Managing Essentials

International Symbolic management and its problems

Symbols play a significant role in companies and in management. A symbol is something which stands for or suggests something else by reason of relationships, association, convention, or accidental resemblance (Websters New Collegiate Dictionary). In corporate life objects and actions regularly convey not just a symbolic meaning. To create symbols as focal points concentrating all aspects of good and to form a unique appropriate impression, can be regarded as a core activity for every company. Materially nowadays a logo stands for the company implying that the complete craftsmanship and reputation of the organization is represented in its products and services. Companies know that consumers do not relate to the generic product but to the broad associative context coming with it. Consequently the use of symbols has found its most elaborate application in branding, the attempt to create a unique associative field for a product. A car is not just a car, but expresses a personality and the accompanying lifestyle. The example points already to the other side of the equation: symbols are a universal aspect of communication. As companies brand their products, individuals use these products as symbols to express themselves. Social psychologists summarize these individual attempts to create a picture of oneself for others by acts and their symbolism as impression formation. Managers do not only express themselves in their actions but a corporate culture which they also form. What they pragmatically do and thereby symbolically imply, is aimed at and observed by a multitude of different stakeholders, ranging from their employees and colleagues to their bosses and shareholders. Actions and symbolism reflect on the company as a whole in its products and procedures. Therefore symbolism of and in management became an important subject of study about thirty years ago, significantly inspired by a seminal paper of Jeffrey Pfeffer from Stanford University. In its most radical form symbolic management questions especially the role of top management in general. Are chief executives and their top staff in fact navigating the course of a company, and can success and failure be attributed to their decisions? Or are their speeches and actions more symbolic, success and failure the result of forces outside their control? Arent they, like everybody, not just attributing a success which may be accidental to themselves, and failure to unfortunate and unforeseeable circumstances, even when this can be found in the whole sector their company operates in? Given the power of the markets and that only a very few companies outperform their sectors, some doubt seems reasonable. However more importantly the question is, which symbolic meaning is associated with the activities and self presentation of management? Especially seen from the inside companies are not abstract entities. They are impersonated by their leadership and consequently, all actions and self-presentations of leaders have not only practical implications but also symbolic value. Historically the perspectives from inside and outside have often been closely linked since the companies leaders were also their founders. The times of Henry Ford, Werner von Siemens or Philip Morris are long gone, but also more recently leaders like Steve Jobs (Apple), Jack Welch (General Electric) or Richard

Managing Essentials
International
Branson (Virgin) have become symbols for their companies even if they own only a minority stake in it. Most senior executives are less visible to the general public, but they are, of course, the focal points for their employees. Employees differentiate between the corporate identity expressed outwards and the corporate practice inside. Mostly, what senior managers say and do has no direct impact at workplaces often far away in hierarchy and locally, but they impersonate the principles of corporate governance. They will not direct daily work routines, but in their symbolic function as role models frame the values in which the work is done. The perception that a company treats its employees fairly, offers equal opportunity in career advancement or supports diversity is formed on the background of actual experiences, together with the assumed policies from the top. The often used phrase if they knew what was going on here catches the specifically sad but overall optimistic impression that things would be better if top level policies were in fact applied. Symbolic meanings are a side effect of nearly all managerial activities and sometimes the practical and symbolic value is intentionally linked. The most evident examples are conduct codes in corporate governance. The existence of a code alone symbolizes that order is looked for in this area. Its specific terms elaborate principles and specifics. However, the phrases of the code stand for something else, namely the behavior individuals should actually display. Consequently it is the actual practice of the management which decides how seriously the code will be observed. The policy that top executives have to work down the line one day a month is another example. They may in fact gather valuable insights there, but the symbolic implications of a management caring about the work on the shop floor are much more important. Also, careful symbolic action by entrepreneurs can significantly help to attract investments as a study by Christoph Zott and Quy Nguyen Huy showed some years ago. Often, however, the symbolic meaning of an action is not really reflected or just not considered. Recently a picture of a senior religious cleric in Russia, showed him wearing a watch worth the cost of a medium sized car. This of course raised questions about how the donations of the community are used. Some years ago a car company had to rename a product line because the name was also used as an offensive term in some languages. In Asia, managers lose deals unaware that to sit through a three hour dinner with lots of alcohol is a traditional way of closing them. These examples point to the problematic side of symbols, namely that they may emerge accidentally, out of negligence or lack of culture specific knowledge. There are two tragedies connected to symbolic management, one when symbols fail and one when symbols fall. Symbols can fail as they must stand for something and the relationship must be evident. It is an erroneous but fairly frequent belief that just setting a symbol stands for the real action. A variety of management behaviors fall into this class. Most prominent and significant is a corporate governance policy not supported by actual behavior at the top. However a new logo and corporate design as signs of a new age must also of course accompany and not just substitute a substantial change in the way things are done. The consequence of a failed symbol is disbelief. The perceived misfit between symbol and reality raises doubts and the generalized orientation given by the symbol gets lost. In the end empty symbolism becomes the subject of private jokes.

Managing Essentials
International
How symbols fall can best be observed in the political arena. To tear them down is one of the first major acts of any revolution. Events in companies are less dramatic in their form and all parties concerned try not to become the object of more public interest than is avoidable. But the effects are similar, ranging from a deep silent disappointment to anger and the physical destruction of material symbols. To optimize the fit between an action and its symbolic value is consequently crucial. In addition, the potentially wide field of associations must be considered. A way to achieve this goal is in many fields clearness and simplicity in action. Thereby the associative field is focused, misinterpretations become unlikely and the symbolic value becomes closely linked to the pragmatic one.
Pfeffer, J. (1981). Management as symbolic action: The creation and maintenance of organizational paradigms. In L. L. Cummings & B. M. Staw (Eds.), Research in organizational behavior (Vol. 3, pp. 152). Greenwich, CT: JAI. Zott, C. & Nguyen Huy, Q. (2007). How Entrepreneurs Use Symbolic Management to Acquire Resources. Administrative Science Quarterly, Vol. 52, pp. 70-105 www.managing-essentials.com/2d8