DOCUMENT RESUME

ED 251 015 HE 017 876

AUTHOR Pichler, Joseph A.TITLE Executive Values, Executive Functions, and the

Humanities.INSTITUTION Association of American Colleges, Washington, D.C.;

r 'nal Endowment for the Humanities (NFAH),ington, D.C.

PUB DATE Apr 83NOTE 15p. Paper presented at a conference sponsored by

the Association of American Colleges and the NationalEndowment for the Humanities (Princeton, NJ, April27-29, 1983). For related documents, see HE 017872-879.

AVAILABLE FROM Office of National Affairs, Association of AmericanColleges, 1818 R Street, N.M., Washington, DC20005.

PUB TYPE Viewpoints (120) -- Speeches/Conference Papers (150)

EDRS PRICEDESCRIPTORS

MF01/PC01 Plus Postage.*Administrators; *Business Administration Education;*Creative Thinking; Decision Making; Education WorkRelationship; Higher Education; Humanistic Education;*Humanities; Liberal Arts; *Problem Solving;*Values

ABSTRACTThe benefits of studying the humanities to the

business executive are considered. The humanities can help developboth the values and functional skills that are necessary forexecutive success. Competence in value analysis helps futureexecutives to understand the full implications of the economicsystem, especially when it is followed by the study of microeconomicsfrom a liberal arts perspective. The humanities, particularlyphilosophy and literature, can play a significant role in approachingvalue questions. Executive action requires a balance between creativeand integrative abilities and execution and control responsibilities.Business curricula teach students to develop systems of control andexecution through study of fields such as finance, production,marketing, and accounting. Certain business disciplines also developskills in evaluating alternative strategies, structures, andtechnologies. Business subjects are comparatively weak in developinga facility for generating opportunities: exploring their fullimplications, and presenting choices to form a coherent strategy.Literary studies offer a broad spectrum of experience and skills thatare significant for the creative and integrative dimensions ofexecutive action. (SW)

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Executive Values,Executive Functions,and the Humanities

"PERMISSION TO REPRODUCE THISMATERIAL HAS BEEN GRANTED BY

TO THE EDUCATIONAL RESOURCESINFORMATION CENTER (ERIC)"

josephA.PichlerPresidimt.

Dillon Companies Inc.

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Summary

Every individual must address and resolve certain valueissues in order to lead a humane life. Executives mustdeal with an additional set of questions regarding thepurpose of the economic systems, the function of businessactivity, and the relationship between their personalmoral codes and professional responsibilities. Thehumanities, particularly philosophy and literature,have a significant role to play in approaching thesequestions. Humanistic study, when followed by a liberalarts approach to microeconomics, enhances the individ-ual's ability to gain a value persepctive upon businessactivity. Such a perspective enhances an executive'sability to infuse decisions with humanistic values.

The humanities may also make a significant contribu-tion to the performance of executive functions. Busi-ness courses have a comparative advantage in teachingfuture executives to develop systems of evaluation,execution, and control. The humanities have an advan-tage in developing a predisposition for creative andintegrative thinking. These qualities of mind are morelikely to be instilled if the humanities are taughtfrom a humanistic rather than a technical perspective.

*Joseph A. Filcher is President and Chief Operating Officer ofDillon Companies, Inc. In January, 1983, Dillon Companies,Inc. became a wholly-owned subsidiary of The Kroger Co.

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Executive Values, Executive Functions, and the Humanities

Introduction

The concept of "successful executive" is difficult todefine in general terms. Each of us has particularinterests and values that are vital to our personal def-inition of success. Each of us has a perspectiveupon economic activity and the goals that it shouldserve. Yet, most of us would agree that executivesachieve the necessary--if not sufficient--conditionsfor success if they:

1. Develop and fulfill a personal code forhumane behavior.

2. Fulfill our society's standards for moralbehavior.

Generate long-run economic prcfits forshareholders.

4. Provide employees with the earnings andworking conditions necessary for a satis-fying life.

The first two conditions are value statements thatapply to all of us simply because we are human. Thethird and fourth are particular to business. They haveinstrumental as well as value content: an executivewho lacks the technical ability to generate profits andstable employment will have a very short business career.

This paper discusses the contribution which the hu-manities can make toward the development of both thevalues and functional skills that are necessary forexecutive success. It is a treacherous undertakingbecause there are more than two million corporationsstretched across several hundred industries in America.Each has its own problems and opportunities that requireparticular shadings of executive talent. However, Ibelieve that there is a level of generality--not sogeneral as to be useless--at which the similaritiesamong these senior positions permit certain common re-quirements to be identified. This is confirmed, atleast in part, by the successful interindustry mobilityof notable executives such as George Shultz, ArmandHammer, and Franklin Murphy.

The first section of this paper treats the relation-ship between the humanities and the executive values.

The second focuses upon the potential contribution ofthe humanities to executive performance.

Value Issues for Executives

Every individual must grapple with value issues in orderto lead a humane life. "Why am I here? What are myresponsibilities to other individuals? To the communi-ty? To the inhabitants of other communities?" Thehumanities have a significant role to play in awakeningthese questions and assisting every individual in alifelong search for answers.

Executives must also grapple with value issues thatare specific to their calling:

1. What are the material purposes of an economicsystem? Does capitalism fulfill them?

2. What are the moral and social requirementsfor economic systems? Does capitalismfulfill them?

3. What are the public policy requirements ofcapitalism? Does my firm behave in accord-ance with them or does it earn profits bysubverting these requirements?

An I able to practice my personal moral codein exercising professional responsibilities?

If executives fail to acquire a value perspectiveupon the economic system and upon their own participa-tion within it, they risk becoming either technocratswho make decisions without regard to humane implica-tions or alienated souls haunted by their failure tointegrate professional careers with personal standards.The first group is dangerous; the second, pathetic.

The consideration of moral, social, and aestheticvalues is inherent in the study of humanities. Thesesubjects are rich sources for developing a personalcode and a value perspective upon the economic system.Philosophy, expecially logic and ethics, offers theanalytic framework for clear thoujht about such corevalues as liberty, justice, generosity, and.integrity.Knowledge of ethical principles sensitizes executivesto consider the moral implications of their actions.

Literature breathes life into these philosophicalconstructs. Moral questions and conflicts are the rawmaterial of novels, drama, and short stories. Thereader is challenged to identify the value issuesposed by characters and events, observe the effects ofvalues upon the interplay of characters and their re-sponses to social and natural forces, and trace theimplications of values for their absence) as the plotdevelops to resolution. Poetry is remarkable for itspower to pose such issues with startling economy ofianguage. Who can read the last lines of Ozymandiasor Richard Cory without being jolted by the evanescenceof power and the emptiness of wealth?

Area studies and anthropology offer opportunities totrace the cultural development of values and their im-pact upon societal structure. The present alternativesagainst which our own culture may be compared. Myth,legend, and folklore depict conflicts between good andevil with stark intensity.

Political science and jurisprudence analyze the pro-cesses by which societal values achieve expression inpublic policy. These fields also trace the converseeffect of public policy upon the further development ofsocial and individual value. Comparative analysis illus-trates the impact of alternative values upon politicalstructures in other nations.

The formulation of values through humanistic studymay well be enhanced by the process of creative andcritical writing. It would be difficult to documentthis observation empirically. However, anyone who cor-rects scores of student essays soon recognizes thatthe tendency of beginning writers to wander from anoriginal theme often reflects insight and development.Writing is an "act of discovery" for the author.'

Competence in value analysis helps future executivesto understand the full implications of our economicsystem, especially when it is followed by the study ofmicroeconomics from a liberal arts perspective. Thisapproach analyzes capitalism in terms of the societalfunctions that must be performed by any system of polit-ical economy: the allocation of resources to createnational wealth and the distribution of income. Itidentifies individual liberty as the primary philosoph-cal principal of capitalism, describes public 9olicyconditions that define the system, analyzes the com-petitive dynamic that is both generated and constrained

by those conditions, and considers the classes of eco-nomic problems (such as natural monopolies) that can-not be adequately resolved by capitalism.

Each of these economic topics raises a host of valuequestions. "What is liberty? What are its limits? Howdoes capitalism serve other values such as justice,security, and social cohesion?" Thoughtful considera-tion of these questions requires a fluency in valueanalysis as well as training and economic reasoning.The humanist is oriented to identify the full implica-tions of economic activity and to visualize the humanprocesses that drive supply and demand toward equilib-rium. Those who have read Galsworthy's Quality orSteinbeck's GraTes of Wrath should ask different ques-tions about capitaliimTiifficiency than the technocratwho is impressed solely by the elegance of Paretooptimality.

Ideally, this liberal arts introduction to microeco-nomics is succeeded by an analysis of comparativeeconomic systems. Contrasts between capitalism andalternative systems illuminate the value implication ofeach. Prior exposure to area studies is extremely help-ful in this process.

Executives who gain a value perspective on capitalismenhance their chances of achieving harmony between theirpersonal and professional lives. They have a "sense ofplace" within the broader societal context and under-stand the underlying purpose of their activities forhumankind. In decision situations that pose seriousnormative questions, they go beyond the "quick fix" andattempt to generate solutions that preserve both valuesand profits. A brief example will illustrate the point.A year ago, one of the major firms in our industry wasapproached by a religious group who complained that thecompany's convenience stores were carrying "adult" (orin today's parlance "sophisticated") magazines. Thechurch members found these publications offensive anda moral danger to children. They informed the corpora-tion that a citywide boycott would be initiated againstthe firm's supermarkets, which did not carry the maga-zines, as well as the convenience stores. Companyexecutives were divided on the issue. Some argued thatthe request should be ignored because the church hadonly a small membership who would probably be incapableof mounting a successful campaign. Others felt that theoffending materials should be removed, despite theirsubstantial profitability, in order to avoid negative

publicity and remove any economic threat. A third groupopposed the removal on policy grounds. They argued thatother citizens' groups opposed to cigarettes, videogames, beer, or soda pop might be encouraged to threatensimilar action in support of their particular causes.The solution that was ultimately adopted addressed bothvalue and economic questions. The corporation developeda policy that emphasized the liberty of all parties.The offending magazines were moved to the back row ofthe bookstall where they could not be easily seen byyoungsters. An opaque board was placed over the coverphoto of each magazine so that only the title and datecould be read. Those who thought the pictures were of-fensive were no longer subjected to an unintended view-ing. Children younger than eighteen were strictly for-bidden either to view or purchase the magazines. Thus,the material was removed from the reach of minors, thefreedom of consenting adults to purchase legal publica-tions was preserved, and the book covers were hiddenfrom the view of adults who found them offensive. Thisresponse to the underlying moral and economic issueswas acceptable to all parties. Such dual solutions canbe achieved more often than is generally thought whenexecutives are able to analyze value issues effectively.

Executive Functions: Control, Execution, and Creativity

It is difficult to develop operational descriptions forexecutive positions. Those that exist usually emphasizefinancial and legal responsibilities. For example, thedescription for Chief Operating Officer might read:

Responsible for the overall profit of the firm.Identifies profit opportunities consistent withthe firm's stated purposes. Participates inthe development of strategic goals and budgetsto realize those opportunities. Develops oper-ating plan to achieve strategic goals; monitorsexecution. Allocates budget and reviews ex-penditureb for consistency with operating plan.Selects managers and key staff; directs and co-ordinates their activities; evaluates perform-ance. Establishes policy to ensure that thefirm operates in compliance with legal obliga-tions.

The words "division, department, or product line" re-place "firm" for positions one echelon lower. For staff

jobs, the descriptions emphasize the appropriate disci-pline and the position's supporting role to operationsand policy.

Such descriptions are generally followed by a summaryof the qualifications thought desirable for successfulperformance: education level, previous experience,field of specialty, etc. The combination of positiondescription and qualification summary is useful for com-municating the scope of authority and responsibility toapplicants, incumbents, and other members of the organi-zation.

In my judgment, the elements of successful executiveaction can be stated much more succinctly:

1. Creates moral and legal profit opportunities.

2. Evaluates and chooses those opportunitieswhich, in combination, yield the highestlong-run benefit to the firm.

3. Executes choices, in collaboration with sub-ordinates, and monitors results.

4. Performs all of the above simultaneously.

This "position description" emphasizes the creative andintegrative abilities that are central to executiveaction, while recognizing execution and control responsi-bilities. The balance is essential.

Thomas Mann's Death in Venice portrays the complextension between creativity and discipline that drivesand haunts the artist. Unless the conflict is resolved,artistic genius degenerates into dilletantism or styl-ized rigidity. A major function of executives is togenerate and continuously resolve the same tension with-in the firm. If creative forces overpower internal con-trols, the company soon founders. Programs fail ascontinuous shifts in direction exhaust resources and

prevent effective execution. If, on the other hand,excessive controls stifle creativity, the firm becomesclosed to the environment and eventually loses its mar-ket to more innovative competitors. In management par-lance, the firm must maintain an entrepreneurial vital-ity within the context of operating efficiency.

The business curriculum has a comparative advantagein teaching students to develop systems of control and

execution. The functional fields of finance, prcduc-tion, marketing, and accounting offer principles andtechniques for establishing orderly channels of sup-ply and distribution, arranging production processesin logical sequence, recording relevant transactionswith routine accuracy and timeliness, and assuringthat assets are devoted to the firm's purpose. Thefields of management and personnel provide comparablesystems for recruiting and training human resources,distributing authority and responsibility within theorganization, and establishing channels of communica-tion. Effective controls enable executives to meettheir fiduciary responsibilities to the owners andprovide information necessary for improving operatingefficiency. Effective execution systems free execu-tive time for considering new profit opportunities.

Certain business disciplines reach well beyond con-trol and execution activities to the derivation ofpowerful analytics for evaluating alternative strate-gies, structures, investments, and technologies. Thesesubjects include applied price theory, operation re-search, capital budgeting, consumer behavior, and organ-ization theory. All are grounded in some combinationof economics, mathematics, and the behavioral sciences.Executives who have a solid background in these liberalarts fields plus exposure to the derived business dis-ciplines are well equipped to identify the criticalvariables in a broad range of complex problems (or op-portunities), cast the alternatives into one or moreanalytic models, and estimate the outcome of each interms of expected value and risk.

Application of these sophisticated evaluation tech-niques presupposes the existence of alternatives. Theloss from failure to identify the most desirable optioncannot be recouped by a correct analysis of lesseralternatives. Similarly, the failure to consider thefull ramifications of each choice may result in a faultydecision. For example, market research might indicatethat a proposed product will achieve immediate consumeracceptance and generate revenues well beyond productioncosts. However, the product might be doomed to failurebecause of its relationships to certain factors withinthe company's internal or external environment: perhapsit cannot be distributed through existing retail chan-nels; or its raw materials are imported from a nationwith an unstable government; or its brand name containsan unintended racial slur; or its technology can beeasily copied by low-wage foreign producers. Regular

readers of the Wall Street Journal may amuse themselvesby listing the corpoMis that have committed thesestrategic errors within the past year.

Business subjects are comparatively weak in develop-ing a facility for generating opportunities, exploringtheir full implications, and orchestrating choices toform a coherent strategy. The professional courses thatprobably come closest to these goals--price theory,organization theory, and consumer behavior--are rootedin liberal arts disciplines. In general, business mustrely upon the arts and sciences to develop creative andintegrative dispositions of mind. The humanities canmake a particularly significant contribution.

A great executive once wrote:

"As the minimum function of the administra-tor is ordering the means (to the ends), sohis highest function is discovering andclarifying and holding before his institu-tion the vision of the end."2

The author was also a great humanist...Robert M.Hutchins. Executives have a greater ability to identifyand generate opportunities if they possess an integratedvision or concept of the firm. Those who can articu-late that vision to peers, subordinates, and associatesmay enlist those parties in the search for promisingalternatives. The integrated concept provides an organ-izing perspective from which to scan the environment,screen the barrage or random stimuli, and identify thosethat are potentially valuable. The concept must beevolutionary if the organization is to maintain a senseof direction as it casts off unprofitable programs andundertakes more valuable activities. It is the "centerthat holds" to prevent "things from falling apart" asthe enterprise develops.

Let me illustrate with an example from my own busi-ness. The supermarket industry is highly competitive:no firm accounts for 10% of national sales, entry ofnew firms is relatively easy, and profits average aboutone penny for each dollar of sales. A firm's successor failure is highly dependent upon the way in whichits executives answer two questions: "What is a super-market? What might a supermarket be?" The Nast prof-itable firms have maintained the traditional concept ofthe supermarket as "a place to buy groceries, meat, andproduce." The most profitable have conceptualized the

store as "flexible space which may be allocated and

reallocated among foods and non-durable products in re-sponse to shifting dertographic variables, employmentpatterns, lifestyles, regulatory requirements, utilitycosts, etc." Executives in these firms continuallysearch for new environmental elements that can be re-lated to the purchase of household products normallyconsumed or used within two weeks. Thus, modern urbanstores are designed to serve the large population oftwo-earner families who prefer one-stop shopping inorder to conserve time. The facility is large--up to70,000 square feet as compared to the industrial aver-age of 23,000 square feet--to offer a wide range ofconsumables. "Speciality shops" are arranged, like amedieval fair, around a center core of dry groceries.The shopper may patronize a bakery, delicatessen, fishmarket, pharmacy, film development service, florist,periodical shop, and cosmetician under one roof. Thisclustering saves the time and frustration of visitingmultiple stores and the high sales volume permits thespeciality items to be sold at favorable prices. Thestore offers lean cuts of meat, wholegrain breads, andhealth foods that range from granola through tofu be-cause of current consumer interest in nutrition. Thebuilding has no furnace but is warmed by sophisticatedequipment that captures heat from refrigeration unitsin order to save utility costs. With the recent deregu-lation of the transportation industry, trucks thatdeliver merchandise to the store are rerouted to a pro-duction plant and loaded with new products for "backhaul" delivery to the warehouse.

This extended illustration is but one example of theway in which an integrated, multi-dimensional .conceptof an enterprise may generate relationships with a widerange of environmental factors to produce profit oppor-tunities. The concept provides the "hooks" on which tohang innovative merchandising and operating ideas.

If executives lack either the disposition to concep-tualize or the ability to form complex relationships,they will ignore those environmental factors or be in-capable of organizing them into coherent opportunities.Humanistic studies have a special capacity for instillingthese qualities of mind. Philosophy develops a facilityfor forming clear concepts, generating and testing rela-tionships, drawing inferences, and constructing complexlogical chains. The discipline's emphasis upon second-order effects teaches the importance of looking beyondinitial conclusions to further implications.

Literary studies offer a broad spectrum of experienceand skills that are significant for the creative and in-tegrative dimensions of executive action. The processof forming a vision of the firm is remarkably similar tothe process of identifying a plot in a complicated novel.When executives make presentations to a board of direc-tors, financial analysts, or shareholders about the cur-rent status and future prospects of a firm, they engagein the process of "story telling." For the story to beeffective, it must capture the character of the firm,identify the environmental forces that impinge upon it,and trace alternate scenarios that respond to thoseforces while being consistent with the organization'scharacter.

Literature is also an important vehicle through whichexecutives may learn to picture alt-rnative states ofthe world and consider their ramifications. A vividimagination is valuable for generating alternativecourses of action and visualizing new products or pro-cesses. These flights of fancy are quite natural forthose who have been regularly transported through spaceand time by reading. There is some empirical evidenceto support the proposition that liberal arts majorsare more creative than engineering or business majors.3

Executives spend a great deal of time talking andwriting. They address a wide range of audiences: thegeneral and trade press, investment bankers, unionofficials, employees of all ranks, etc. The topicsand circumstances cover an equally broad spectrum, fromlabor negotiations to annual reports to policy direc-tives. Communications must be clearly phrased in termsappropriate to each audience. Careful attention mustbe paid to the nuances of language and to the contextwithin which the message will be heard. Successful com-munication under these circumstances requires a commandof language, and ability to empathize with the listener,and a good "ear" for connotative meanings. Literarystudies are an important avenue for developing theseskills, especially when they are taught in a manner thatrequires a substantial amount of writing and oral discus-sion.

The economic condition, assets, and policies of mostfirms simultaneously reflect historical decisions andconstrain future choices. Newly appointed executivesquickly learn that organizations have a certain momentumor inertia that cannot be swiftly changed except under

crisis conditions. Those who wish to introduce changeeffectively study the past reasoning processes and re-source conditions that produced the firm's currentdirection. An understanding of these historical ele-ments improves the evaluation of current options ar,d,if a new strategy appears appropriate, enables theexecutive to explain the basis for change. This isparticularly important for enlisting the support ofothers who may have been involved in developing pre-vious strategies. Executives have a dual advantage inthis form of analysis and communication if they havestudied history. First, they are predisposed to lookfor the historical grounding of contemporary events.Second, they have had some practice in tracing the fu-ture implications of historical forces and have learnedthat future opportunities can often be predicted bycarefully considering the implications of contemporarydecisions.

In summary, the humanities are important fields of.dy for future executives because of their emphasis

upon value analysis and because of the contributionthey can make to the development of the creative-inte-grative faculties. The combination of these disposi-tions with the evaluation, execution, and control skillstaught in professional courses forms an ideal balancefor executive education.

A note of caution is appropriate for closing thisdiscussion. Study of the humanities does not guaranteethat an individual will develop creative and integrativequalities of mind. If the humanities are taught in adisintegrated fashion, their contribution will not bemuch different from technical training. The game islost when a student's only exposure to the humanitiescomes in the form of history courses that are merelysequences of dates and names, literature courses thattreat creative works as so many pieces of empirical datato validate an abstruse linguistic theory, and philos-ophy courses that immediately accelerate into the hyper-space of mathematical symbols. In short, the humanitiesmust be taught humanistically, at least at the earlystages, for the future executive to reap their fullbenefits,

SummaryEvery individual must address and resolve certain valueissues in order to lead a humane life. Executives mustdeal with an additional set of questions regarding thepurpose of economic systems, the function of businessactivity, and the relationship between their personalmoral codes and professional responsibilities. Thehumanities, particularly philosophy and literature, havea significant role to play in approaching these ques-tions. Humanistic study, when followed by a liberalarts approach to microeconomics, enhances the individ-ual's ability to gain a value perspective upon businessactivity. Such a perspective enhances an executive'sability to infuse decisions with humanistic values.

The humanities may also make a significant contribu-tion to the performance of executive functions. Busi-

ness courses have a comparative advantage in teachingfuture executives to develop systems of evaluation,execution, and control. The humanities have an advan-tage in developing a predisposition for creative andintegrative thinking. These qualities of mind are morelikely to be instilled if the humanities are taughtfrom a humanistic rather than a technical perspective.

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Footnotes

I I am indebted to my late colleague, Professor Tony Gowan ofthe University of Kansas Department of English, for thisobservation.

2 Robert M. Hutchins, "The Administrator," The Journal ofHigher Education, XVII, No. 5, page 407. Parentheses added.

3 Robert E. Beck, "Career Patterns: The Liberal Arts Majorin Bell System Management," Liberal Learning and BusinessCareers, ed. Thomas B. Jones (Metropolitan State University,1982), pp. 52-53.

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