Doing Well by Doing Good:
Marketing and Management Science in the 21st Century
The business community
in America has, at best, a tenuous grasp on the indisputable principle that honorable
conduct is a prerequisite for abundant profit! Benjamin Franklin understood the
benefits of enlightened and ethical business practices when he advised, “Do well by doing good.”
Throughout the history
of capitalism many entrepreneurs have prospered through application of this
principle. A selected review of early industrialists makes the point that these entrepreneurs were driven
by their own personal philosophy; that doing “good” for their people means that their business will also do “well.”
But it wasn’t until the
1960s that modern management science began to teach students that they can create stable
wealth by doing “good” for their employees, their customers, and their
communities. Finally, a fundamental truth that guides the creation of sustainable
wealth was available to business students.
Today there is excellent
data, both qualitative and quantitative, showing that a company’s successful
relationship with people and ethical business practices is positively related
to its financial performance.
Four scholars, from divergent
fields, deserve the credit for developing the established principles that
produce optimal wealth. Let’s take a brief look at these pioneers.
Maslow, Drucker, McGregor, and Nash is not
a law firm. MDMN is an acronym I
created to serve as a reference point for this discussion on modern marketing
and management science.
Abraham Maslow,
through his books and teachings, brought us the psychology of business. Maslow,
father of modern management, states: “The
good society is one in which virtue pays.” In a just society prosperity is the natural consequence of “Doing Good.”
Peter Drucker’s primary academic career was
spent at Sarah Lawrence College. He also published 39 books on management that
were translated into 30 languages. “I
became an immediate convert: Maslow’s evidence is overwhelming. But to date,
very few people have paid much attention. He (Maslow) wrote Eupsychian
Management to
bring McGregor and me down to earth." -- Peter Drucker, 1995. Here in the 21st
century it remains true that very few people are aware of the contribution of MDMN.
Douglas McGregor, PhD in psychology from
Harvard University, was a Management professor at the MIT Sloan School of
Management. His 1960 book, The Human Side
of Enterprise, had a profound influence on education practices; “The ingenuity of the average worker is
sufficient to outwit any system of controls devised by management.” Like
all natural systems, human behavior cannot be controlled; however it can be
managed. “Any attempt by management to
enforce behavior that is contrary to human nature is preordained to fail.
Conversely, management methods that compliment human nature are sure to provide
wealth and well being for all concerned.”
John Nash, in the hit movie “A Beautiful Mind,” is at
a bar with three other friends when he begins to develop a theory of what is
now called Nash Equalibria, the idea that won him the Nobel Prize and the
respect of his colleagues and loved ones, despite his schizophrenia.
At the bar, he and his
friends begin to compete for the beautiful blonde in a group of five women. “If we all go for the blonde” Nash
says, “we block each other;
not a single one of us is going to get her…and we insult the other girls. But,
what if no one goes for the blonde? We don’t get in each others’ way, and we
don’t insult the other girls. It’s the only way to win….the best result comes
from everyone in the room doing what’s best for himself and for the group.”
The two most important
conclusions gleaned from John Nash’s equations are;
1. More profit is created
through cooperation than through competition.
2. Nice guys finish first.
For more background we
suggest becoming familiar with the works of Peter Drucker and Abraham Maslow, as
well as Douglas McGregor, and find out why John Nash won the Nobel Prize for
Economics in 1994.
One can hardly complete
a business course on the college level without being introduced to the
difference between the “X” and “Y” theories of management, as well as Maslow’s
needs hierarchy. These classes do not provide adequate familiarization with
modern management science, nor do they really explain Maslow in relationship to
management.
Most courses fail to convey
adequately the idea that profits are maximized when respect for the “human side of enterprise” is obvious. Maybe an additional
problem is that students of business do the same thing with their subjects as I
did with Algebra. I did what I needed to graduate, and have never worked
another algebra problem for the rest of my life.
While these ideas were
slow to catch on, today’s upper echelon management professionals strive to find
creative applications for these principles. Because of intellectual competition
and academic hubris, the contributions of MDMN
are rarely available in a single source no matter what college you attend. Best
Self USA has blended the contributions of MDMN
and created a marketing and management training program for individuals and
organizations.
We have created a
research paper tracking the history and guiding principles of modern management
science and published it free of charge at:
I hope this helps remind business people of their college days,
and encourages them to use proven profit enhancement principles based on “good
guys finish first.”
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