Development -as I can perceive it -is a mental and social process, centred on the promotion of man. Although social and economic aspects go hand in hand in development, in essence I see it more as a social process with economic expressions than as an economic process with social repercussions. This, in my view, cannot be stressed sufficiently and I would like, at this point, to quote some thinkers of the most diverse origins to show a universal recognition of what, in essence, is the notion of “development”.
Here is a definition by the great contemporary French economist, Francois Perroux: “Development is the combination of mental and social changes in a society, which prepare it for the accumulative and lasting growth of its gross national product.”
Here, another comment by the well- known writer, Robert L. Heilbroner, of the U.S.A.: “We tend to overlook the fact that this kind of strictly economic development requires as a precondition the existence of a society in which wealth can be accumulated and in which incomes and employment are capable of being progressively enlarged”… “The critical fact about the underdeveloped countries is that they do not yet have the institutions, the habits, the foundation of skill and wealth which are preconditions for a sustained economic climb.” And so we can find an entire range of commentary from the famous neo liberal, Wilhelm Ropke, who dedicates whole chapters to the basic conditions which he calls “Socio-spiritual”, signaling these as “the infra-structure of development”, up to great encyclical letters, such as Mater et Magistra and Populorum Progressio which insistently stress the fact that the spur towards development, its root and its aim, all lie within man himself.
Now, why do we tend to recoil from such an obvious fact? A fellow- countryman of mine, Joaquin Sanchez Coviza, has put it very clearly:
“Ideological factors are supposedly the premises which condition the economic development of different societies and yet these premises are frequently ignored because, from the point of view of the professional economist, they cannot be reduced to ostensible economic terms, nor can they be easily incorporated in econometric models.”
Human Barriers Impede Development
I do not believe that anyone today would dispute the fact that the barriers which impede development are human, not economic; are less a question of capital and natural wealth and more a matter of attitudes and institutions.
In short, barriers which are less material than social and cultural. Achievements in economic terms frequently fail in terms of our scales of values which find their expression in a series of political and social turbulences which weaken our foundations.
A good example would be perhaps the concept of “productivity”- that ineluctable condition to abolish poverty. Productivity tends to be seen as merely a matter of optimum performance and effective reinvestment of national income, whilst forgetting that in its nucleus lies an emotional and mental attitude towards human effort and progress.
On a previous occasion, I ventured to suggest that the process of “development” should be seen as a “social system” composed of a number of human sub-systems which are perpetually interacting in a reciprocal and regular pattern and that we should not waste
our time in searching for sole reasons or primary causes. Better results can be obtained through the study of the interacting variables which make up the developmental spiral.
Every social system can be visualized in terms of groups of people who are occupied in exchanging their resources on the basis of certain expectations.
These resources are constantly being bartered and they are certainly not limited to material resources alone for they include ideas, feelings, skills and values. Furthermore, it appears to be characteristic of social systems that a determining factor in their interchange of resources is a justice that can be perceived. In the psychological contract between men and systems, men and groups and between systems and sub-systems, that old and cynical question will always come ‘to mind:
“What have you done for me recently?”
When the feeling of reciprocity dwindles away, a change will occur within the system.
Underdevelopment is a Consequence of Historical Undermanagement
Now, in all parts there is an increasing  awareness that economic and social development is basically an outcome of management and that underdevelopment is the consequent result of a historical undermanagement.
Of course, there is nothing new in this. Development in general, as most social achievements, is effected through and within organisations, “institutions” if you want. They have to respond to the quality of life that develops within them, and for the fulfillment of our social values.
Management constitutes the arduous process of motivated integration of human efforts toward the achievement of shared goals. It is, as somebody said, the co-ordination of many social energies, many times clashing with each other with such skill that the totality can function as one sole organism. If I recall well, it was Servan-Schreiber who coined the phrase that management after all is the most creative of all arts, as it is the art of organising talent. The principal task of management perhaps boils down to one function: making knowledge socially productive. This basically constitutes the social responsibility of management.
The Fundamental Dilemma of Development and Management
At this point, I should like to break off for a moment and mention a fundamental dilemma which, in my opinion, is to be found at the bottom of every idea about development and management. As a manager myself, I would like to discuss this dilemma in terms of decisions.
We can distinguish two extreme types of decisions which take place in human affairs. Macro-decisions which affect society as a whole, and micro-decisions, those which we take on a daily basis during the pursuit of our activities in general, whether private, business or institutional. These latter are the kinds of decisions which we take in order to purchase a pro duct, employ a certain person, or give instructions. However, this multitude of micro-decisions -and here I think we reach the root of the problem — very often end up in very unsatisfactory macro-results. We can see these unpleasant macro-results in inflation, unemployment, undesirable technological impact, labour problems. On the other hand, if everything were to be based on macro- decisions and consequently, if every thing were to be controlled by the State, we would end up with a giant bureaucracy and the consequent loss of personal autonomy, creativity, innovation and initiative which are fundamental factors in development of every type.
In brief the result would be the oppression of human beings.
Now we have to confront the problem of finding a compromise in which we can reach an optimum balance between enough “macro” to pursue the satisfaction of collective needs and enough “micro” to foster personal growth, achievement, motivation and self-actualization of the individual.
We are already aware that the “invisible hand” of Adam Smith does no longer function well, nor does the manipulation of motivations and behaviour by a technocratic elite; the solution put forward by many that private interests should totally abdicate in favour of the  public interest, also seems unworkable. It appears then that everything will depend on a process of re-education which will allow us to perceive how to arrive at optimum macro- decisions through the exercise of micro-decisions which will lead us towards the best results. And then the most important of all:
These results will depend on the vital transformation of the cultural values which will back up and support this process of change. Just as changing values need institutions to give them expression, structural changes demand a change of values in order to be able to function. With alarming frequency, we tend to forget that there exists a basic, reciprocal activation between structures and values,
The New Field of Management
The field of the transformation of values is indeed the new field of management, and here lies one of its first social responsibilities — not only for the capitalist firm, but also for the socialist enterprise and within the compass of auto-gestion, congestion and any other type of formula which could be applied. This is not a particularly new idea. Basically, it is concept of Aristotle who saw that every management has to be judged by the virtues and vices which generates and who maintained “society exists for the sake of noble actions”.
Every leader acts according to his own vision of the future, even only to avoid his being its victim. Our social values have not such a siege since the Reformation; there has not been so much anxiety about the quality of life on this since the Renaissance.
Leaders are the great catalysts change while new structures are needed to shape new values, As I have we also understand to an increasing extent that structural change cannot be achieved without simultaneously receiving support from a change values. Perhaps it is here that we can find the reason for the failure of many structural changes. If we not work at our values simultaneously, we will be unable to sustain structures. I believe that this is the most transcendental change prompted by management: The creation of  conditions and the forging of the transformation of values which can make our institutions more viable and more vital.
The incongruence between values, structures and processes can be seen in many of our economic institutions. In some way, we feel as if many of them are not consonant with our supreme social values. Frequently, humanistic and transcendental values become a luxury which is superimposed on economic values instead of being the yardstick of their good will.
The Era of Systems
Here, I would like to dwell for a moment on an issue which is fundamental in contemporary management, which is to think in terms of systems. Many believe that the era in which we live will be remembered in the future as the Era of Systems when man managed to express, understand, and foretell the way in which the threads of his social web would interact.
The leaders of the future will be architects of systems, able to foster an optimum balance of specialization from their viewpoint of the whole structure. They will continue to be strategists and planners and, for a long time, they will continue to take decisions and solve operational problems. However, their great contribution will be in getting things to run smoothly in gradually loosening restrictive controls and, above all, in diagnosing, designing and conceptualizing systems which will have the power of self-diagnosis and the ability to solve their own problems and generate their own progress.
These leaders will be the monitors of development. Their most important function will be that of scrutinizing, investigating and constantly revising systems. Their task will be to read the signs of their times, to detect symptoms, to ask questions. They must have a high tolerance of ambiguity because their style of management will be one of uncertainty, complexity, inter-dependence, and their perspective will be that of the seventeenth century poet, John Donne, who wrote “No man is an island”; that we are all enfolded in a total humanity; that it is useless to ask for whom the bells toll, as they toll for us all.
The planning of open systems is rapidly becoming the last word in administrative science. Scientists of the category of Richard Beckhard and James Clark are successfully applying this new type of planning to companies of all kinds.
The planning of open systems can be divided into seven stages:
I) Definition of the system’s “core process”, or basic mission.
2) Identification of the surrounding “demand” systems.
3) Definition of the manner in which these expectations can be met.
4) Projection of future expectations which will subject the system to pressures.
5) Outline of the ideal climate for these expectations (What type of demand would we like to have?)
6) Activities which must be per formed in order to attain this ideal climate.
7) Cost-effectiveness analysis.
Management’s Social Responsibility
At this point, may I say another word on management’s social responsibility, particularly with regard to private enterprise Perhaps I should start by expressing my interpretation of the concept of “responsibility”. I do not believe responsibility can be imposed, nor does it come from a sense of duty; it is derived from affection, it is the desire and disposition “to respond”. Responsibility must, of necessity, be felt from within.
Indeed, in philosophic terms, I believe that the responsibility of private enterprise and, therefore, the responsibility of management is fundamentally the consequence of a fact, and this fact is that the company is in a position of power; of economic power because of the force it exercises in the market; of social power because it is an association of people who have aims in common. And it is from this power, recognized and conceded by the community, that the company derives its social responsibility and from which is derived the social responsibility of its management. If there is one fact which seems to be true throughout the history of mankind, it is that power without responsibility—which is power without love — will ultimately be self-destroying.
As I have already pointed out, a company is a melting pot of ideas, attitudes and values because it is an association of people. Working together fosters ideas, attitudes and values. Ideas, attitudes and values forge the structure of society.
If the character, conscience, fears and longings of a man can be said to be conditioned by one factor alone, it is by the group to which he belongs. This, I believe, is the basis of a vital aspect of management’s social responsibility.
With regard to “external” social responsibility, this implies the necessary and vital response to the expectations of the environment in which the company moves. In this connection, it would not, perhaps, be out of place to remind ourselves of some old- fashioned ideas which we all accept, more or less, as self-evident truths. Man himself is the yardstick of all values, Things are made for man and man is not made for things. For this reason, a company can never be an end in itself. The company is a means to this end. And its end is man. And if enterprise wishes to survive, its “cause” must also be man. Man is the basic product, as well as problem for any enterprise. At this point, we should remind ourselves that if moral goals are invoked but not felt, they cannot convince but tend to produce the reverse image. This is the image of cynicism which society will not tolerate because it recognizes the sound of the genuine coin, and senses that the spiritual values which are the most precious possession of man kind, are being toyed with by vested interests.
When we speak about the social responsibility of enterprise, we start, of course, from the premise that enterprise owes a debt to society whose legal system created and sustains it. Naturally, this premise rejects entrepreneurial individualism and the idea that “Business is Business”—that antique pretext to escape social obligations and concentrate solely on self-interest.
For some time now, the world has been facing a dilemma. This dilemma is not the choice between capitalism and communism but the choice between humanism and bureaucracy. Here is the vital question: Does the individual reign supreme, and is society a means by which his welfare is achieved, or is society supreme and is the individual a pawn which can be used or destroyed according to the convenience of society? Here, two rational concepts are face to face: individualism and collectivism. Neither one is able to cross the abyss between the human being and his community. This abyss cannot be crossed by logic but only by an emotion. This is the emotion of union, solidarity and fraternity. But, in order for this emotion to grow and spread, society must perceive itself as a spiritual organism and not only as an economic machine.
We can visualize human progress as being a great spiral. A circular process which is derived from felt needs, followed by great efforts to satisfy these needs, and translating them into tangible results. In order that this process can be again renewed, the original needs must be continually matched, so as to give birth to new efforts. Throughout this process, the leader plays a fundamental role.
However, it is often the case that satisfactory comparisons cannot be found because leadership has dispersed the original needs which are its birthright. In the blindness of success, the arrogance of power, or the desire for even more power, the leader has come adrift, and has fallen into the tragic condition of forgetting that true leadership, more than a matter of legality, is a psychological and sociological right which must be constantly reconquered.
The Importance of True Leadership
The solution to this stumbling- block which confronts every leader is as obvious as it is complex. It lies in the difficult attainment of greater self-perception, of self-knowledge and understanding, of impartial and constant detection of the human factors which have led the leader astray and which endanger the vital comparison of the needs felt by those who bestowed leadership. If a leader wishes to survive as a leader, he must develop his ability to correct and rectify whilst there is still time.

Related News