My research on shareholder, corporations and managers illustrates that managers are “merely” people with their own attitudes, perceptions, biases and fears. These human traits, when allowed to dictate corporate policy, will inevitably impact the quality and robustness of decisions made – and ultimately will impact on shareholder outcomes.

Take a manager faced with a decision that involves a significant risk to the corporation. If the culture is one that is quick to blame, then the personal risk that the executive faces if the risk turns sour, may result in the executive losing career opportunities – let alone his job.

If the executive has a young family, mortgage and private school fees, then that executive, only because he is human, is likely to shy away from taking the risk – even if it is the appropriate thing to do from a corporate perspective.

Therefore on one level, managers by their humanness, make decisions that may not be in the best interest of the organisation and its shareholders. On another level, managers will be attracted to things they know, and away from things they don’t know – again only because they are normal. A manager familiar with the 360 degree review technique, for example, will be attracted to it because, in his knowledge, he feels safe. Whether the 360 degree review technique is the optimal technique needed for the manager’s context may be a question that the manager won’t ask and the corporation may be oblivious to.

The choices that managers make everyday are always made with someone’s subjectivity playing an role – sometimes a minor role and sometimes a major one.

The old adage that one can’t teach an old dog new tricks is a wonderful metaphor for this situation. 

What earlier discussion clearly conclude is that no tool or technique is always the right technique for every situation.  Managers are affected by their subjectivity; organisational tensions, competition and conflict; and the normal dynamic of aspiration and success, that comes to play in deciding corporate strategies. 

Sustained Competitive Advantage, World’s Best Practice, TQM, 360 degree reviews, Innovation, Re-engineering, Teaming, Knowledge Organisations, Learning Organisations, Quality Circles and so on are all techniques that suit a certain context. Used inappropriately, they can cost millions, defer desired outcomes or even compromise permanently the organisation – all at the expense of the poor shareholder who has entrusted the management to perform as required.