In recent years, a trend has emerged among businesses in the U.S., Europe, and Asia that prioritize creating value for others as a primary objective. This philosophy is a departure from the traditional idea of scientific management, which focused on establishing rigid systems and processes to generate profit. This method, popularized by Frederick Taylor’s book, “The Principles of Scientific Management,” dominated the business landscape for over a century.
By the mid-20th century, the Carnegie Foundation began promoting scientific management in business schools. Later on, in the 1970s, Nobel laureate economist Milton Friedman and his peers persuaded companies to adopt maximizing shareholder value as the sole business goal. This approach was endorsed by the Business Round Table in 1997, and in 2023, a well-known management expert defined management as the tools, methods, and structures used by humans to collectively achieve what they could not do individually.
While this management philosophy led to significant gains in the 20th century, it also resulted in decreased staff engagement and declining business returns. Recognizing the unsustainable nature of a business model solely focused on short-term profits, the Business Round Table officially abandoned this approach in 2019.
Over the past 25 years, companies have begun to pivot away