US-MBA

Master of Business Administration

Cohort 10
2020/2021

Management and Organizational Behavior

MBAD-651CR

Assignment title:

The Real Costs of Bad Management

by Mark Allen, Ph.D.
(Article Critique)

Student‘s name: Samuel Polakovič

Date: 16th November 2020
Module leader: Dr. Richard Vaughan
INTRODUCTION

I have many sources from which I receive daily notifications of interesting articles or
podcasts. Lately, I have especially liked podcasts, as they allow me to read with my
ears, i. e., a combination of relaxation and education. I discovered Mark Allen's article
by accident. And like many others, I put it in the Pocket app for later. After the initial
lesson MOB I recalled it and decided to use it for this assignment.
Nowadays, the word "cost" in close connection with terms like "spending, reducing,
saving or efficiency" is highly exposed in the daily language of entrepreneurs, business
managers and their advisors. Globalization and technology make goods and services
accessible from almost anywhere on Earth. This fact creates enormous pressure on
pricing on local markets so far. The only way for local companies is to rationalize costs
as much as possible while maintaining the required level of quality and innovation.
However, this process requires continuous control and management of resources,
support and motivation of employees and co-workers. Stakeholders need experienced
and competent managers for this purpose. However, this is not always the case, and
this usually harms the entire organization. Do owners and top managers pay enough
attention to the selection of executive managers? How much influence does such a
choice have on the internal culture and performance of the organization?
Considering that I was very interested in Mr. Allen's article, I also tried to find another
relevant source of information that could either support or revise his views in the article.
It did not take me long to discover the findings of Decision Wise's research, which are
fundamentally supportive of the article. Therefore, I allowed myself to insert their
infographics into particular parts of the article.

ABOUT THE AUTHOR

Mark Allen, PhD, is a practitioner lecturer of Organizational
Theory and Management at Faculty of Management and
Organizations at Pepperdine Graziadio Business School (LA,
USA) and Academic Director of the Master of Science in Human
Resources program. He is the author of The Corporate
University Handbook (2002), The Next Generation of Corporate
Universities (2007), and Aha Moments in Talent Management
(2014).
In 2017, Allen was named one of the Top 100 Influencers in
Human Resources. As an internationally recognized authority,
he is a popular speaker. He has presented his research in
numerous countries including China, France, Italy, Mexico,
Barbados, Turkey, Colombia, Saudi Arabia, Australia, India,
and throughout the United States and Canada.

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STRUCTURE OF THE ARTICLE

At the beginning ….
 the author states that "People don't leave organizations, they leave managers",
 continues with the question "Why is it so common to have bad managers?", as
almost 100% of the audience usually confirms this fact,
 he gives an example where hospital staff knowingly suffer from bad managers.
However, they are not willing to suffer bad surgeons,
 then arouses the reader's interest by stating that a lousy surgeon can still cause
death, but a bad manager? Yes, even poor management can result in death …,

(Source : DecisionWise)

In the next part ….

 as one of the main reasons why most organizations have poor managers cites the
usual procedure where the most valuable contributors are promoted to the position
of manager, even if they do not have the necessary abilities,
 this attitude will cause damage to the organization even twice ....... we get a bad
manager and we lose the valuable contributor .....,
 despite this finding, these managers are subsequently maintained there ..... few
still want to admit a mistake and few contributors are ready to refuse promotion
(and the benefits associated with it) ...,
 the author states that HR consultants also play a negative role in this matter,
motivated by the fulfilment of the client's request to create the aura of a perfect
candidate,

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In the third part …
 then he deals in more detail with the consequences of such a conscious
(non)action,
 common "phrase" of management is that people are the most valuable asset of an
organization ... so why do we let bad managers gamble with this precious asset if
bad managers are the most common reason why people leave the organization?
 such (non)action causes organizations, surprisingly, real costs ... usually 1.5 times
the employee's annual salary and decline of productivity,

(Source : DecisionWise)

 he wonders why it is common to fire managers who are wasting financial

resources, but if they are wasting our human resources, can they continue to do
so?
 another consequence of bad management is the gradual loss of employee
engagement. Engaged employees are usually more productive and stable ........
The manager's negative influence on the work environment and relationships
causes the disruption of ties between people .... .. the absence of the informal
relations people tend to leave bad managers ....bad managers leading to low
engagement, low engagement leads to a decrease in productivity and increase in
fluctuation ..... and again we are at a cost!
 if we do not consider reduced productivity and higher workforce turnover as a
sufficient reason, the author offers to consider the effect of increased stress and
related health problems or even .... death!
 argument proves the conclusion from an analytical article BBC, which confirms that
according to the Mayo Clinic workplace stress leads to 120 thousand annual
deaths ....,
 concludes that tolerating the bad managers is routine for organizations and to
some extent, it is a necessary cost of doing business. Would they consider it
acceptable, even if they knew the real costs of bad management - lost productivity,
higher employee turnover and employees health problems. ...?

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 HR professionals ranked "Increased Performance and Retention "as the most important benefits of
employee engagement :

(Source : DecisionWise : Benefits of employee engagement)

In the fourth part …

 the author asks, so what can we do about this problem, which can already be
considered an epidemic?
 it is crucial to convince the top management that we have bad managers and that
this causes real costs for the organization,
 to apply the same requirements when choosing a manager as for other professions
- require education, experience, talents, talent ....... for achieving results and
managing people,
 he gives us as an example the results of Google's Oxygen research project, which
results in a list of eight core competencies of good managers (see below),

(Source: reWork)

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In the final part ….

 the author emphasizes aspiration as another important criterion for the selection of
managers,
 he recommends avoiding the habitual promotion of the best contributors to the
managerial position without their aspiration to lead and motivate people,
 with this approach, we actually ask them to pay less attention to what they do best
and what they are most beneficial to the organization,
 let us replace this approach with another way of (financially) motivating these
people without having to take on a role that they do not care about or have no
ability for,
 in conclusion, the author believes that a number of bad managers are a source of
dysfunction in organizations that cost them productivity and drive away talent .....
but at the same time it is also our great area of opportunity!
 the open question for the future is not whether we have bad managers in the
organization, but what we are going to do about it!

(Source : DecisionWise)

MY THOUGHTS AND OPINION

The article offered us an interesting perspective on the field of organizational relations.

Almost each of us probably has a personal experience of working in an inconvenient
work environment, without the necessary support, motivating and inspiring leadership
from our managers. After more than 20 years of my work experience, my view of the
past is also more critical.
Seeing that I belong to a generation that was already involved in a fundamental
change of establishment, we attributed to some extent the managerial mistakes and
shortcomings of managers throughout the following period, mainly the lack of

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experience and learning on the fly from their own mistakes. Over time, strong
personalities began to profile in our area and became recognized and respected
managers not only due to innate assumptions but mainly due to their willingness to
learn and their ability to obtain information and network with leaders from developed
economic environments.
The inflow of foreign capital into our economy created the need to fill managerial
positions, whose task was to manage the work teams and activities of various foreign
companies in our market, respectively, in the markets of Central and Eastern Europe.
These, until then regional or country managers, often seized their opportunities and,
thanks to their energy, hard work and talent, we are able to grow their careers and
apply themselves within the international holding structures of global companies.
Admission to the European Union (2004) and the changeover to the Euro (2009)
opened up opportunities for students, workers and entrepreneurs and simplify their
access to quality education, interesting work environments and business opportunities
within Europe. After their return to the country, there was a mutual interaction and
application of theoretical knowledge, acquired skills and practical experience within
domestic organizations.
Today, of course, it does not stand up an argument about limited opportunities for
those whose aspiration is to penetrate and apply the governance structures of
organizations. However, aspiration alone cannot replace other assumptions. It is
essential, but not the only and most important prerequisite for management work.
Complains HR agencies that often bring to the company of experienced managers
only according to the length of their CV.
Many aspirants were given the opportunity to participate in the management and
subsequently reconsidered their interest. There is no shame or failure if a person
decides to take up the challenge and then, in the light of experience, decides to direct
their interest and energy in another direction. An experienced leader will even be
happy to give members of his team such an opportunity to make such a person a
valuable contributor to the organization in another area and motivate him differently.

As the author stated in the article, the engagement of an employee brings better
relations in the organization, less employee turnover and higher productivity. A good
leader does not take such a relationship quality for granted. This internal "goodwill" is

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unfortunately not usually appear in the financial statements or in the annual report of
the organization. On the contrary, in the case described by the author of the article,
the real consequences of bad management are now quite accurately quantifiable ...
sooner or later, its effects will be reflected not only in the deteriorating culture but also
in the monitored economic indicators.
I have been an internal observer of such a development during my last tenure in a
public corporation run by local government representatives. Despite its almost
monopoly position on the market, the management was unable to manage the
company in such a way that the set goals were achieved. This lack of ability was not
addressed by changing management, but by adjusting targets so that KPIs were met
and bonuses could be paid out. Shareholders and employees over time to accept that
the management of the organization will not change based on the results achieved,
but by electoral cycles. Thanks to this fact, the company is now managed by crisis
management. Finally, for me, lesson learned.
DecisionWise research shows us that managers influence employee engagement for
the better when they improve certain behaviors. So what can we do? Are we ready to
invest in our managers, increase employee retention, and decrease our employee
turnover costs? It is, unfortunately, just a rhetorical question. And there is only one
correct answer: yes. Therefore I tend to agree with the author of the article. Nobody
will do it instead of us.

REFERENCES

 Allen, M. (2019) : The Real Costs of Bad Management – And What You Can Do
About It, Graziadio Business Review (Vol.22, Issue 1)
https://gbr.pepperdine.edu/2019/03/the-real-costs-of-bad-management-and-what-you-can-do-about-it/

 DecisionWise (2018) : State of Employee Engagement Report

https://decision-wise.com/cost-of-a-bad-manager/
https://decision-wise.com/state-employee-engagement-report/

Infographic "The Cost of Bad Manager" data sources :

1. A DecisionWise study was conducted with 1039 employees from six different companies (2018)
2. The Bureau of Labor Statistics (https://www.bls.gov/jlt/)
3. The Center for American Progress (https://www.americanprogress.org/wp-
content/uploads/2012/11/- CostofTurnover.pdf)
4. The Balance Careers (https://www.thebalancecareers.com/average-salary-information-for-us-
workers-2060808)
5. Forbes (https://www.forbes.com/sites /jeffboss/2018/02/26/emploee-turnover-is-the-highest-its-
been-in-10-years-heres-what-todo-about-it/#1ec7fd27478c
6. Based on results from 180 companies. "2018 State of Engagement Report" (https://decision-
wise.com/state-employee-engagement-report/)

 re:Work (2017): Google's research is making managers awesome

https://rework.withgoogle.com/blog/watch-googles-research-on-awesome-managers/