Carlos Cavallé: “Business Management Is About People"

21 Jan 2015

STI Chairman, Carlos Cavallé, reflects on the timeless foundations of business, business management and business management education. From his introduction to 'Rethinking Business Management'…

So much is happening in our modern world that has a bearing on business management. Certain aspects of business are changing much faster than ever before, while business management has a tough time keeping up, let alone leading the way. Still, amidst all of this change, some values, principles, and practices remain the same, or at least should remain the same, no matter what innovations come along tomorrow or the day after. We could refer to them as business management principles, or even business management foundations. They are unshakeable because they correspond to universal human nature, to the very essence of human beings.

Because this is the case, business management must never lose sight of the fact that it is, first and foremost, a human enterprise, composed of and for people. Subscribing to this philosophy, IESE Business School printed in its debut brochure fifty years ago that business organizations are worth what their people are worth. In short, business management is about the people, a simple truth made complicated by changes in people’s environments.

Consider just a few examples of realities that a business manager of, say, only fifteen years ago did not face but which fill the pages of today’s financial newspapers: the accelerating pace of globalization, new global capital influxes, the spate of corporate scandals, the incredible rise of Chinese and Indian markets, a current fifteen-year run of world economic prosperity (a feat never before accomplished), and the subprime financial crisis. Undoubtedly, these and countless other recent events have had an impact on people’s values and expectations in business, and it should be the duty of educators to observe and analyze the ways in which this has occurred, whether for better or worse. And finally taking all of this into account, scholars and educators should develop a model of business management suitable for current times, yet loyal to the timeless code of a moral conduct as accepted by Aristotle, Judeo-Christians, and many of the world’s other major religious traditions. So while the business manager of fifteen years ago inhabited a different world from that of the business manager of today, the two can still share a common sense of purpose and of “right and wrong”, elements that place them within the same larger story of business management.

It is therefore pertinent to ask whether modern business education has successfully tied together the discoveries of the present with the wisdom of the past, the ephemeral with the permanent. In many cases, unfortunately, the answer is no. Confusion concerning identity and purpose, and a tension between the short lifespan of popular theories and a desire for more stable concepts (as is true in many sciences), characterizes much of modern business education.

Clearly, rewinding the clock is not a viable solution, but neither can business schools afford to go forward without a metanarrative of identity and purpose and become, by default, mercenary in their approach. Rethinking Business Management could be described as an attempt to help illuminate just such a narrative in business management: one that both recognizes the new paradigms in business and retains a sense of purpose articulated within a moral framework, reaching above and beyond mere profit and loss. It must be a narrative that sees an ever-present ethical dimension in each and every business decision. Recent experiences continue to remind educators that the answers to the questions "What is business for?" and "What is the business school for?" require an ethical vocabulary, such as we hope can be found in this book.

I would like t thank the contributors to this book. Their reflections and discussions play an important role in our long-term project of revisiting the foundations of business management. In this effort, we are always inspired by the conviction that business management should recognize the immutable aspects of human nature, those present across all eras and cultures. Despite pronouncements about the so-called "economic man," human beings' behavior and aspirations should not be understood in purely economic terms. Business management has the potential to be so much grander by helping to satisfy the human penchant for values and goodness that cannot be expressed in numbers or explained by utilitarian logic. The future belongs to those who are "rethinking business management" accordingly.

Learn more about "Rethinking Business Management" and its contributors