Management revolution. Its consequences

Today it is difficult to believe that the economic system was not always based on capitalist principles, for even in the era of the Soviet Union, its economic features were traced to certain features. For example, the so-called "managers" exercising control over the work of state-owned enterprises can very well be compared with the top managers who now manage the corporations. It promoted the formation of top managers as a special class of society just the administrative revolution that occurred during the era of great industrial discoveries.

However, it should be noted that when the term "managerial revolution" is mentioned, one should keep in mind not only those events that marked the appearance of top managers, but also a number of other events that influenced the formation of modern management. In fact, these latter events are more correctly called the fifth administrative revolution, although to simplify terminology, sometimes the word "fifth" is omitted.

Let's take a short digression into history and see how the formation of the management class took place, and what management revolutions existed in management. As a result of the first revolution, written language first appeared, which means that economic operations began to be documented, which allowed them to be analyzed and recorded. The second revolution, which also occurs in the distant days of our era, gave birth to the first set of laws regulating commercial relations, giving them a systemic character, and thus simplifying the decision-making process.

The third revolution strengthened the role of the state in governance. As a result, there appeared institutes engaged in planning and management, and this can be considered a breakthrough of mankind on the way to building a unified economic system. After that, nothing changed for a long time, and the fourth revolution came to us together with the end of the Middle Ages and the flowering of capitalism. As a result, the entrepreneurial class blossomed, which became the core of the economy, as well as the source of all its achievements and problems. In those days, entrepreneurs independently made managerial decisions.

However, as economists of the time, such as Smith, predicted, could not continue like this for a long time, therefore, the fifth administrative revolution became rather a evolutionary development of the already established economic system rather than a revolution. As a result, it was formed, as already mentioned, a class of professional managers.

Thanks to this, entrepreneurs were able to relieve themselves of the management responsibilities of the enterprise, ceasing to play a significant role in its development. Thus, capitalism passed to that phase when the role of the owner ceased to have a weighty significance in economic processes. To date, if the owners are completely excluded from the economic system while retaining other sources of financing, the economic model will not suffer in any way.

Certain progress in this direction is already taking place. Today, financial institutions play a leading role in management, since the fate of the company and the direction of its development largely depend on their decision, while the company acquires the form of a self-governing structure. If previously the income of the owner was a priority, then today is the company's profit, regardless of how it is distributed.

Thus, the fifth administrative revolution significantly changed the world, despite the fact that the formal economic system has not changed, it is still about capitalism, in fact, its essence has been subjected to major changes.