Deans Columns

March 21, 2005 8:14 am

Santiago Iñiguez, Instituto de Empresa, on Baltasar Gracián

Management is philosophy in action.

This simple theory has certainly given business educators food for thought over the years. Yet it is still no easy task to find a balanced and palatable guide to how thought and action should interact in the corporate arena.

Allow me, therefore, to introduce Baltasar Gracián (1601-1658), a 17th-century Spanish sage who, though he may not have achieved the same widespread fame as his literary counterparts, nevertheless played an influential role in the European Enlightenment.

Such a highly qualified commentator as Nietzsche hailed him as the author of one of the world’s greatest works of practical philosophy.

His main contribution to strategy, The Art of Wordly Wisdom: a Pocket Oracle comprises 300 elegantly crafted maxims that are as astonishingly appropriate to the running of a 21st century global business corporation as they were to Spanish society more 300 years ago.

If someone were to throw in references to e-mails, laptops and cell phones, you would hardly notice that you were reading words written several centuries ago.

Gracián’s recommendations for achieving a powerful blend of ethical behaviour and secular effectiveness are both readable and instructive, not to mention practical.

The canny observations and humanistic approach of this chaplain, confessor, preacher and academic administrator are a far cry from the naked cynicism of other classics of the genre, and far more applicable to the kind of corporate environment we now aspire to.

The virtue of his writing lies in providing just the right blend of thought and action in management.

It is possible Gracián’s contributions could provide the answer to the debate sparked by the late professor Sumantra Ghoshal, of London Business School, whose parting shot from beyond the grave has left the world of business education in turmoil.

In a posthumously published article Prof Ghoshal laments what he sees as business educators’ over-emphasis on the ‘homo economicus theory’ as the cornerstone of management science. In brief, this states that economic agents are rational wealth-maximisers who behave strategically, trying to anticipate the possible reactions of other economic agents to their decisions. Social well-being does not enter the equation.

This model is a traditional one, found in such classics as Machiavelli’s The Prince, a volume which has topped bestseller lists for centuries and still forms part of the strategic management syllabus at some business schools.

But it is a “nightmare” model, based on the idea that human nature is intrinsically aggressive, and that people have a strong tendency to let selfish instincts get the better of them. We should remember, however, that the nightmare model is based on supposedly indisputable facts, and that we are not discussing whether or not these facts are reprehensible.

It is merely an attempt to describe the way things are rather than condone them.

Nevertheless, it can be criticised on at least that crucial basis, namely that it may not actually be an accurate depiction of reality.

This criticism seems to be Prof Ghoshal’s main line of attack, in that the homo economicus theory leaves no room for other patterns of behaviour, such as the fact that people sometimes act on the basis of altruism.

Enter the noble dream, as advocated by numerous participants in the Davos Summit this year.

According to this model, politicians and managers must take ethical responsibility for their actions, the underlying idea being that it is the essential duty of managers to create wealth, while helping improve the environment, eradicate poverty, and enhance society in general.

In fact, politicians, managers and business educators are neither angels nor demons, but instead tend to embrace both of these two extremes. And although today’s authors may proffer a wide range of recommendations on how to deal with this paradox, the classics, those building blocks of modern thought, remain sadly silent

Our man Baltasar Gracián is a much-needed exception. His contribution to the nightmare versus noble dream argument provides us with a realistic approach to the problem. The great appeal of his work is that his observations of human nature are viable from all perspectives.

The reader is, for example, instructed that “knowledge and honourable intentions ensure that success will bear fruit” and that “character and intelligence are the axes your talent revolves around. It isn’t enough to be intelligent; you must also have the right character.”

Integrity scores highly with Gracián, not only as the right way to be, but also as a purely pragmatic approach.

If you “only act with honourable people”, then the chances of a successful outcome are multiplied, given that “their honour is the best guarantee of their behaviour, for they always act according to their character”.

It may sound as if Gracián was setting his followers up to be sitting ducks for the first corporate shark they encounter, but rest assured that he also took care to equip his readers for the darker side of the business world. “Do not be too much of a dove,” he warns, “but remember that you must ‘use’, but not ‘abuse’, cunning.”

Timeless business advice abounds in this small, but perfectly formed volume. Gracián pays tribute to networking with: “One of the gifts of the hero is the ability to dwell with heroes. This ability is a wonder of nature, both because it is so mysterious and because it is so beneficial.”

And he was a great advocate of current “must-dos” such as innovation. As he so eloquently puts it, “Renew your brilliance. Excellence grows old and so does fame”, which sounds so much more pleasant than ‘innovate or die’.

Comments like, “have original and out-of-the-way views” and “float a trial balloon to see how well something is received” would not be out of place among the practices of any of today’s leading companies.

Globalisation is also addressed. The reader is advised to, “Avoid the defects of your country. No country, not even the most refined, has ever escaped some innate defect or other, and these weaknesses are seized on by neighbouring countries as defence or consolation.”

He had already grasped that dispelling stereotyped perceptions is crucial when it comes to developing an internationally respected profile and is an essential skill when leading cross-cultural teams.

True visionaries are hard to find, but when one does come to light it is particularly encouraging to discover that both heart and business brain are in the right place, and that they are able to be optimistic without being naïve.

Gracián’s pocket oracle says: “Wisdom has one advantage. She is immortal. If this is not her century, many others will be.”

Baltasar Gracián certainly created a wise and astute world for us to learn from. For me he remains a visionary for all seasons.

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