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The pros and cons of benevolent management

Professor Ghislain Deslandes from ESCP Business School & Professor Guillaume Mercier from IESEG School of Management

In an age where the discourses and methods employed by managers are often met with scepticism and disenchantment by their employees, there is an increasing demand to put benevolence back at the heart of management. Even before the Covid-19 pandemic made this even more pressing, we investigated the emergence and practice of benevolence and teased out some implications for the future of management.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” At the outset of his masterpiece which paved the road for capitalism – The Wealth of Nations -, Adam Smith swiftly rejects the idea that concern for the well-being and development of others occupies a central role in the economic relationship between client and supplier. This is not to say that he rejects benevolence in and of itself, simply that he does not consider it to be a requirement for “gentle commerce,” nor to constitute sufficient motivation for homo economicus – i.e. man as rational self-maximizer. In some respects, it could even be considered dangerous, since it presents an image of the business world as false as it is hypocritical.

And yet, confronted as we are with a crisis of morale affecting both managers and their teams (taking a broad variety of forms, from bore-out to brown-out), and the general crisis of trust traversing contemporary techno-capitalism in certain Western nations, the apparent renaissance of benevolence-focused economic discourse seems to represent a challenge to the confident assertion of the godfather of political economy. Furthermore, according to a recent global survey, only 50% of employees agree that their team leader effectively creates a vision for the future of the team, and this proportion continues to shrink. Successive ethical scandals (Madoff, Enron, Arthur Andersen etc.), combined with growing doubts over the sustainability of management methods, have created a situation in which concern for the well-being and development of others is an increasingly necessary item on the business agenda.

Moving past a crisis rooted in malevolence

This situation of general scepticism poses problems for economic development in general, with some scholars suggesting that “the long term health of organizations is under threat. There is a real need to create virtuous and compassionate [i.e., benevolent] organizations where employees feel more empowered and courageous to tackle the unique challenges of the twenty-first century.” This preoccupation with the meaning and legitimacy of managerial actions in an uncertain world can be felt in the shift in discourse operated by firms such as Google, and is increasingly reflected in the names of the modules taught in our business schools. By way of an illustration, French magazine Psychologies recently launched an appeal for major employers to display greater benevolence towards their employees, with companies including Orange, EY, Allianz and Ferrero among the first to get on board.

It is nevertheless worth noting that, at time of writing, few scientific studies have focused specifically on the concrete, practical results achieved by this new approach to management. Those studies which have attempted to do so have generally focused on results from experiments conducted in non-profit contexts. But what form should benevolence take within the context of a commercial organization? Is it even possible for benevolence to exist in these circumstances? Will it inevitably come into conflict with the economic objectives of the organization, or on the contrary will it succeed in reviving the atmosphere of trust which appears to be lacking in contemporary business?

Two types of benevolence to leverage

Based on an empirical study carried out in the context of an upward feedback system in a French consulting firm, our research allowed us to identify two distinct types of benevolence co-existing within the organization:

  1. Formal benevolence, which is defined and monitored by the organizational processes and actions of leaders; it is understood by all concerned to be bounded by organizational performance; it is a management tool and is considered to be sound managerial practice.
  2. Informal benevolence, meanwhile, is a system of influence with no official status, existing wholly at the discretion of those involved and operating via interpersonal relationships which have no formal recognition. Within this amorphous framework, with no preordained or verified processes, anyone can decide to be caring with the aim of friendship or nurturing mutually beneficial relationships.

It seems clear that these two independently existing forms of benevolence – one manageable, the other unmanageable, one based on the continuous improvement of processes and the other founded on the friendship and respect which individuals may develop for one another in the performance of their duties – are actually both crucial factors in the success of profit-oriented organizations and, in the long term, essential requirements for retaining talent.

Formal practices can spark motivation and help managers develop their benevolence

With this goal in mind, various tools may be put in place (feedback systems, rewards and punishments, monitoring, developmental tools, etc.) in order to raise awareness and understanding of the importance of benevolence, attempting to create a positive collective dynamic. In this context, a system of punishments and rewards is not the most effective option. It is much more important that managers themselves, particularly those at the top level, should be seen to apply the rules and principles of these tools in their own day-to-day behavior. As Aristotle might have put it, benevolence is a virtue acquired over time through practice. In a way, managers are the guardians of this practice.

Organizations can thus plot a path of benevolence for their members to follow, setting a minimum standard. However, it is important to note the possibility that profit-oriented organizations might use the same tools to prevent their employees from becoming “too” benevolent: they may be wary of certain forms of benevolence that might be considered incompatible with performance (e.g. a manager being attentive to an individual colleague’s well-being and needs, even at the expense of team efficiency). It would surely not be too pessimistic to suggest that formal benevolence always remains more or less subjugated to the performance targets of the profit-oriented organization in question. Will managers not always receive greater recognition for increasing their performance figures than for increasing the level of benevolence?

Giving room to employees to develop informal benevolence

At this juncture it is important to note that artificially encouraging benevolence is all very well, but it is no replacement for letting relationships develop organically, regardless of performance considerations. The challenge for top and middle management is not to manage informal benevolence, which is by definition impossible, but instead to “live and let live,” if necessary displaying tolerance even if it comes at the expense of organizational performance in the immediate short term. This pro-active attitude may take the form of creating dedicated social spaces, for example, where employees can have real discussions, interact with one another, socialize and establish virtuous circles of benevolence founded upon interpersonal relationships of mutual gratitude and indebtedness.

Genuine benevolence should not be bound by profit

Formal benevolence is too often seen as a mere instrument for boosting profit, but informal benevolence may ultimately serve to broaden this perspective: benevolence can (or should?) become a genuine interest in the well-being of others. But in order for this possibility to become reality, we need to acknowledge that creating a professional climate in which benevolence can flourish requires a change of mentality, an acceptance of the intrinsic virtues of benevolence. Informal benevolence is more likely to emerge if top managers are credible and convincing in expressing the importance they attach to benevolent behaviour, without directly linking it to the profit motive on which their duty to their shareholders hinges.

In short, benevolence can only be a fundamental choice taken on an individual basis.  This raises a “benevolence paradox”: benevolence is more efficient (in influencing beneficiaries’ behaviour) when it does not appear to be directed at this objective, when it is felt to be authentic. Ultimately, one of the great virtues of benevolence is to provide an opportunity for leaders, managers and employees to reflect upon the ultimate aim of their personal (corporate) life, a respite from constant profit-focus. A virtue which was not lost on Adam Smith himself, whose works also include a Theory of Moral Sentiments, in which he suggests that “to indulge our benevolent affections” would constitute the very perfection of our desires.




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