When Opportunities Dry Up-Income Inequality in America

Income inequality is a hot topic that is becoming more troublesome every year as the gap in incomes continues to grow. Fed Chair Janet Yellen discussed on October 17th the growing problem of income inequality and its potential impact on the American Dream. She elaborated on how child resources, higher education, entrepreneurship, and inheritance influence a family’s ability to raise their position in life. Without ensuring that there is sufficient mobility within society there are risks to the founding fabric of opportunity within the country.

Those who are not wealthy are finding it difficult to save money or pass that money onto future generations. At the same time, those at the top of society are discovering that it is not only easier to earn more money but also save that money for their children. Additional time without change seems to aggravate the problem.

Janet Yellen discusses four possible solutions that include early education intervention, affordable higher education, business ownership, and inheritance income.  Each of these points has some influence on whether someone will be successful beyond the natural variations in human skill and abilities. They provide some formation of doable change but are not a complete solution in and of themselves. 

When society invests in children they can give them better opportunities to learn, obtain quality education, and then apply those skills to the market to earn higher wages. Owning a business is seen as another way of generating wealth outside the restricted compensation structures of larger corporations. Helping families invest and pass on their savings to the next generation is helpful for improving positions over time. 

Pure wealth distribution whereby money is taxed or donated by major corporations or wealthy individuals will not help society grow in the long run.  Contrary to popular opinion, it may actually do the opposite by lowering the need to achieve and succeed based upon one’s individual efforts and merits. It can damage empowerment and societal development of skill and ability which is needed to compete as a nation. 

Fundamental change runs deeper than simply improving skills and ability in isolation and delves into the nature of how opportunity is created and rewarded in society. By focusing on rewarding core competencies and skills the effects of income inequality can be lessened (Cobb & Stevens, 2014). Where individuals have made effort to learn new skills there should be corresponding increases in income. 

Income inequality causes the lowering of incentives for citizens who desire to engage the economic system fully. Where cynicism grows also grows perceptions that effort doesn’t equal reward. When lower income classes of the nation experience lost opportunity their empowerment declines as success is something outside of their control. A sense of fatalism takes over.

As income inequality grows social instability rises as a larger demographic of the nation feels that their needs are not considered, government doesn’t adequately represent them, and success is something they will never obtain. A study of 33 democracies worldwide found that income inequality and regime stability were inversely related (Muller, 1988). Income inequality raises the natural conflicts over resources while the system itself becomes less stable as these classes rub against each other.

The rising influence of the U.S. as a powerhouse of manufacturing, innovation, and technology offers opportunities to re-balance the ship for smoother sailing ahead.  Encouraging Americans to become more skilled and educated is helpful in developing home grown talent that keeps jobs within the country. Wages should keep pace with improvements in abilities to ensure that the nation retains its position as a nation of opportunity for the vast majority of people. Income inequality is one sign that changes in how we govern and the very nature of politics and commerce must adjust to ensure the continuance of egalitarian principles the country was founded upon.

http://www.federalreserve.gov/newsevents/speech/yellen20141017a.htm

Cobb, A. & Flannery, S. (2014). Those unequal states: corporate organization and income inequality within the U.S. Academy of Management and Annual Meeting Proceedings, p381-389. DOI: 10.5465

Muler, E. (2014). Democracy, economic development, and inequality. Democracy, economic development, and income inequality. American Sociological Review, 53. 

Using Career Oriented Academic Knowledge to Raise Military Functionality

The nature of the military is changing and so are the training needs. Dr. Rutherford moves into a discussion of the needs of training in the Australian Army and the specific training at the Royal Military College (2013). His article focuses on the enhancement of specific career skills to support the command and control functions. The complexity of military operations requires the development of different types of talents that may not fit exclusively into command and control learning style. 

Modern warfare is different than it was in the past. It requires higher technology, logistical systems, abstract thinking and greater functionality. Command and control functions are based in the learning of skill of the position above and below in combat functions. This focus in the military is necessary but also may be forcing those with the relevant skills out of the military and thereby decreasing knowledge retention. 

Combat is the main function but the ability to maintain combat is based in more administrative and career knowledge skills. If the equipment, technology, and support functions are not there the military would be less capable. Many of these functions are contracted out due to a lack of specific knowledge within units and the military in general. 

Individuals in the military are generally trained in broad skills related to their rank but are not trained to excel in their functions. Their training is focused on specific tasks and often do not develop the higher order understanding needed to influence how the system works, where to improve the system, or how to operate it independently. 

As the nature of the military and complexity of combat increases more pressure is being placed on headquarters based on the home soil. The information, skills, and functionality can depend on decisions being made hundreds of miles away from the actual events. Training military personal on their careers as a widening of responsibilities will help the military find additional effectiveness and efficiency. 

It will also help the military retain top talent that age beyond the traditional combat functions. Their knowledge and skills of the military can be added to their academic problem-solving skills to create greater support to combat operations. Talent is retained and operational performance is improved across a wide array of functional areas. 

The author discusses the continued importation of civilian processes and the loss of internal talent due to the nature of command and control training. Training military personnel in careers beyond their rank will help retain and maintain top talent while increasing the functionality of the military units. Moving beyond simple transactional learning to career oriented skill sets will improve upon functionality and knowledge and thereby improving the learning-organizational aspects of the military. It will also allow the military to adjust these civilian processes to pin point their resources to their actual needs.

 Rutherford, P. (2013). Training in the arm: meeting the needs of a changing culture. Training & Development, 40 (6).

Leading and Learning as a Cure for Pathological Management Styles

Learning organizations are likely to be more successful in developing new methods to compete on the market. Research by Michie & Zumitzavan (2012) furthers the argument that those organizations that foster learning and are managed by learning leaders are more successful than those who are reactive and focused on pathological styles. Learning leadership is progressive, open-minded, humanistic, and goal orientated that results in higher firm development and profits.  

Leadership and learning are two components that come together to foster development. The way in which leaders learn has an impact on how they act as administrators. Those that engaged in all four learning styles action, thinking, feeling and assessing others are more capability of using multiple leadership styles such as challenging, inspiring, enabling, modeling, and encouraging (Brown and Posner, 2001). 

Learning is one way in which organizations can continually renew themselves versus accepting the fate of a rigid decline. According to (Johnson and Scholes, 2002), organizations that are willing to continue learning throughout their lifecycles become more sustainable in the sense that they can adjust to new market trends, structures, and realities. If such organizations are not willing to learn and change they will be eventually crushed under new market realities by more competitive and nimble organizations. 

Leaders have the ability to prime the behavior of their followers. When leaders have a healthy respect for learning they can influence the expectations and behaviors of managers who further impact the social structure of employees. Creating a culture that respects and fosters learning, helps to enhance both the employees’ abilities, as well as the ability of the organization to adapt to market changes. 

The researchers Michie & Zumitzavan (2012), attempted to see how the attributes of managers impacted the learning and leading styles that influence organizational success. Twenty North Taiwanese firms were selected for the overall interviews and questionnaires.  They found that there was no relationship between learning styles and the demographics of the organization or location. In other words, learning leadership is not tied to organizational demographics. The impact of organizational learning styles was influenced by the leadership styles within the organization. 

Effective Organizations: Managers within effective organizations believed that technology and cost reduction were two important factors. However, they agreed that by developing employees skills their organizations could be enhanced. Thus, they sent people to seminars, workshops, training, educational outlets, etc… to improve their skills. They welcomed open opinions, managed workplace problems progressively, delegated for employee enhancement, and continued to forecast the needs of their organizations into the future. 

Less Effective Organizations: Less effective organizations are marked by their short-sighted thinking that focused on day-to-day issues. They were less able to forecast the future of the organization or able to solidify the goals of the organization. They rarely sent people for enhancement training or education and did not do well in managing employee problems. Furthermore, they were not willing to delegate authority and did not encourage employee opinions. 

The research results indicate that short-sighted behaviors, whereby individuals are not learning, are more prone to poor performance. With such results it is important to understand how training and development has an enhanced place in the most successful organizations.  Such training doesn’t need to be formal but does need to encourage constant learning and development to be effective. The learning style of the leaders and their level of expectation setting appear to foster organizational learning. 

Micromanaging leads to poor results and creates a systematic structure that damages the organizations ability to effectively compete on the market. Some have argued that micromanaging is a pathological behavior rooted in the manager’s childhood experiences, perceptions of incompetence, and their inability to think beyond their most immediate needs. Such managers foster fiefdoms in the workplace, manage by fear, and often take credit for others work. Many times their policies, procedures, and departmental approaches are based in the need for self-validation. For investors and executives who desire to see their organization succeed, they should take considerable care in fostering learning within their organizations and limit the advancement of those with the least capacity to lead. New ideas bring opportunities for organizational advancement. Where profits are low, adaptation slow, and employee development under toe….you may just have an abundance of pathological management styles.

Brown, M. and Posner, Z., (2001). Exploring the relationship between learning and leadership.

Leadership and organizational development journal,  22 (5–6), 274–280.

Johnson, G. and Scholes, K.,(2002). Exploring corporate strategy. Essex: Pearson Education.

Michie, J. & Zumitzavan, F. (2012). The impact of learning and leadership management styles on organizational outcomes: a study of Tyre Firms in Thailand. Asia Pacific Business Review, 18 (4).

Book Review: Performance Improvement Pathfinders

Performance Improvement Pathfinders: Models for Organizational Learning Systems offers an excellent overview of models for organizational intellectual development.  A number of industry experts and doctors have come together to create this fundamental book that every aspiring manager should read.  Topics include the importance of performance improvement, human performance models, language, and performance management. Managers and business leaders will find important information in this work as they seek to raise the performance and profit margins of their organizations. 

Readers will be brought through important concepts such as the early work of B.F. Skinner and Susan Markle, the concept of behavioral engineering, five principles of employee performance, management revolution, performance improvement models, environmental factors, assessment, language and workplace interventions. As you can tell from the general concepts covered the book provides a strong overview of basic organizational development theories every manager should have a grasp of before trying to encourage employees to higher levels of performance. 

For example, you may be interested in the concept of behavioral engineering and how it works within organizations. Behavioral engineering can be seen as the search for problems that reduce the ability of humans to use technology within the workplace and redesigning processes that keep human limitations in mind. Dr. Thomas Gilbert developed one of the first behavioral engineering models in the 1960’s that included influences on performance such as information, resources, incentives, knowledge, capacity, and motives. 

The book also discusses the importance of language in building and defining strong workplaces. Dr. Danny Langdon developed a methodology for understanding common language at work. He defined these key elements as defined words, syntax, message and medium. The very premise of all culture is the subtle meanings and definitions embedded in organizational language. Without this commonality it is difficult to develop strong cultures. 

The book is well written using common language that most managers can understand. It is an excellent book for seeing how multiple theoretical works associate together in a way where they are most beneficial and practical.  An updated version would be great for courses as it not only provides the theories that make up organizational development but also examples of how they are applied. It has plenty of resources for those who desire to seek out additional information.  It maintains its relevance.

Dean, P. & Ripley, D. (1997). Performance Improvement Pathfinders: Models for Organizational Learning Systems. DC; International Society for Performance Improvement ISBN:  0-9616690-9-8

Pages:  279

Cost: $90 New & $12 Used