Australian Journal of Management . August
2001, Vol. 26, Pages 89-103

Among the core capabilities that create competitive strength for a nation, perhaps none is more important but less well understood than management. The importance of having a critical mass of capable managers, and a strong management culture with clarity about what role managers must play in society, should be obvious when one considers the process of economic change and improvement. Whenever economic reforms are implemented, the pay-off comes only when companies and institutions take advantage of the opportunities offered by the policy reforms—and it is the managers within those organizations that have the responsibility for delivering the desired results. Without management, there is no execution and no sustainable economic improvement. Hence, the obvious importance.

But the lack of understanding is widespread, and derives perhaps from the limited perspective of the different groups who write about this subject. First, there are the economic development theorists who deal mainly at the macroeconomic policy level. Theirs is a world of public policy, where the emphasis is on getting the policies right—without worrying as much about the transmission mechanism between policy setting and economic outcomes. The right policies are critical, they are a necessary condition for success; but they are not sufficient. Success will not materialize without adequate management capability, but management has never been seriously examined by this group. Second, are the Business School faculties. These are largely comprised of specialists, expert in the various disciplines and functional specialties that underpin management education, but usually without much knowledge or experience in the general management role. Third, there are the practicing managers. While they understand the management job, they usually lack the academic inclination or background to articulate a management theory that integrates with economic development theory. And, fourth, there are the popular journalists, including business journalists. They tend generally to deal with management at a very superficial or social level, without solid comprehension of what managers do and without a conceptual framework of the management role in society. So what the average citizen or parliamentarian hears are lots of observations and commentary about management, without any coherent sense of its role and importance in the debate about national competitiveness.

This paper tries to make the case for the critical importance of management capability in determining national economic competitiveness. In doing so, I also hope to improve the level of understanding about management, so that public discourse on this subject might hopefully be improved. My approach will be to raise and address these five questions:

1. What is management?

2. Why is management so important for a country?

3. How is management developed?

4. Where is Australia today in terms of management capability? 

5. What is the best way forward, for Australia, in terms of strengthening this key capability?