The Purpose of a Manager

What is the “purpose” of a manager? In particular, what is the purpose (or goal or objective) of a corporate manager (i.e., any manager, at any level, within a corporation)?

The preamble of the MBA Oath echoes one common sentiment when it says, “my purpose as a manager is to serve the greater good by bringing people and resources together to create value that no single individual can create alone.” [emphasis added]

Is that really the case? Is there a good argument for that point of view?

Let’s consider 3 possible answers to the question of what a manager’s purpose is (in the ethically-relevant sense of that word).

  1. The purpose of a manager is to do whatever s/he was hired to do, which is probably (for standard business corporations) to do his/her best to help the corporation make a profit (and to implement whatever charitable / CSR-type plans the company’s bosses see as appropriate);
  2. The purpose of a manager is to serve the greater good; and
  3. The purpose of a manager is to pursue his/her own interests.

Which of these is right? Do we need to choose? Can they all be right at once? If and when they conflict, which should take priority?

Let’s try a thought experiment, a bit of fiction to stimulate our intuitions.

Imagine I own and operate a small but productive apple orchard, employing say a dozen people to help me harvest and ship the apples. But imagine that, at some point, I get offered an attractive job in the city, one that is inconsistent with continuing also to run an orchard. Imagine that, rather than sell the orchard, I decide to hire a manager to take care of it in my absence. So I leave the company in her hands, and move to the city. Once month or so, we talk by phone, so that she can tell me how things are going and so that she can ask what my wishes are about high-level strategy, etc. And at the end of the year, she sends me whatever money is made from the sale of apples, minus operating costs (including the cost of materials and equipment, her own salary and the wages of the other employees, etc.).

Now, ask yourself: what is this manager’s purpose? What objectives should she work towards?

Well, surely she has as one of her goals making a living. That, after all, would likely be why she took the job in the first place. So she has her own “purposes.” But those surely can’t be ethically overriding. For example, what should she do with the money derived from the crop of apples after she has taken her own salary and paid other expenses? Can she use that money for her own purposes? Surely not. (Preventing that sort of self-serving move is a big part of the point of the system of corporate governance that bigger, more complicated organizations need to put in place.) The most obvious answer (though not the only alternative) is that she should send that money to me. They are, after all, my apples, grown on my trees on my land, and I’m the one who hired her to manage the operation for me.

What about the notion of serving the greater good? In our story, I’ve now got a good job in the city. Surely there are others in the community in which the orchard is situated that could use the leftover money more than I could. In that sense, it would serve “the greater good” for the manager to give that money to them. Or she might instead be tempted to give a really big raise to my apple-pickers. (Let’s assume they already make a decent “living wage,” but a big raise would allow them something closer to the affluent middle-class lifestyle that I myself already enjoy.) But surely — given that they’re my apples to start with — my manager ought at least to ask me, first, before giving my money away? Doing anything other than sending the money to me would amount to embezzlement, or at very least misuse of funds. But how do we square that with the appealing notion that being a manager involves contributing to the greater good?

We can get closer to the answer by noting that there’s a complication in the statement about a “manager’s purpose” in the bit of the MBA Oath quoted above, a complication that I’ve ignored so far. The Oath says that “my purpose as a manager is to serve the greater good by bringing people and resources together to create value that no single individual can create alone.” In other words, the Oath also suggests the mechanism by which managers are to serve the greater good.

Working that provision into our story: the manager I employ can be seen as serving “the greater good” by doing a good job of managing my orchard. If she does that well, she’ll produce a valued food product, contributing to the well-being of everyone who likes apples. If she manages to keep the business going in a sustained manner, she’ll also help keep a dozen people gainfully employed. And also by doing so, she will hopefully generate a profit for me (out of which I may well contribute to various charities, or simply buy things, thereby contributing to keeping other people employed). If she can’t do that, I’m likely to replace her with someone who can, or shut down the orchard entirely. And who benefits from that?

10 comments so far

  1. Stacie Chappell on

    Interesting discussion point. Unfortunately, from my point of view, too much emphasis was put into caricaturising the first two options and not enough time spent fleshing out the nuances involved in the third option. Serving the greater good ‘by doing a good job of managing the orchard’ involves discernment and careful stewardship for sustainable profits – which are not clear cut but require increasing levels of complexity.

    • Chris MacDonald on

      Stacie:

      I’m not sure I understand the first part of your comment. You suggest I need to give the 3rd option more detail. I didn’t give the third option (the option of managers being entirely self-serving) because I don’t think anybody thinks it’s an ethically-legitimate option. Do you think perhaps it is?

      Chris.

  2. Lalitha on

    Hi, Chris!
    I guess, there seems to be some confusion regarding the meaning to be attributed to “the greater good”. Why should “greater good” be understood as spreading the butter of “profits” around to your employees – the apple pickers and not sending the same to you? or, anything which may run counter to your financial interests?
    In MHO the phrase “greater good” should be understood in the larger sense of Bentham’s doing greatest good for the greatest number by efficient processes and effective products and services. The “greater good” may be construed to mean that you put your tools and resources to generate the best products at the least cost with least damage to society and the environs.

  3. Chris MacDonald on

    Lalitha:

    I didn’t say the greater good *should* be understood as spreading profits to my employees. I said my manager might see it that way. IF the manager sees her job as doing the most good for all concerned, and if she sees that more good can be done with a given sum of money by giving it to those that need it most, then she’s liable to give the money away. That’s the most obvious, Benthamite strategy — but it requires not looking at the long-run and the role the apple orchard plays in the larger economy, as well as ignoring her promise to me!

    CM.

  4. Dan Wheeler on

    Executives will have to invest more and more on issues such as culture, values, ethos and intangibles. Instead of managers, they need to be cultivators and storytellers to capture minds.
    — Leif Edvinsson, pioneer on intellectual capital

  5. Lalitha on

    Chris,

    Thanks for the clarification. Why that big “IF” the manager considers it her job to give away the money earned through the orchard to others…..????
    First, managers ought to realize and know that they do have fiduciary duties cast upon them to act in the best interests of the employer and may be this can be incorporated as a term in the service agreement without leaving any scope for misplaced philanthropy and consequent violation or dereliction of duties.
    Second, I guess, even if the employers are gullible and do place trust on their managers and fail to have the scope and ambit of the duties and powers of the managers clearly indicated in their service agreements, that is the reason why we have the MBA Oath, not to act as per your whims or fancies but to honor your professional commitments and thus, promote the “greater good”…????
    Have I missed out anything???

  6. Chris MacDonald on

    Lalitha:

    I’m just playing out explicitly the implications of a particular point of view. The view that managers exist for the (direct) good of the community as a whole is actually quite a common, though mistaken, point of view. At least some versions of “stakeholder theory” are a good example.

    Chris.

  7. Marvin Brown on

    I am not sure if your 3 choices really capture the best alternatives. I would like to make a distinction between the manager as a property-manager and as a community organizer. If the work is essentially the management of property, then all the resources (including human resources) are treated as property, which is enshrined in business law, at least in the United States. If management is the work of community organization, on the other hand, then a manager has the job of enabling workers, as citizens, to get the work done.

  8. Chris MacDonald on

    Marvin:

    The manager in my scenario is not just managing property. She is managing a small business: coordinating the work of a dozen employees to harvest the apples from the trees on my property (as well as pruning the trees, guarding against pests, etc. etc.).

    Chris.

  9. Leadership Development Course on

    Thanks. Sometimes, you can just wonder why they are there. But they are truly very important to any organization.


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