The Age of Neo-bureaucracy

A common theme in popular business discourse is the demise of bureaucracy and the emergence of a new, more liberating post-bureaucratic era. While subject to variation, common themes in this genre include organisations becoming less insular, hierarchical and rule-bound and more change-focused, enterprising and collaborative. Indeed, the persona of the manager as leader is a recurring image. A ‘high-flyer’, familiar with consulting and MBA techniques, experienced in a wide range of industry settings and jumping from one corporate turnaround to the next.

But as is so often the case in claims of fundamental change, there is good reason to be sceptical about the demise of bureaucracy and the birth of this ‘new’ 21st century organisational ideal. In our recent book Management as Consultancy: Neo-bureaucracy and the Consultant Manager, Andrew Sturdy, Nick Wylie and I argue that while large organisations are changing, there are also strong resonances with the past. Based on an extensive analysis of Australian and British corporations, we find that managers are becoming less explicitly hierarchical and more market and change oriented.

However, this is not a simple move away from departmental silos and hierarchical control per se. Rather we have entered an age of ‘neo-bureaucracy’ in which elements of traditional organisational practice are morphing with other more recent trends such as a focus on change, projects, ‘client’ relationships and boundary spanning.

For example, the managers and organisations we studied emphasised the integration of previously specialist functions through cross-functional project teams. They sought to generate change and innovation via standardised change programs and methods. Managers needed to use both authority and influence in managing relationships and organisational politics. Companies delegated some authority but balanced this with quasi-market checks and balances. Moreover, the identity of the manager has also changed with an emphasis on personal branding and network building.

A key example of this hybrid form of neo-bureaucracy is founded on the example of management consultancy, what we term management as consultancy, which is evident in the following developments.

Firstly, large organisations are increasingly recruiting former external consultants into management positions, especially those from ‘blue chip’ management consulting firms. This diaspora of former consultants brings with it a particular approach to managing, which, for example favours analytical and often standardized change and project management tools.

Secondly, management groups within organisations such as those in information technology (IT), accounting and human resources (HR) are increasingly taking on consulting roles and identities. Large accounting and IT firms have led the way here through their introduction of consulting services over the last several decades. But now the aim internally within organisations is to enhance the occupational status of specific managerial groups by borrowing from the prestige of external consulting. As one re-fashioned HR leader in a major IT firm claimed: ‘I’m not sitting behind a desk in an ivory tower, hidden … I’m very mobile, so if I need to be in another location, the car is under the building and I move, so I’m mobile and truly like a consultant.’

The third way in which management is taking on a neo-bureaucratic consulting form is through the creation of specialist internal consulting units. While a trend evident in industry for many years, these groups are now being modernized through a focus on ‘program management’ and ‘culture and change’. As companies seek out new ways to improve their performance, reduce costs and increase efficiency, these internal consulting groups provide another example of how managerial work is increasingly focused upon project-based change across the organisation for various internal ‘clients’.

Taken together, the result of these changes is an emerging new group of consultant managers in large private and public sector organisations which reveals important implications for the future of management and leadership as both an activity and occupation.

For instance, while the uptake of consultant managers can provide advantages in terms of accessing outside knowledge and expertise, it also raises the dilemma of whether these cosmopolitans have sufficient domain knowledge to be effective in their new settings. Added to this, we found that management as consultancy tended to focus on short term gains, ‘value added’ and using analytical, often mechanistic tools such as those taught on MBA programs. In this world, alternative approaches to management, stressing longer term goals and capability building, risked becoming marginalised. Finally, this new hybrid role of management as consultancy also provides a more precarious model of managerial work, in which activities become increasingly framed as discrete change projects subject to the whim of new CEOs or waves of job-cuts. As one consultant manager pointed out: ‘we don’t actually have proper jobs. If they abolished us tomorrow, what would change?’

The rise of the consultant manager also has implications for external management consultancy, a global multi-billion dollar industry which has grown dramatically over the last several decades shaping business organisations and governments worldwide. If management as consultancy continues to develop, then external consultancy risks both substitution and de-mystification. It would be as if the success of consultancy has paradoxically led to the demise of the external consultant! No doubt the consulting industry will respond to this and other threats, as it has in the past by projecting its expertise as a rare commodity and focusing on its ‘outsider’ role of providing managers with reassurance or legitimation.

Whatever the outcome, contrary to the rosy view of a post-bureaucratic nirvana, contemporary organisational life involves a curious blend of old and new; multi-functional projects, the standardized innovation of change programmes, a need to manage peers and subordinates as ‘clients’, and delegated autonomy of quasi-market structures across organisational relations. This is the brave new world of management as consultancy!

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