrow set of stakeholders, primarily investors and customers
and, secondarily, government and communities (David, 1989:15-24). Ecocentric management espouses
corporate missions oriented toward long-term, global and environmental issues. In addition to seeking
financial gains, ecocentric companies actively seek harmony with the natural environment.
            On the other hand multiplicity of paradigms at some point come into conflict and it is hard
for new paradigms to be accepted and implemented widely. Dominant social paradigm (DSP) in
Western societies, which includes support for such ideologies as free enterprise, private property
rights, economic individualism, and unlimited economic growth, poses a threat to progress in imposing
greater standards of corporate environmental accountability (Shafer, 2006:121-147). The idea of a
DSP, and its role in the construction and maintenance of "taken-for-granted" social institutions and
ways of life, is consistent with Gramsci's theory of hegemony (Gramsci, 1971). Gramsci argued that
the ruling elites of a society are often able to secure the voluntary compliance of the masses through
the popularization and acceptance of a worldview that is consistent with their desired agenda. This
                                                                                                      15
 dominant worldview or paradigm is diffused through the institutions of civil society, such as the
 media. Gramsci's theory seems to provide an apt description of the role of the DSP in garnering
 support for the interests of economic elites in modern Western societies. Specifically, the
 popularization of the perceived desirability of free enterprise, limited government regulation, private
 property rights, and economic individualism sup ports the agenda of private corporations, which have
 emerged as the dominant economic institutions not only in Western societies but also in the emerging
 global economy (Korten,1999). The elements of the DSP may be thought of as socially constructed
 traditions that legitimate prevailing social, economic, and political institutions, and express a common
 sense reality regarding the way society works. As in the case of Kuhn's scientific paradigms (Kuhn,
 1962), challenges to prevailing wisdom will often face daunting political battles, because they threaten
 the interests of ruling elites. This new worldview is purported to be the inevitable result of a
 fundamental conflict between the drive for continued growth and economic wealth and ecological
 sustainability.


Traditional Versus Ecocentric Management (Campbell and Young, 1991:10-20)

                  Traditional Management                   Ecocentric Management
                      Economic growth & profits               Sustainability and quality of life
 Goals
                      Shareholder wealth                      Stakeholder welfare
                      Anthropocentric                         Biocentric or Ecocentric
 Values:              Rationality and packaged                Intuition and understanding Post
                       knowledge Patriarchal values             patriarchal feminist values
                      Designed for function, style &
                                                               Designed for the environment
 Products;             price
                                                               Environment friendly
                      Wasteful packaging
 Production           Energy 5r resource intensive            Low energy & resource use
 System:              Technical efficiency                    Environmental efficiency
                      Hierarchical structure                  Nonhierarchical structure
                      Top-down decision making                Participative decision making
 Organization:
                      Centralized authority                   Decentralized authority
                      High-income differentials               Low-income differentials
                      Domination over nature
                                                               Harmony with nature
                      Environment managed as a
                                                               Resources regarded as strictly finite
 Environment;          resource
                                                               Pollution/waste elimination and
                      Pollution and waste are
                                                                management
                       externalities
                      Marketing aims at increasing
                                                               Marketing for consumer education
                       consumption
                                                               Finance aims at long-term sustainable
                      Finance aims at short-term
                                                                growth
                       profit maximization
 Business                                                      Accounting focuses on environmental
 Functions:           Accounting focuses on
                                                                costs
                       conventional costs
                                                               Human resource management aims to
                      Human resource management
                                                                make work meaningful & the workplace
                       aims at increasing labor
                                                                safe/healthy
                       productivity


          The new concept of strategy deals with the co-alignment of an organization with its
 environment. Reconceptualizing fundamental concepts like organization, objectives, and strategies
                                                                                                        16
forces researches and practitioners to rethink much of what they know about organizations. Part of this
rethinking involves making the functional areas of business more ecocentric. New concepts such as
“green marketing” and “green accounting” have been put both into theory development and practice,
and very likely in the coming years we will see the flowering of green management theories and
practices.
           5. Conclusion
            According to Kuhn scientific observations depend on the conceptual lens through which
reality is viewed, yet a breakdown occurs when reality becomes unintelligible as viewed through the
assumptions of existing theories. As those theories are bent to accommodate the gaps between theory
and observation, existing theories gradually lose credibility and a new conceptual lens must emerge
that can better explain reality. Practitioners for whom these gaps prove most problematic begin to
search for a new contender that not only explains the anomalies that have arisen, but also the
observations that were explained by the previous paradigm. During the revolutionary period, new
contenders are debated until a new paradigm is accepted, presenting a new way of looking at the
world; a new lens by which scientific concepts and reality relate to one another in a more meaningful
way (Crockett, 2005:191-208). In the evolution of many fields of human endeavor, paradigms appear,
influence practices in the field, and eventually yield some or all of their influence to other paradigms.
            Today technological, legal, post-industrial developments are introducing innovative
attitudes in traditional management, what has caused the change in social worldview. The paper
showed the connection of business ethics to corporate social responsibility including social,
philosophical and environmental dimensions as factors causing ‘paradigm shift’ in management. Such
‘paradigm shifts’ has both philosophical and social foundations as business strategy of corporate social
responsibility and corporate environmental management. The literature referred to in this paper shows
that natural science do not contribute to inclusion of ethics into sustainable management that would
take into account proper treatment of staff in changed reality, diversity management, globalization and
situational approach in management. Moreover, current management should be based on philosophical
principles such as equity, futurity, locality, diversity and cooperation; and social paradigms and
attitudes toward environmental accountability. According to the new ecological paradigm unlimited
growth within a finite ecological system is impossible, and feel that humans are approaching the limits
of ecological sustainability and must learn to live in greater harmony with the biosphere to avoid an
ecological catastrophe (Shafer, 2006:121-147).
            While most agree that it is necessary to earn financial and other outcomes, it is no longer
deemed sufficient as a justification for meaningful and sustainable work. The modern business
institution has shown itself to be a powerful engine for social benefit and with that power seems to
have grown an implicit social responsibility. Employees, customers, global partners, future
generations, the environment and others that have typically lacked the power to assert themselves in
the marketplace have found reason and voice to demand something more. The biggest and most
important challenge facing our society today: the challenge of ensuring that the enormous
entrepreneurial energies released by today's free market global economy end up by serving society not
destroying it.


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