By Richard John Stapleton
(Editor’s Note: This fictional business case invented and written by me was first published in Managing Creatively: Action Learning in Action by University Press of America in 1976; it was reprinted in The Entrepreneur: Concepts and Cases on Creativity in Business by University Press of America in 1985; and it was reprinted again in Business Voyages: Mental Maps, Scripts, Schemata, and Tools for Discovering and Co-Constructing Your Own Business Worlds by Effective Learning Publications in 2008 and 2012.
(This case was prepared as a basis for group discussion, not to serve as an example of right or wrong business behavior.
(Feel free to forward, share, reprint, or otherwise disseminate this post any way you see fit.)
A secret conference was held in the secret Earth Sciences Skylab in 1974 for the purpose of studying business phenomena on Earth. The Carter Foundation for Higher Education funded the conference as a follow-up to the 1958 Gosden and Harper reports on the quality of business education.
The 1958 Gosden and Harper research was funded by the Carter Foundation to assess the quality of education provided by Schools of Business in United States colleges and universities. The 1958 reports criticized business schools for being too descriptive in nature, for not emphasizing scientific research methodologies, and for generally fostering a low level of academic achievement. The reports accused the business schools of merely reporting what business was doing and not developing new innovations for improving business.
During the 1960’s the study of business became heavily endowed with mathematical and behavioral concepts from the fields of mathematics and social science. Concepts and techniques from the fields of engineering and computer science were also applied to business phenomena and problems in business schools during the period. Many courses in business schools were taught by PhD’s in psychology, sociology, mathematics, and statistics and, in many instances, there were only small differences in teaching methodologies and contents of courses taught in Schools of Business and courses taught in Schools of Arts and Sciences. In some instances, actual business phenomena were completely left out of business courses. During the 1970’s many business scholars and businessmen began to wonder if business courses had not become overly theoretical and too neglectful of actual business phenomena. Many business courses had been structured using courses in mathematics or sociology or psychology or industrial engineering as models. The teaching/learning methodologies of laboratory sciences, such as botany and zoology, had not been generally used as models because of the difficulty of placing business phenomena under microscopes for observation. This difficulty was overcome, however, with the completion of the Skylab Observatory.
The Skylab Observatory
The Skylab observatory is a satellite that was secretly placed in orbit around Earth in 1971. Work on the observatory was completed in late 1972. The observatory is large enough to accommodate groups of up to twenty people for as long as two weeks. From the Skylab Observatory it is possible for groups of humans to observe humans, business and military practices, and general events on Earth in varying degrees of detail using a specially developed telescope, technically a macroscope, which has not only X-ray power, i.e., the capability to see through roofs of buildings and filing cabinets, but also the power to transmit and receive sound between the satellite and any human at any discrete point on Earth, via laser beams which travel along light waves from the macroscope to points of concern on Earth. The Skylab is available for research by various scientific and research groups from Earth for the purpose of improving the quality of life on Earth. The US government provided funding for the construction of the satellite. Operating expenses for the satellite are provided through revenues received from various groups that lease and use the satellite. The Carter Foundation provided funds for the secret business study in 1973 or 1974.
Professors, managers, accountants, salesmen, and promising business students were selected for the membership of the 1973 or 1974 business Skylab conference by a select panel. The members of the conference represented a cross section of cultural, regional, economic, sexual, and ethnic backgrounds.
Quarters on the Skylab were not spacious but were comfortable. The quality of food served by the Skylab food services staff was excellent, and the Skylab was well stocked with beverages of all types. Retro-rockets were attached to bags of garbage and waste for disposal. The rockets slowed the disgorged bags so that they re-entered Earth’s atmosphere and were incinerated.
Study sessions began at 8:00 a.m., US CST, and continued until noon. The sessions resumed at 1:00 p.m. and continued until 5:00 p.m. Cocktails were served at 6:00 p.m. and dinner was served at 8:00 p.m. The conference members usually chatted over drinks or coffee or read until 10:00 or 11:00 p.m. and retired shortly thereafter.
Structuring the Conference
There was considerable discussion regarding how the conference sessions should be structured. Some members argued that someone should take charge of the group and be responsible for pointing out relevant aspects or points. Others argued that since they were all adults, and most were professionals, that they should discuss aspects and points on a democratic basis with each member’s opinion being weighted equally. There was also considerable discussion as to what was relevant for study. The Skylab technological breakthrough made it possible for the group to study firsthand almost any business phenomenon on Earth. Since it was obviously not possible to study all phenomena on Earth during the two-week period of the conference, what should they select to study, of all the phenomena at their disposal? Naturally, the interests of the group varied according to past experience, ability, and skill; therefore, what should be selected depended upon who would do the selecting.
It was finally decided that the group would try to devote equal time to phenomena in the business functions of production, marketing, finance, control, transportation, and service. A number of organizations and humans in each of the functional areas were selected for observation. The process used was very unstructured.
The Skylab macroscope could be focused so as to observe the whole of a continent, a nation, a state, a county, or a human, or data, depending on the level of desired generality or specificity. Sounds, or dialogues, could also be tuned in or out at will. Needless to say, the scientific and technological principles upon which the Skylab macroscope were based were incomprehensible and, by and large, uninteresting to the conference members. They were only concerned with using the giant microscope, and, as they used it, they felt much the same awe, elation, and euphoria they felt when they got their first bicycle, or computer. The conference members came to refer to the microscope adjusting device as “the zoomer”, and would blurt out “zoom the zoomer in there a little closer,” and “zoom up the zoomer a little bit.”
Some of the professors in the group hoped to use the Skylab macroscope to, at long last, and once and for all, develop “a general theory of business” and make business a “science.” Observing business phenomena through the macroscope as botanists and zoologists observed biological specimens under microscopes on Earth, and classifying and categorizing phenomena by shape, size, type, function, etc. was one objective; the primary objective, however, at least in the minds of the least skeptical, was to develop a general principle which could explain, in advance, the outcomes of business specimens and phenomena.
Purpose of the Conference
No unanimous consensus was reached regarding the purpose of the conference, whether it was for the purpose of developing general theory, merely observing phenomena, developing technical skills, or developing insight or awareness. Each member seemed to have his own truth on this question. The group finally decided that only a few individuals should control the zoomer and select for the group appropriate phenomena and levels of generality or specificity.
It was decided that relatively small social groupings and levels of business activity would be observed because of the time factor. It was also decided, once phenomena were zoomed into focus, that each member of the group had the right to interpret the data according to his own lights and offer opinions, analyses, suggestions, prognoses, etc. to the group as he chose. Disagreement existed on this point. Many felt, since some of the group members were older and wiser than other members, the younger and less experienced members should ask for permission to talk up and that, for the most part, the younger members should listen to what the older and wiser members had to say. Some of the older and wiser members agreed with some of the younger members that the best way to learn is by taking action and suffering the consequences, and that, since independently talking in groups and trying to influence the group is a form of taking action, and since no drastic harm would result from errors, the younger members should have the same right to try to influence the group as the older members. Various members felt that the more correct views would ultimately dominate anyway, regardless of who initiated the view. Views that were badly off the beam, it was generally felt, if the discussions were open, full, and frank, would be shot down. So an open communication process was used, although some members did complain that the process was unprofessional and unfair.
Results of the Conference
In the process of living together and engaging in detailed discussions while viewing phenomena intensively and extensively, most of the members began to feel or sense changes taking place in the way they saw the world. Seeing different phenomena and hearing different opinions regarding phenomena changed their perceptions. A general discussion regarding the results and significance of the conference was conducted on the last day of the conference. Much of that discussion is presented below. The letters of the alphabet are used to identify various conference members, the majority of whom preferred to remain anonymous.
Professor J, an assistant professor of accounting from a private college in the Northwest:
I must say, I have enjoyed this conference. This Skylab is a real technological miracle. The food was great. And I must say I owe the select panel a real note of thanks for selecting me to be a member. However, I must say that I do not think the conference did much good. What have I learned? I think we should have spent more time going over specific points. We should have stuck to each point until everybody understood it before going on the next one. And you should use tests to prove that everyone understands your points before you move on.
Professor D, an associate professor of marketing from a state college in Northern California:
What? If we had taken the time to take tests, we couldn’t have seen half as many phenomena? And what points should we have been tested on? I can’t say that any of them stuck out enough to be important enough to take a test on.
Mr. R, the chief executive officer of a major corporation:
What do you think we ought to do in industry? Give our employees a test ever so often to see if they deserve a raise or a promotion?
No, but I know in accounting you can’t do it like that. I remember one time when I was teaching a course using a Harvard casebook in accounting. I finally threw the damn cases away, and then I taught them some accounting.
We’d be in a hell of a shape in industry if all our people knew was some accounting.
Dean C, from a School of Business in a small western university:
Gentlemen, please, this is not going to get us anywhere. We all know that accounting is a very valuable tool for use in business; we also know it takes more than that in business.
Just look at the starting salaries of accounting majors. Why we’ve had girls making $40,000 a year in two to three years after graduation. What are the marketing majors, management majors, and finance majors going to do when they get out? They’re not going to start out as managers. You’ve got to learn to do something specific. You’ve got to be willing to work.
Professor L, an associate professor of management from the Northeast:
Do all accounting majors start out with high salaries? What percentage of accounting majors actually stay in accounting after they graduate? It’s so boring and tedious many people get out of it. How creative is accounting? These are questions that concern me.
Mr. Z, a business student from Oregon:
My god, is the relevant question today, after we have been up here for two weeks, and after having been funded and given access to the most sophisticated learning equipment available, the relative rank of salary offers of different business majors? I think not. The relevant question is what have we learned!
The student’s comment somewhat set the group aback and a short silence ensued. Shortly, Professor W, one of the more distinguished and experienced of the professors, began to slowly and deliberately speak. As he spoke, his eyes seemed to turn inward, as if seeing phenomena inside his own head.
Gentlemen, I have been watching these phenomena down on Earth very carefully from the first day. I have not spoken up very much in the discussions. I have been listening and giving the rest of you a chance to get involved and express yourselves. I am now convinced, based on my observations and statistical tests, that I have a theory, a tentative, beginning theory, at the very least, which will put us on the sure road to the development of a science of business, which so many of us have so diligently and so fervently studied, researched and lobbied for so long. As we observed the business specimens down on Earth through this magnificent macroscope, I observed, and, I think, clearly observed, except for the smog over Los Angeles, the quintessential relationship.
Professor W then fell silent, and the group shuffled in their seats and whispered and smirked to one another. Professor W then continued in his slow, deliberate, ponderous tone, still seeming to be observing something inside his own head.
Gentlemen, I don’t know whether any of you noticed it, but what the business phenomena on Earth were doing . . . were organizing themselves in…in systems . . . for the purpose of surviving!
With that, Professor W opened his eyes and looked intently at various members of the group. Most of the group looked around. Finally, Professor T, an assistant professor recently graduated from a doctoral program from a university in the Midwest, spoke up.
What you are talking about, Professor W, is the systems concept. The system concept has been around for a long time, and it’s all well and good. But what good is it going to do a businessman to know humans organize themselves in systems for purposes of survival?
Mr. B. the owner of a chain of restaurants in the Midwest:
I don’t think it would do me a damn bit of good. Hell, it’s common sense anyway.
But it won’t be, Mr. B., if I can prove it statistically. I am convinced I can use multiple regression coupled with forty-degree-rotated analysis of variance in three-dimension space so as to establish, without question, a ninety-five percent confidence level. Also, I am sure my work will add to the existing store of knowledge and be supported by the prior work of Blatz, Johnson, Preen, Garber, Lammon, and Templeton. Not to mention the work of such pioneers as Halpert, McMellon, Constellona, and, of course, the original, Holmitz.
Mr. X, one of Professor W’s graduate students:
I am familiar with the work of Johnson, Preen, and Constellona, and I agree with you, Professor W. Your work will be a major contribution.
Who gives a damn? What I am interested in is something I can use to improve my profits, provide more benefits for my employees, and provide better service to my customers. You don’t have to tell me I want to survive. Using all those statistics may be okay to prove your points, but I can’t see what good it does.
Mr. D, a young engineer, rapidly moving up the ranks of a heavily technologized company in a heavily technologized industry:
I don’t use advanced statistics or mathematics in my work, although I do have a heavy math and stat background. To me, the value of advanced statistics and math lies in the fact it is rigorous and trains you to think logically.
Mr. R, the manager of a large wholesale hardware company in the Northeast:
I had some math and statistics in college, and I barely passed the courses. It was hard. I never use anything more mathematically sophisticated in my work now than simple tabulations of numbers. I add, subtract, multiply, and divide and that’s about it. Frankly, I think it was okay that I took math and stat in college, but I don’t think it is doing me any particular good now. I don’t think my mind became one bit more logical because of taking the courses. Furthermore, I am not even sure you need a logical mind to succeed in business. I think this is true of all managers, even college administrators.
Mr. X: the student:
Chester I. Barnard also said that.
Who on Earth, or in heaven’s name, is Chester I. Bernard?
You mean you never even heard of Chester I. Barnard! Why he wrote Functions of the Executive. And besides that he was president of the New Jersey Bell Telephone Company. He’s one of the most brilliant managers in history. I can’t believe you haven’t heard of Chester I. Barnard!!
Why should I have heard of him? The woods are full of brilliant managers. I think William T. Stevens, the President of the New Oakers Feed and Seed Company, is one of the most brilliant managers in history. Have you ever heard of William T. Stevens, Mr. X?
How could I have heard of some non-entity like William T. Stevens? Professor Graham never mentioned him in my history of management course. And I know he wasn’t mentioned because I take good notes, and I’ve got a photographic mind. I’ve got a 3.66 grade point average.
Gentlemen, we’re getting off the track again. Here it is the last day of our extra-terrestrial learning experience, and what do we talk about? Accounting salaries and who said what. It seems to me there must be something more than this that we have gained from our course here in outer space.
Professor P, a professor of finance from a state college in the Southwest.
It seems to me I have gained a great deal from the conference in terms of increased awareness and knowledge of business phenomena. By virtue of observing these phenomena through the macroscope, I believe I understand the business environment better and will be more comfortable in it when we get back down to Earth. I feel I got more out of the learning experience than I would have gotten out of it had we disconnected the zoomer and spent our time solely listening to, reading, and memorizing published literature or working algorithmic puzzles estranged from actual business phenomena.
All we did was look at stuff through that so-called zoomer and talk, and most of the time what was talked about was pure BS. You’ve got to make specific points. I always cover specific points in my classes. You learn generalities by studying specifics. You can’t just let anybody talk up whenever she wants to.
But don’t you think we studied specific phenomena through the macroscope? I don’t see how we could have been any more specific about what we saw.
It’s not the same. We have not developed any “generally accepted business principles,” like we have in accounting.
I wonder how generally accepted your accounting principles are. Seems I read about some CPA firm being sued here lately because of being unclear on what to do. If your principles are so generally accepted, why do these suits happen?
We’ve got an accounting standards board working on that. We’ve got five men we’ve paying over $50,000 a year each to, just to improve our standards.
Your standards must be in pretty bad shape if it is going to cost you that much to fix them up. For $10,000 I can hire a consulting firm to set standards throughout my whole chain, using time and motion study.
We’re not talking about the same kind of standards.
Professor Y, a full professor of financial management from a prestigious university in a large Midwestern city:
In my opinion, the behavior that is being exhibited here today is unprofessional. The real test of worthwhile knowledge is whether hypothesized generalizations can be tested and proved correct, through rigorous, deductive means. This is true in all science. In this sense, then, it would seem to be relatively straightforward that the proper course upon which we should proceed is first to identify the significant variables from the full range of variables which are manifest which must then be related, one to another, in such a way as to form a mechanism for reaching policies which are germane to the realities which confront us. To this end, and only to this end, I suggest that much more time and energy must be devoted to not only identifying the significant variables but also to isolating those points of connection and intersection which illuminate true cause-effect meaning for the discernment and application of the truly enlightened, professional mind.
Mr. L, Professor Y’s protégé, and one of the brightest graduate students at Professor Y’s university:
I agree with you, Professor Y. Not only have you just enunciated the shelf principle discovered by Howard but you have integrated it with the latest work of Means and Proctor. If you can now reconcile with your present synthesis the work of Lester, you will have extended the frontier. I am sure of it.
Haven’t you read any of Karl Popper’s work? I suggest you read Popper’s The Open Society and Its Enemies. I am convinced Popper is right when he says that the foundation of all science is the inductive method and not the deductive method. You observe phenomena in all fields and you establish generalizations based on your observations. According to Popper, and I agree with him, you cannot prove such generalizations to be true. All you can do is prove them to be false. If, after some period of trying to prove them false, you are unable to prove them false, then the generalizations are still not proved true. All they are are unfalsified generalizations. Most of what we have that commonly passes for general truth, scientific or otherwise, is not truth, but, in effect, unfalsified opinion, which hopefully was developed from observing concrete phenomena.
I can buy that. One good thing about this approach is that we did get to see real phenomena through the macroscope. Whatever opinions I now have regarding similar phenomena are, at least, based on observing concrete phenomena. It seems to me that is better than hearing about, or reading about, things second hand.
It seems to me what we may be saying is that we are choosing the lesser of evils. What we have accomplished with the Business Skylab is not necessarily the best, but it may have fewer drawbacks than other alternatives, e.g., math problems or literature absorption unapplied to actual business phenomena.
Now I don’t think you can say that! Mathematics is rigorous and their study challenges the logical and intellectual powers of the student. This has primary value, regardless of business phenomena. As for literature, what do you propose? That we re-discover the truths that are already in the literature every generation. That would be a tremendous waste of time.
But there is no truth in the literature, at least not absolute truth. What passes for truth should be continually challenged by the actual facts confronting various generations.
What do you mean by that?
I mean if we, students, simply accept what is recorded in the literature as truth we will not continue to grow.
What do you mean grow?
I mean become larger in all sorts of ways—skills, awarenesses, improved abilities to relate to others, more appreciation of beauty, more comprehension of large, complex, even philosophical problems. To grow requires an open mind.
Professor D, an associate professor of business education from Utah:
I’m not too competent in philosophy, but one thing seems plainly clear to me after looking at all those business specimens through the macroscope: there are precious few general business principles. Most of the specimens simply made up their particular principles as they went along. Assuming we did develop some scientific business principles, how could we force the specimens to use them?
The discussion continued in the above spirit for the rest of the day without any definite resolutions being agreed upon or adopted by the professionals and non-professionals present. All of the conference members, professionals and non-professionals, filled out teacher evaluation forms at the end of the day. The conference coordinator was very pleased that the conference was rated as a 4.7398 conference. The maximum score possible is 5.000 and the average is 3.4251. Thus the conference was highly successful.
The next day, most of the Business Skylab Conference members were happy to be boarding the space shuttle for the trip back down to Earth. On the other hand, two professors, one dean, one of the business people, and two of the graduate students regretted having to go back down to Earth so soon.
Some of the conference members felt uneasy back down on Earth from time to time when they looked up at the sky.
Richard John Stapleton, Editor & Publisher, Effective Learning Report, http://blog.effectivelearning.net/, 32 East Main Street, Statesboro, Georgia, October 27, 2017