Why Are Business Gurus Overconfident Jerks?

by Henry Farrell on September 12, 2013 · 6 comments

in Frivolity

Andrew asks me to expand on this below – as it happens, I do have some thoughts that I couldn’t shoehorn into the essay. He’s also right that my ideas are influenced by the Niall Ferguson debate. While there are some good business writers – the best ones are practical sociologists, with a lot of interesting insights into how organizations and institutions work. Still, most business writing is bad, and some is quite extravagantly bad.

My half-developed theory of this borrows from David Kreps’ famous arguments about corporate culture (institutional access required). Kreps, a game theorist, is trying to figure out why and how business reputation can be an asset. A lot of his answer has to do with corporate culture. We live in an unpredictable world, which means that firms cannot write ‘complete contracts’ e.g. with their employees, which would cover every possible contingency and eventuality. This might worry employees or contractors, who fear that in the event of an unpredictable occurrence, the firm will not stand by them. Their fears may lead them not to want to commit to the firm.

What a corporate culture does, in Kreps’ argument, is to provide you with a way to reliably resolve these kinds of ex-ante unforeseeable situations in a way that everyone understands ex-post. In plainer language, people will be less worried that the firm will cheat them in unpredictable ways, because the culture of the firm tells them how the firm is likely to behave in unforeseeable circumstances.

What Kreps doesn’t really dwell on is that maintaining, let alone changing, a corporate culture takes a lot of work. Much of the apparently pointless and painful activities of businesses – the vacuous announcements, internal propaganda and the like, are aimed at maintaining this culture, providing employees with a sense of what the company’s priorities are, how it reacts in unexpected emergencies and so on. This stuff also perhaps gets internalized, leading to greater loyalty in the East African Plains Ape brain.

And business writing plays a role in this process of cultural reproduction. When a multinational buys 20,000 copies of the latest business bestseller to distribute to its employees, it isn’t necessarily expecting them to discover new insights from the books. It is expecting them to get some sense of the corporate culture and direction of the firm are, from the fact that one particular book (rather than some other possible book) has been bought and distributed. If it’s about the Internet, managers are supposed to start getting with the Internet. If it’s about the need to build closer relations with subcontractors, managers are supposed to start thinking about how to do this. If it’s about squeezing every possible penny from employees … you get the idea.

Under this interpretation, many (possibly the vast majority) of business books are not really ‘books’ in the sense that they are intended to be read for the sake of their ideas, let alone their prose. If they are read, it is so that their maxims can be repeated to others within the firm, demonstrating loyalty. They are books only in the sense that they are physical book-like objects. Really, they are objects of ritual exchange. And business authors are less idea-crafters than hierophants, dedicated to helping senior management perpetuate the sacred mystery, or, when necessary, reinterpret it a little in congenial ways. Or, if one wants another analogy, they play the same kind of ritual purpose as did the works of Marx and his acolytes in the former Soviet Union.

Which means, if this admittedly overblown theory is right, that business writing is very nice work if you can get it. Ludicrously inflated speakers’ fees, first class airplane tickets, huge book sales, the works, all for not very much effort, and less originality. However, to the extent that the quality of the book doesn’t matter so much, the barriers of entry are low. Hence, you have a lot of people trying to win the few prizes available in an essentially arbitrary competition, encouraging them to clamor for attention as much as possible. Furthermore, hierophants, in contrast to real public intellectuals, cannot admit of any doubt in public, lest their command of the arcanum be questioned by the vulgar multitudes. The two together plausibly lead to the unattractive features of business gurus that Andrew identifies.

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