Review: Four Contexts of Business Leadership Shaping the 21st Century
This article, “Four Contexts of Business Leadership Shaping the 21st Century”, argues that there are four different broad styles of business leadership (“contexts”) that have informed the way that leaders have behaved. Those four contexts are rational, humanist, wholistic, and spiritual. The authors believe that each of these contexts (in order) is contained within the previous one, and that each successive context builds upon the strengths of the previous and goes beyond it.
The article starts with a historical context dating back to about 100 years ago, at the beginning of the 20th century. The authors state that:
“Each context is now in varying stages of maturity and has been influenced by concepts from science and either psychology or spirituality. Each measures leadership success by its own view of the purpose of business and leadership. And each operates by its own understanding of how to lead and manage people.“
They believe that when work began to be organized (roughly around the time of the Industrial Revolution) it started out in a rationalist context. This context was influenced by the idea of “survival of the fittest” and that people much compete for limited resources. It was believed that if individuals pursued their own self interests, capitalism would balance everything out for the good of everyone. The result of this context is the idea of business as warfare, extreme competition, and the ideas of business as a machine (and employees as parts of that machine). This also led to patriarchal leadership, micromanagement, and the idea that people respond to punishment more than rewards. The authors find wisdom in this context in the following two ways: it honors the experience and wisdom of those who have “paved the way”, and it efficient use of resources. However they also mention two limitations of this context: that it discounts the inherent capabilities and motivation of man to do and be good, and that it believes that life (including people and nature) could and should be used and controlled for one’s own self-centered goals. The rationalist context is in its decline, according to this paper.
The next context discussed is the humanistic context. The authors state that this is the most common context being used currently. It is characterized by the idea of “enlightened self-interest.” This context recognizes that fear is an obstacle rather than a motivator to productivity. This context introduced the ideas of the empowerment of the employee, problem solving, and an emphasis on teams. Here capitalism is seen to be able to help create a win-win situation, when combined with situational or “relative” leadership models. The theories of Abraham Maslow are used extensively in this context. The recognized wisdom of this context are that it recognizes the essential goodness and work ethic of people and that it provides opportunities for individuals to fulfill potential (including self-actualization as well as work abilities and goals). Some limitations are that it focuses on explicit needs and is motivated only by missing elements, and that it focuses on individualism, where the win-win solution is between competing individual interests rather than that of the society as a whole.
The next context discussed is the wholistic context. The highlights of this context are its budding understanding that complexity and uncertainty are an essential element of all of life, including business. The theory of interdependence emerges in this context, and the shift from management of people to stewardship of them. The difference, as specified in this article, between management and stewardship is that management is the act of “handling” people, whereas stewardship is the “act of caring for things that you have been entrusted with for safekeeping—in this case, the interests of customers, employees, suppliers, society, future generations, and nature itself.” This context represents a small but growing portion of today’s businesses. In this context business is viewed as a living ecosystem rather than a machine, and wealth creation becomes a means to an end (the betterment of society) rather than an end itself. Recognized wisdom of this context includes that people, nature, and businesses are interconnected, and the emphasis on the wholistic nature of values and principles from which to operate “harmoniously and creatively”. Some limitations are that it bases motivation primarily on self-achievement, even if it benefits the larger whole, and that it precludes a discussion of spirituality in the workplace, focusing instead only on personal and business goals.
Lastly, the fourth context is spiritual. This context has yet to see a real following but is growing steadily. The authors argue that this context is one of self-transcendence that goes beyond any of the previous contexts. They start here by defining what spirit is: “[spirit is] the animating principle, the supernatural essence which breathes life into creation.” They point out that in the other contexts, if spirituality is considered at all, it would be as one “slice of the pie”, whereas in this context spirituality is the pie. This context switches from the idea that spirituality is a piece of the puzzle to the idea that it is part of every person, in everything we do. Also part of this context is the idea that one must earn the right to lead; spirituality is a way to achieve that. The authors sum up this context as “respecting people for who they are and not for what they can do for us.”
This article, “Four Contexts of Business Leadership Shaping the 21st Century”, argues that there are four different broad styles of business leadership (“contexts”) that have informed the way that leaders have behaved. Those four contexts are rational, humanist, wholistic, and spiritual. The authors believe that each of these contexts (in order) is contained within the previous one, and that each successive context builds upon the strengths of the previous and goes beyond it.
The article starts with a historical context dating back to about 100 years ago, at the beginning of the 20th century. The authors state that:
“Each context is now in varying stages of maturity and has been influenced by concepts from science and either psychology or spirituality. Each measures leadership success by its own view of the purpose of business and leadership. And each operates by its own understanding of how to lead and manage people.“
They believe that when work began to be organized (roughly around the time of the Industrial Revolution) it started out in a rationalist context. This context was influenced by the idea of “survival of the fittest” and that people much compete for limited resources. It was believed that if individuals pursued their own self interests, capitalism would balance everything out for the good of everyone. The result of this context is the idea of business as warfare, extreme competition, and the ideas of business as a machine (and employees as parts of that machine). This also led to patriarchal leadership, micromanagement, and the idea that people respond to punishment more than rewards. The authors find wisdom in this context in the following two ways: it honors the experience and wisdom of those who have “paved the way”, and it efficient use of resources. However they also mention two limitations of this context: that it discounts the inherent capabilities and motivation of man to do and be good, and that it believes that life (including people and nature) could and should be used and controlled for one’s own self-centered goals. The rationalist context is in its decline, according to this paper.
The next context discussed is the humanistic context. The authors state that this is the most common context being used currently. It is characterized by the idea of “enlightened self-interest.” This context recognizes that fear is an obstacle rather than a motivator to productivity. This context introduced the ideas of the empowerment of the employee, problem solving, and an emphasis on teams. Here capitalism is seen to be able to help create a win-win situation, when combined with situational or “relative” leadership models. The theories of Abraham Maslow are used extensively in this context. The recognized wisdom of this context are that it recognizes the essential goodness and work ethic of people and that it provides opportunities for individuals to fulfill potential (including self-actualization as well as work abilities and goals). Some limitations are that it focuses on explicit needs and is motivated only by missing elements, and that it focuses on individualism, where the win-win solution is between competing individual interests rather than that of the society as a whole.
The next context discussed is the wholistic context. The highlights of this context are its budding understanding that complexity and uncertainty are an essential element of all of life, including business. The theory of interdependence emerges in this context, and the shift from management of people to stewardship of them. The difference, as specified in this article, between management and stewardship is that management is the act of “handling” people, whereas stewardship is the “act of caring for things that you have been entrusted with for safekeeping—in this case, the interests of customers, employees, suppliers, society, future generations, and nature itself.” This context represents a small but growing portion of today’s businesses. In this context business is viewed as a living ecosystem rather than a machine, and wealth creation becomes a means to an end (the betterment of society) rather than an end itself. Recognized wisdom of this context includes that people, nature, and businesses are interconnected, and the emphasis on the wholistic nature of values and principles from which to operate “harmoniously and creatively”. Some limitations are that it bases motivation primarily on self-achievement, even if it benefits the larger whole, and that it precludes a discussion of spirituality in the workplace, focusing instead only on personal and business goals.
Lastly, the fourth context is spiritual. This context has yet to see a real following but is growing steadily. The authors argue that this context is one of self-transcendence that goes beyond any of the previous contexts. They start here by defining what spirit is: “[spirit is] the animating principle, the supernatural essence which breathes life into creation.” They point out that in the other contexts, if spirituality is considered at all, it would be as one “slice of the pie”, whereas in this context spirituality is the pie. This context switches from the idea that spirituality is a piece of the puzzle to the idea that it is part of every person, in everything we do. Also part of this context is the idea that one must earn the right to lead; spirituality is a way to achieve that. The authors sum up this context as “respecting people for who they are and not for what they can do for us.”
Business leadership is a complicated topic, as one may agree with the other and vice versa. These contexts are applicable to most kinds of businesses. Ahhh, yes. The humanistic context is, indeed, the most commonly used.
Posted by: Kimi Stremmings | 12/23/2011 at 01:10 PM