HL Deb 18 November 1964 vol 261 cc581-656

3.14 p.m.

LORD ALPORT rose to call attention to the need for greater provision for management education and business studies in Great Britain; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. In view of the wealth of experience in the fields of both education and industry which the membership of your Lordships' House comprehends, I believe that the subject of my Motion is an appropriate one for debate in this Chamber and that, in view of recent developments, this is an appropriate time for such a debate to take place.

I must say, to start off with, that my own interest in the subject of management education and business studies originates from the period immediately after the last war when, like so many others, I had recently returned to civilian life and was considering what factors were most likely to contribute to the revival and modernisation of Britain and what forces were likely to bring about the great changes needed in the social organisation and distribution of responsibility within our national life. Your Lordships will recollect that there was at that time a good deal of talk about "the managerial revolution", which was the title of a book by an American author, James Burnham. But, without accepting the somewhat turgid analysis which that author produced, I think it is true that his theme, at that time, made a pretty profound impact upon many people interested in public affairs. At any rate, it was quite clear that over the previous twenty years, and longer, power to control an ever-widening field of productive enterprise and social organisation had been passing into the hands of a new profession of managers.

This, combined with the great advance in technology, made it obvious that there was a rapidly growing need for specialised training for those who were to shoulder these new and important responsibilities. Just as we have come belatedly to realise that it is not sufficient for a craftsman to learn his trade by the old haphazard system of apprenticeship, so it is not sufficient to leave the manager to learn his job within the narrow field of experience provided by a career in one particular firm, as he climbs painfully the successive rungs of the managerial ladder. It is also absolutely true that nothing can replace practical experience; but practical experience alone in this respect is not enough.

If this view is acceptable to the House, two things appear to me to follow: first, that management training is needed at all levels of management and by managers in all sizes of firms. It is not a requirement for only the young entrant into the managerial ranks; nor is it a luxury which can be afforded by only large and affluent companies with big staffs and great resources. Secondly, effective management training is essential if the British economy is to be modernised and made competitive in a hard-faced, technological age. It is vital that we should make the best use of human resources and ensure that our industry is provided with inspired leadership and technical know-how. Sir Halford Reddish said recently that all we had to export was our brains and brawn, and that this was precisely the sphere in which there was most wastage. I think that is true, and that we cannot afford to allow it to continue if we are ever to get off the economic knife edge upon which we have been so painfully balanced for so long.

There is one more consideration. For over a century our educational system has been geared to provide an inexhaustible supply of overseas administrators or managers in a real sense of the term. There will be little demand for them in the future. What we must now do is to ensure that all that talent, efficiency and dedicated service is harnessed to provide the leadership and drive for our national effort to enable Britain to earn its way in the world and, at the same time, to acquire the resources which alone can give it status and power, for without that, the people of this country will not be content to live.

It is true, of course, that during the last fifteen or twenty years considerable progress has been made in this country in the provision of facilities for management education and business studies, both at our universities and at technical colleges. Forty-seven technical colleges provide courses for a diploma in management studies and industrial administration, and there are several thousand students who are engaged in these studies at the present time. Most universities provide an opportunity for study and research in management, and many of the larger firms have their own systems of management education. There are, in addition, special institutions like Ashridge, and the Administrative Staff College.

All this sounds most impressive, particularly as most of this development has taken place during the last ten or even five years. It proves that both industry and the institutions of higher education in Britain are fully aware of the importance of management training. This has been further demonstrated by the establishment in 1961 of the Advisory Committee for Education in Management under the vigorous chairmanship of Mr. Platt; by the publication of Lord Franks's Report in 1963, which advised on the starting of two business schools, and the immense success which has attended Lord Nelson of Staffora's appeal this year for £3 million from British business to finance the establishment of these schools in London and Manchester, for making provision for the expansion of existing projects at nine universities and colleges of advanced technology, and for creating a development fund for future expansion. There has been, of course, in addition to this, the work of the Foundation for Management Education and the British Institute of Management.

That is the asset side of the balance sheet, so to speak; now let us look at the liabilities. In the first place, it has been obvious for twenty years or more that British industry required institutions which would provide the equivalent facilities of the Harvard Business School and the Massachusetts Institute of Technology. Only now are the first steps towards the establishment of two business schools being taken, although it would be unfair to undervalue the work which has been achieved by the existing colleges of advanced technology. Secondly, there is no real meeting of minds between the policy-makers in industry and those in higher education as to the proper educational pattern for management. There is growing frustration in academic circles, because they find that existing courses are not being fully used and that students of the right type are not being sent by industry to them. On the other side, there is criticism of the universities and colleges for not providing the type of courses which fit the aptitudes and needs of the students whom industry wishes to send to them and who tend to be drawn from the more junior ranks of management.

This uncertainty and lack of mutual confidence between education and industry has meant, I think, that too much effort has been devoted to teaching the wrong things to too many of the wrong people. The result is that many managements have come to regard this form of education as being of only marginal value in the successful operation of their companies, while academic staffs have been tempted to fashion their courses to fulfil the inevitable demand of industry for quick results and to meet parochial specialist needs.


My Lords, would the noble Lord allow me to interrupt him? I am following his speech with great interest and I wonder whether he could amplify what he is saying. What particular areas of training and what institutions are feeling frustrated at the moment; and why?


My Lords, I do not want to particularise, for obvious reasons, which will be clear to your Lordships, but I think that this is borne out largely in one paragraph in the Franks Report, to which I would refer the Minister. But I think that the result of this is that for the individual there has been no certainty that the training available to him will be such as will make him a better executive or that his abilities are such that he will be able to take full advantage of the training which he receives. Finally, there is no clear and accepted role for the Government in relation to the development and co-ordination of management education in Britain generally.

I hope that this summary of assets and liabilities will not be regarded as unfair or inaccurate. I have no wish, and certainly no right, to belittle or criticise, and my aim is merely to place before your Lordships the position as it appears to be. The task is to turn our liabilities into assets and this is, I think, exactly the right moment to do so. We have the assurance of the present Reith Lecturer that automation and the development of the computer will not deprive the human manager of the responsibility for exercising judgment. Indeed, business management decisions will be helped, although probably greatly complicated, by the development of highly sophisticated analytical processes of various sorts. As a result of these developments, the powers of the human mind are being, and will continue to be, greately strengthened in making decisions wisely and appropriately in face of the problems presented to them. In addition, automation in industry will require entirely new techniques of management and administration, and the rapid developments in the field of engineering, electronics, physics and all forms of science will require management to accept disciplines and continuous refreshment of their ideas and managerial attitudes so that these developments may be quickly applied to industry and reconciled with the human and social factors which they affect.

I am not saying that all these problems can be solved by training, only that without training their solution becomes immensely more difficulty. I am also certain that, unless there is a sufficient and continuous process of research into these problems, their solution will be unnecessarily costly in terms of time, resources and human and social contentment. I realise that, as the Principal of the Administrative Staff College said recently in a letter to the Financial Times: We must first of all go through a period of experimentation so that we understand better what we really need. I do not, however, accept his further contention that in the long run, it would be better to delay the national plan… for management education. I believe that we need that design now, and I believe that it is possible to provide it now. The late Lord Keynes once said that everything would no doubt come right in the long run—but in the long run we should all be dead. I must say that it seems to me that we need in this matter a flash of divine impatience. We know that we can and should be prepared to import the best practice from the United States and from the Continent, and instead of doggedly insisting on using our own resources we could more and more use their ideas as a springboard for our own. In this field we can buy experience and know-how where we need it, and I do not think that we should be too proud to do so.

What then might be the outline of such a plan? I put my suggestions to the House with great diffidence, for I realise that I am treading on very controversial ground. But I suggest that for anyone destined to reach the ranks of top management, there are three main periods in his career of 40 years in industry when management training would be of value to him. The first two of these are, I think, generally accepted. The first is the post-graduate period, when a young man in his middle 'twenties and after he has gained his first degree or professional qualification requires a general course in business which will familiarise him with basic skills and techniques of industry and commerce. Unless he has had this training at university or other college he must learn all this as an apprentice manager, probably doing dull routine work which quickly takes the edge off his enthusiasm and wastes unnecessarily his and his company's time. This post-graduate training would occupy an academic year and be carried out at a university or college of advanced technology.

The second period, I suggest, is after he has had about five or ten years' practical experience and is ripe for a second course of training intended either to give him a better understanding of the varied organisational problems of management in his firm and in his industry or, alternatively, to fit him for a specialised post in middle management which requires detailed knowledge of marketing, personnel management, production or similar subjects. I assume that such a course would last for anything between four weeks and five months. I would think that any manager destined for a responsible post in middle management would take a course of this type. I assume that the provision of these courses would be the responsibility of the various institutions of higher education, linked closely to industry. This second period of training having taken place, the man would normally be regarded as eligible to take a post in middle management in the firm in which he served.

In addition to all this, there would, of course, be a demand for various short courses to meet special needs. But there is, I suggest, a third period and it seems to me important. This is the period of withdrawal from responsibility or the "sabbatical period", if I may call it that, which would come between the ages of 43 and 50, when a man who has definitely got his feet on the rung is selected for a post in top management. He should be given a chance of recharging the batteries of his personality at this point of time, when the wear and tear of his private and public responsibilities tends to make the maximum inroads on his judgment and vitality. To be withdrawn from what I would describe as "the rat race down the corridors of power" (to counterfeit the phrase of the noble Lord who is to speak after me), particularly if in any particular case he is winning that race, seems to me to be an excellent antidote to that prime corrupter of judgment, the arrogance of success. To allow a brief respite devoted to a course covering both practical and intellectual subjects—indeed, all those subjects designed to give him a wider horizon and strong intellectual stimulus—I am quite certain would be of great value to him and to his company during the ten or fifteen years which lie ahead of him when he will bear the responsibilities of direction of top management.

We are frequently told that industry cannot afford to release men for post-experience training, let alone for such advanced training. Frankly, I do not believe this is true. Industry would be very prepared to do so if they thought it worth their while. The myth of indispensability usually originates in those who are fearful of losing their jobs. If effective and universal systems of selection for promotion in industry and training were regarded as a necessary prelude to promotion, then there would be no difficulty in finding suitable candidates, provided, of course, that our Government institutions can provide the standard of course which is required.

Parallel with this is the necessity for carrying out, at all institutions concerned with management education, an adequate volume of research. This must clearly be done in close co-operation with industry. It must be accepted that the benefits of that research are freely available, both for the training of managers and for the direct benefit of industry itself. Such a partnership in research cannot fail to be of advantage for the improvement of teaching, the application of modern managerial techniques to industry and the development of a better understanding between teaching institutions and industry generally. I trust that your Lordships will forgive me if, for the purposes of this debate, I have been more dogmatic than I should otherwise feel myself entitled to be. I think there are advantages at this present time, in this difficult and amorphous subject, in taking a definite view.

In closing, I wish to put one or two questions to the Government, for we are no doubt at a point of time when it is possible for Britain to make a great leap forward in this field. I intended to leave it to the noble Lord, Lord Nelson of Stafford, who follows me, to ask certain questions about the two new business schools with which he is so closely associated. I merely remark that I hope that the limitations on building in London will not be allowed to impede the progress of the construction of suitable accommodation for the London school, and that it will be possible for it to have that accommodation long before what I understand is the present projected date of 1969–70.

May I first ask the Government whether they have evolved any policy with regard to a national system for managerial education? What role do they envisage for the various technological universities like the Northampton College of Advanced Technology, which is already doing admirable work in this field and which will soon have full university status? Secondly, if this expansion is to take place, we shall need the right staff of the right quality and in sufficient numbers. We have many excellent teachers of our own, but it is noticeable that the popularity of the various courses at present seems to relate directly to the drive and personality of those in charge. We must be prepared also to import teachers and to pay the salaries which are necessary. We must also provide for the recruitment and training of our own teachers who will be able to reconcile the determination of the academic world to maintain a high standard with the needs of industry for a practical training and quick results. What is the Government's policy in the immediate future with regard to the provision of training for teachers in the field of management education?

Thirdly, the Government, without impinging on the academic freedom of the colleges and universities or trying to compel industry to accept some hard-and-fast pattern of management education, must provide the effective machinery for co-ordinating effort in this field. What do the Government intend to do to provide this particular service? Fourthly, the cost of attendance at a post-experience or specialist course, or, if they are started, a top management advanced course, must be a charge on industry. But postgraduate training will probably be the responsibility of the individual or the State. How far are the Government prepared to provide funds to help with training at this stage? Can the Minister give us any indication as to the sort of conditions which may be applied to the provision of those funds, if they are forthcoming in the future?

Assuming that we are not divided about the importance of management training, and accepting that we must take the maximum advantage of research in America and in Europe, there still remains the vital need for increased research facilities here in this country. How far are the Government prepared to support, financially and otherwise, the necessary expenditure that will be involved? I notice that three Ministers are to take part in this debate, Which Ministry is going to be mainly responsible for handling this matter?—since it looks to me as if there is a danger that this problem will fall between at least three stools.

I have put six questions which I hope Ministers will answer. I do not think I have been unfair, and I hope that your Lordships will acquit me of any unfairness. After all, with three Ministers replying, it is an average of two questions each, and I hope that I shall be given answers. But, of course, the Government are only a minority shareholder in this particular business. The two that really matter are the institutions of higher education, on the one hand—existing and projected—and the immense apparatus of British industry, big and small, on the other. A real meeting of minds would solve overnight many of the problems of the development of management training and business studies in this country.

I do not claim that if this happened all the problems surrounding the economic future of Britain would disappear. Nevertheless, I believe that, with the powerful leadership and drive which a real managerial revolution would provide in this country, Britain would be able to look forward, during the remaining years of this century, to an industrial ascendancy at any rate equal to that which we achieved during the previous 150 years. My Lords, I beg to move for Papers.

3.39 p.m.


My Lords, I must first beg your indulgence in speaking for the first time in this House, but I feel slightly less uncomfortable than I otherwise should because I know, having studied the proceedings of your Lordships' House, that this has been a subject which has concerned you for a considerable time and one on which you have made a notable contribution. Therefore I cannot think of any audience I would sooner talk to about this particular topic. Indeed, the constructive speech of the noble Lord, Lord Alport, to which we have listened could just as easily have been made by me, except that I should not have made it so well. It seems to me that on this subject there is a real common purpose between us. I believe that I have another piece of good fortune: that in speaking for the first time at this Dispatch Box I am able to begin on a comparatively cheerful note. This must be unusual, and may be unique.

I am somewhat more cheeful just for once, and probably on this one subject, than the noble Lord, Lord Alport, for I can begin by saying that the Government most enthusiastically welcome the setting up of these two higher institutions of management education in Manchaster and London. One of these institutions is, as your Lordships will be aware, closely connected with my noble friend Lord Bowden, and this is why I am opening for the Government. It is slightly less embarrassing for me to welcome this institution enthusiastically than it is for him. On the other hand, the noble Lord, Lord Alport (and this is one of the few things on which I disagree with him), must not attempt to drive a wedge between the Ministry of Technology and the Ministry for Education and Science. Our relations are intimate. We are talking all the time. Any one of us can speak just as easily as the other about any of these concerns. Your Lordships can take my appearance as a sign of that dual harmony.

We are extraordinarily pleased that the establishment of these two institutions of management studies should have gone through with this almost unapproached celerity. If all our problems could be solved so fast, we should be in very much better shape. I think it is worth mentioning that almost all of this remarkable progress has been made by Members of your Lordships' House. The noble Lord, Lord Plowden, has been chairman of the committee on the London school; the noble Lord, Lord Robbins, was actively helpful in earlier stages; the noble Lord, Lord Murray of Newhaven, gave unusual support from the University Grants Committee; and the noble Viscount, Lord Blakenham, intervened most constructively from the Ministry of Labour. All of this shows that this is a concern of both sides of the House, and of all parts of the House, and we on this side do not claim any possible credit for any of the bright ideas that have come up: they are shared by everyone in this Chamber.

There are, of course, other noble Lords who have been particularly concerned with the actual operation. The noble Lord, Lord Franks, presided over a Committee which deliberated with great edge and produced a Report very rapidly. The noble Lord, Lord Normanbrook, then set up a Working Party which established the essential principle that the cost of these two institutions of management studies should be shared equally by industry and Government. This is important not only for itself, not only as a way of getting money, but as a sign of an intimate participation which, in my judgment, should be a model for a number of our affairs. I believe that here industry, the Government and the academic world must come together tightly, co-operatively, and not caring very much who wears the chief hat and who gets the credit.

Last of all, but most important, the noble Lord, Lord Nelson of Stafford, as a result of this particular policy, was set to work to obtain £3 mil lion from industry. On October 27 he reported that he had obtained £4.6 million from industry. My right honourable friend the President of the Board of Trade sent him a telegram. I am not sure that all members of the Government ought not to have sent him a telegram, particularly as he said that by Christmas £5 million would be forthcoming. My guess is that we shall need every penny of it, and a good deal more. May I at this stage, across the Floor of the House, pay a personal tribute to the noble Lord, Lord Nelson of Stafford, for it is from him and his father that I know what little I have picked up on this subject and a good many more. I owe them a debt which I am afraid I cannot expect to repay.

We welcome, then, these two institutions. The Government are extremely anxious that the London institution, which is floating in a curious limbo, not in the University of London but having some metaphysical connection with it, will begin, not in its permanent home but in some home, by October, 1965. It seems to us of great importance that its start should not be any longer delayed.

Now, my Lords, I should like to leave management studies for a little, though I shall return to them somewhat later, and talk in a more general way of how the Government regard this particular problem in the context of the many problems with which we are faced. This country has got to earn a living. We say that, we say it often; it is a cliché. I am not sure how many of us say it and at the same time believe it, or, at least, believe it to the point of action. It is absolutely necessary. I believe it can be done. I should not be standing in this place in this House unless I believed it was both necessary and could be done. But it will not be easy. My Lords, we are not doing well.

I remember reading—I did not have the opportunity of hearing—the most impressive speech of the noble Lord, Lord Thomson of Fleet, in which he gave some loose statistics—because all statistics on this subject are rather loose—on the difference between what a man can produce in this country compared with the production of his opposite number in the United States. My Lords, these figures are only too true. You can argue with them in detail; you can say that here and there certain factors have not been allowed for; but, broadly, by any real index, something has gone seriously wrong with us. Over a great range of industries Americans tend to produce per man, something between two and four times what we produce.

It is no use saying that this bad record of productivity, which we now know to be true of this country, depends upon the fact that we started from a higher plateau and therefore cannot be expected to improve as fast as countries starting lower. This sounds reasonable, but unfortunately, it is not reasonable if it is remembered that the American rate of increase of productivity is going up quite a bit faster than ours, starting from a plateau very much higher. So there we have it. We are in a state not only of crisis but of creeping danger, and this country, more than most countries, is not very good at dealing with creeping dangers. If the danger were obvious, then, I believe we should get to it, make sacrifices, work and think. But in fact it is one of those dangers of which the greatest possible peril is that you do not know it until it is too late.

The only recourse—and I think this again is common ground—is for us to use, with every bit of intelligence, will and imagination that we have, the resources of science in its widest sense. That is all we can count on. We do not have the great natural resources of the United States and the Soviet Union. On the other hand, we are too big a country to have the kind of specialised intensity that, say countries like Sweden and Switzerland can bring to their affairs. We live in a somewhat unfortunate between-and-betwixt stage. It is therefore all the more imperative that we should use every scrap of the wits Are possess and really make technology work for us as we have not done since the early days of the Industrial Revolution. This is our task. There is no other task anything like so imperative, and if we fail in this then it is hard to see how this country can have a future which any of us would envisage with pleasure.

My Lords, when you are faced with this kind of situation it seems to me that there are two dangers. One is to sit back and say you can do nothing until you know everything—and this is a point which the noble Lord, Lord Alport, made. You relax into a kind of pessimistic, scholarly contemplation, accumulate all the facts, gradually decide that things are even worse than you thought they were, and then, after ten years, say with resignation that it is too late. This is what one might call the total approach. The second mistake is to pick out one idea, one gimmick, one trick, and say, "This is the answer, and when we have solved this then we have solved all our problems." On the active side, this can be almost as dangerous.

In our judgment, it seems to the Government that we must tackle quite a number of hard and concrete tasks—a dozen, perhaps more than a dozen, almost at once. Some of these tasks will be indicated in the nearest future; in a few days. One of them, however, would certainly have been management studies if the ground had not already been prepared for us. So now I come back to management studies, in my own thinking, as one of the twelve or twenty tasks which must be tackled within two or three years if we are to have a fighting chance. It is in that way that we see it; not as the unique answer to our troubles, but as one of twelve or twenty very important answers to our troubles. I have met American industrialists, particularly American industrialists very well disposed to this country and very familiar with Washington and Whitehall, and I have heard them say that they think bad management is the cause of 90 per cent. of our bad position. This is arguable. In my judgment, it is in fact seriously overdoing it; but I should have thought that all of us agree that it is certainly one of the contributory causes. Here, then, we can find something which is concrete enough on which to make a start.

Your Lordships will be broadly familiar with the division of possible methods of management education at present going on in this country. The noble Lord, Lord Alport, gave us a summary: I will just run over them for the sake of the record. The first is these two élite institutions at London and Manchester, recently set in motion. The second is a set of courses at a number of universities or colleges of advanced technology which are not intended to be of quite such a high standard but which may nevertheless lead to a post-graduate degree. The third set of courses proceeds at regional colleges of technology and leads to a diploma in management studies, to which the noble Lord referred. About this the Government feel very strongly. We must continue to support this particular method of education—and, indeed, all possible forms of management education, without any loss to any one of them. The setting up of élite schools is no reason for neglecting ones which are dealing with lower management. In fact, it is desperately important we should not do this. Finally, just to complete the four, there is of course an enormous amount of management education going on within the firms themselves. In quantity, this would in fact be much bigger than the other three put together.

We refuse to say that one of these four is more important than any of the other three. All we say, as the noble Lord, Lord Franks, said, is that we shall need all this and then more. Every one of these methods is available, and it is most important that we should keep open the channels of communication between them. It is very important that we should get a person at present educated in a firm rushing to one of the other methods of training, and it is very important that people taking diplomas in management studies, if they show unusual talent, should be rushed to one of these schools of higher education. This is our intention. This will be my noble friend's primary concern, because, as I say, I am being cross-cast this afternoon. However, there is no dubiety on anyone's part about what must be done—and I think that answers one or two of the noble Lord's questions. Others will be dealt with, or some of them, by my noble friends.

There are four real problems about management education, if your Lordships will forgive me—I have talked somewhat longer than I had intended. One is the content of what you teach. You know, there is an old and corny saying that managers are born and not made. The truth is that out of 100 people selected from us, say, this afternoon, of reasonable intelligence, of reasonable physique and not too ill-fitting with their fellow men, about three would make excellent managers without being trained at all. They are the real stars. For various reasons, about 20, perhaps 30, would not, and the remainder can be greatly improved by training. I do not believe anyone doubts that that is the kind of scatter that you get in almost any of these activities which are more arts than sciences, as management is. In fact, the content of any course of management studies is for the moment bound to be in a pre-scientific state; but that, my Lords, is no reason for not doing it. If we wait until management is an exact science, then we shall wait for ever. We must remember that 100 years ago medicine was in about the same kind of prescientific state as the study of management is in now, but I cannot think but that it would have been a mistake if we had stopped the study of medicine in 1864.

The second point is: who shall teach? This is very difficult. This is one of the questions asked by the noble Lord. My own feeling is that this will have to be dealt with by an intimate relation between the institutions and industry. I believe we must make far more use of part-time teaching from industry in this as in many other fields. I think it is the only way in which we can both get the practical results we want and remove the alienation of the academic life and industry from each other, which has been one of this country's greatest curses for three or four generations. This we must do, and I believe the pure necessity of the situation—the fact we have not got the teachers, and that we have to teach the managements in these schools—will play some part in bringing the academics and industry together.

Thirdly—this is a somewhat esoteric point, but I think anyone who has ever been concerned with active industry would agree—it is most important that industry should make its own dispositions to accommodate the young men who have been trained. There is a danger in industry that you may have courses running very well, that you can train admirable products, and that then persons older, brought up in a less intellectual environment, brought up with less training, who have come up the hard way, find it extraordinarily hard to use such men. If we do not provide for that in advance we shall run into great disappointment and much bitterness and produce a kind of unemployed managerial intelligentsia which will be really very dangerous. This, I am afraid, is in industry's court; but any help which the Government can give in coping with the problem we shall not only feel delighted to give but consider it our duty to do so.

The fourth point is selection. Just as management studies are not an exact science, no more is selection and no more will it ever be; but there is a body of organised knowledge about selecting people for jobs a3 there is a body of organised knowledge about management studies. It is vitally important that we should use this in choosing the persons to go to this type of institution, or any of the types I have mentioned, and in picking them for jobs later. We have to go much deeper into our society for the managers we need; we cannot try to select managers for a country of 50 million people from 5 million or from 500,000. We have to remember the analogy of the Olympic Games which was once an activity in which only the privileged took part. Now look at the people who are winning gold medals and who come from every kind of social origin all over the country. It is important equally in management. We have to dig right into the country. We cannot afford to waste talent; we have not enough as it is. We must chase it and find it from wherever it may come, and not worry in what accent it speaks. This is perhaps the most vital social concern of the whole operation; and we shall use what influence we have to persuade these new schools in management to use all modern selection methods at all stages.

So, my Lords, I have done; but perhaps your Lordships will give this indulgence, for which I will not ask again. I should like to end on a personal note and to add this coda to any speech I make on tedious, incomprehensible, tangled or technical subjects in your Lordships' House—and by sheer necessity I shall be forced to make a few. This is a coda I will not use again. This country has to earn a living; technology is the only way to do it. Earning a living is necessary, but not sufficient. Technology is necessary, but not sufficient; it is a means to an end, not an end in itself. Earning a living is a means to an end and not an end in itself. Here I am speaking for my right honourable friend, my Minister, Frank Cousins; for in this we are absolutely at one. The end is to make a decent society; the end is to make us live better as individuals and in our society. It is to give worth and value to our society. It is to give worth and value to our individual and social lives—and I do not believe they can be disjointed—that we go through these difficult and sometimes frustrating enterprises. By this any course of action or any kind of political or administrative steps must ultimately be judged; and we have told ourselves we must never forget it.

4.4 p.m.


My Lords, we have listened to the speech of the noble Lord, Lord Snow, with the greatest possible satisfaction and I regard it as a high privilege to be the first to congratulate him on his maiden speech, and to welcome him to his place in this House and to the particular post to which he has been appointed. I can clearly say that he comes to your Lordships' House I already a familiar figure, not so much through activities in another place, but through activities in another medium; and we are already, to some extent, familiar with his mind and the range of his interests and this promises us great and good things in the future.

The position to which the noble Lord has been appointed is itself one which is bound to create a great deal of interest, but I can assure him that that interest will be greatly enhanced by the fact that it is held by him, and by the knowledge that, however deeply we are involved in the technological and machine age, the human and personal element of life will not be lost sight of. He has already in other ways given us evidence of his concern in both these fields. Again I should like to welcome and congratulate him on taking his place in this Chamber. I should like in another way to thank the noble Lord for what he said especially in the closing part of his speech—the coda, he called it, which he added to his speech.

The only reason why I presume to make a brief intervention in a debate which obviously must range far outside my capacity and knowledge concerns one particular aspect of it. Management study, as the phrase has it, seems to convey a number of overtones and impressions. I am not thinking here of the management of things. In this particular age, which is so complex and so technical, clearly an expertise is required in the management of things for which we cannot have too adequate a training. But management of people seems to me something different. By what right do we manage people and to what purpose are we to train people to do so? Is it to get more out of them or to help them get more out of their life?

Where people are concerned, management clearly involves certain moral questions. There are methods which are to be employed in handling them. Are they likely to encourage the development of human beings or in some way to degrade or depress it? There is a kind of relationship to be built up between them. Is it to be that which will develop or that which will crush? When it comes to decision-making, should we take the clearer, easier way of decision by authority or the slower and more educative process of decision by the group? When it comes to the question of the aims and objectives of the whole process of industry and what we have a right to expect of it, this seems to imply the handling of power over other people, since it affects them personally, which must be very responsible indeed. The hours of man's work, even if they are likely to grow less over the years, still represent a very large part of his active life; and the attitudes and values found within that sphere of work are likely to colour his whole outlook on life itself.

The issue here, therefore, is not only a matter of technique in training. It is a study, I believe, in moral responsibility of men over men. What are the criteria by which we are to judge successful management? Is it productivity? Well, there is no doubt of the need for this, especially at the present time. The necessity of efficiency in industry is a "must". Yet concentration of society upon this aspect might produce a great multiplication of goods, perhaps a great increase in prosperity and income, yet, inside people, a spiritual desert. Is the criterion great harmony in industry? This is even more important. Is it the avoidance of industrial unrest and breakdown? Is it the smooth working of the machine and the ending of tension or fatigue; or personal welfare and building up between people a sense of community?

All these are obviously important, and the art of management, seen in this light, might become a study of human behaviour with a view to fitting all the human units together harmoniously into the machine. It is still possible to produce a smoothly working community within industry which will be an impersonal one, based on the collective rather than the personal or the corporate. Some of our talk about managerial techniques and social engineering seems to come very near to missing the whole human aspect of this altogether. There is to-day, as we are aware, a greater tendency to depersonalise life; and the larger and more complex the industrial machine becomes, the more individual people may lose any sense of being persons and get lost in the whole collective mass. Is it not part of the malaise of modern youth that they feel this? To-day they have jobs, money and freedom, yet many of them also have the feeling that they are just units in a great faceless society; and they rightly rebel against it, though not always by the right means and manifestations.

I am not, of course, arguing against management and management study. This situation would be made no better by inefficiency in management. What I am pleading for—and I will not detain your Lordships over this—is that these questions should be taken into account: how wide is the range of management study? What subjects is it going to include? How far is it going to take into account the fact that the proper study of mankind is man itself, and that in this field there are rights of human personality which may so easily be lost sight of? This involves management at all levels. It is not enough to ensure within industry a number of trained personnel workers. The very word itself suggests not persons. If the whole weight of emphasis in industry is primarily an impersonal one, then no amount of personnel management workers will rectify it. This is something which concerns the responsibilities in leading and encouraging at all levels of industrial management. Therefore I ask this simple question: will human nature be part of the study of the potential manager, what he is worth and what he should be?

I know that there will be many different estimates as to human value. Humanists, theists, Christians and non-Christians may join in debate upon it. But I think they will all agree that this is one of the basic questions which lies behind our whole industrial society. But this debate should be there if we are speaking of managerial training. The noble Lord, Lord Alport, to whom we are all grateful for initiating the debate, asked us to learn from the experience of the United States. I am sure he will be glad to know, or to be reminded, as I hope your Lordships will, that in one school of business management and study closely associated with one of the major and better known universities in America, the department of the university of which this school makes most use is the school of theology—what people are. I know that theology has a sound from which many of us would withdraw or which we approach with hesitation, or even with shrinking. But whenever we are handling the question of people, the way they live, the things they live for and their relations together, we are, of course, handling theological issues, by whatever name we call them. I can only ask that in any plans or industrial study and development this aspect should have its object and true place.

4.15 p.m.


My Lords, it is first my privilege to congratulate from these Benches the noble Lord, Lord Snow, on the maiden speech to which he have all listened with such pleasure. He and I belong to a small hut, we should call it, select trade union of ex-Rectors of St. Andrew's University, and he will perhaps allow me to add to my more formal congratulations and appreciation the feeling I hold that his speech came up to the rectorial standard which means so much to him and to me. We look forward immensely to hearing the noble Lord again.

As has already been said, we are indebted to my noble friend Lord Alport for introducing this Motion. It is a subject in which my colleagues and I have taken an intense interest. I want to make it clear that I am rather more optimistic than my noble friend Lord Alport—and I think the noble Lord, Lord Snow, is inclined to agree with this view—as to the co-operation which already exists, and which will go much further, between industry and the various academic communities. I can only say that when we were founding the fellowship in research into management studies at Churchill College, Cambridge, we received, not only acceptance, but enthusiastic help from Sir John Cockcroft; and I am sure that this is widely shared.

Before I mention one or two points on the Franks Report on which I should like to hear the views of the Government, I should like to draw attention to two particular points. The first has already been mentioned by the noble Lord, Lord Snow, and is very well put by my noble friend Lord Franks in paragraph 42 of the Report, where he says: These activities occur in universities, colleges of advanced technology and technical colleges: in independent colleges: in the staff colleges of industries or of industrial and commercial companies. Their variety and extent are surprising, and little known to many in industry and in the universities". I think it is fair to quote that, in view of the great and multifarious work that has been done in this field. The second point that I want to make—and again deal with it because it is stated more than once in the Franks Report—is this. Paragraph 4 of the Report says: … the accepted fact that most training for business, and specifically most training for management, must always be 'on the job' in the factory or office… In paragraph 32, he says: Above all, there must be an adequate development programme within each company. If not, much of the work of the School will be wasted. I want to say a few words on what I believe to be industry's preliminary and residuary duty regarding management education, as I, and I think most of my friends in industry, conceive it and are fulfilling it. I speak with great diffidence after a mere two years in industry, but I should like to say to the right reverend Prelate who has just spoken that two points have been made abundantly clear to me. The first is the belief in the importance of people. Of course, we have to consider research, technological advances, production techniques and the search for markets which are in our minds all the time, and should be and must be; but I assure him that we believe that the ultimate key is people.

Secondly, I would assure the right reverend Prelate that I have been particularly happy in my own experience in finding myself working alongside men with as strong a sense of dedication for their work in industry as I have found in any profession. To some extent, that may ease the troubles which, if I may say so, he very rightly stated to us. It is on that basis that there is a constant and a strong search for future managers through the policy of management development and succession. Of course, everyone in a managerial position ought to be judging his own people and their performances. That is a sine qua non of good management.

On the other hand, in any growth industry growth itself makes heavy demands on personnel and know-how, especially when in order to trade one has in these nationalistic days—I do not use the word in any offensive sense for a moment—in these days of keenly felt nationalism, if I can put it that way, so often to be considering manufacture as well as trade in a developing country, and, therefore, a further strain on one's managerial resources. It is realised in industry that the importance of the management development plan, whose necessity I quoted Lord Franks as stating, has never been greater, first, to ensure a uniform approach to the assessment of people with a view to their better performance, their planned promotion or their transfer, and, secondly, to reinforce the aspect of leadership of finding future managers and successors. If it is going to work, such a plan must be simple, flexible and comprehensive. Therefore. in industry to-day you find that you have a plan designed to provide a continuous personnel inventory of managers from the first-line supervisory level or its equivalent in other spheres, right up to directing boards.

I should like to assure the noble Lord, Lord Snow, that that reservoir of management, or potential management, of which I have spoken, is fed from every form of entry into the company: from those who come in on the top floor, those with apprenticeships, those who enter after taking degrees at technical colleges or universities, or those who are brought in. The reservoir consists of them all. The first step one has to take is to get the records and to make an appraisal with a view to improvement of present performance, identification of management potential, and information as to individual aspirations. All these things must be known and considered in finding what your management potential is.

Then one comes to the stage of management development, where training is bound to take many forms. I cannot do more than mention job rotation, courses that are internal or inside one's company, or external, where the people are sent off on a course. In a company like my own, which is international, one has to be considering whether they will be sent on projects overseas, and what home assignments will give them the best training for the next stage in their lives.

The point I want to make is that that is going on as part of the development plan which, I repeat again, Lord Franks said is essential if any of our work is to succeed. I think he goes a little further than the noble Lord, Lord Snow. Lord Snow wanted them to go on together. Lord Franks goes so far as to say that without such a plan constantly going on inside a company, then the others will lose a great deal of their help. But, of course, one has to he considering the position. Having dealt with it from the point of view of the individual, one has to deal with it also from the point of view of the job. In a company that is growing, one has constantly to be considering what new jobs will come into the picture, and also the filling of old jobs. That goes to the heart of management succession: who is going to succeed on the short-term, and what person you are looking for in the long-term.

I have ventured to place this before your Lordships, not, I hope, at inordinate length, in order to make clear that this is going on every day and all the time, and is a responsibility which industry considers essential that it should carry. This analysis highlights gaps and weaknesses. To be effective, it must be built into a plan to follow up at definite periods of time. There must be a crosscheck given by the overall survey of potential carried out annually. It has this great consolation to me—I speak, I think, not only for myself but a number of my friends—that one of the most useful aspects of this operation is that one learns as much about oneself and one's own limitations as about those one is trying to appraise and assess.

My Lords, having put that, and expressed my belief that that is going on with greater strength month after month, I want now to deal with one or two practical points which are raised by the Franks Report. I agree with what is said in paragraph 5, that business management is practical in nature. Managers must be familiar with an increasing number of techniques and their potential and limitations; and they must face the fact that, in a dynamic company in a changing industrial climate, the crux of the problem is the need to plan for a future which, in the nature of things in this technological age, is at best vague and ill-defined, and in some cases very obscure. Therefore I think that we want more of the existing training, plus experiments to break new ground for the future.

While I have a great admiration for the Harvard Business School and the M.I.T., I think that paragraph 8 of Franks is right in warning us against transplanting any one American institution or method. It must be tailored to our environment, needs and background. I think, as has already been said, there is much to learn in Germany, France and Switzerland as well. On the question of staffs, we want men who are good teachers, with records of proven success behind them, and not people who just did not make it in the business world.

I agree that there must be the two main spheres—the framework knowledge, such as applied economics, sociology and psychology and, secondly, certain skills and techniques of management, such as operational research, linear programming, resource allocation and strategic and business planning, decision theory and its applications, and the use and application of computer techniques. I believe that these two spheres, which are both necessary, give a wide field for variety of experiment, and the director and his staff can work out combinations in deciding on their curriculum. I am also in broad agreement with the two types of courses, post-graduate and post-experience, subject to one point, which is kept open in the Franks Report. I should like to think about the third type, which my noble friend Lord Alport put out so attractively to-day. I do not think that there will be any difficulty about release for the courses. The noble Lord, Lord Snow, was good enough to remind your Lordships of what had already been collected from industry. The figure which I last heard was £4.8 million. I do not think that industry is likely to contribute £4.8 million and then not use the results of its contributions.

I have one point which I should be grateful if noble Lords opposite would consider. It is not absolutely concluded in Franks. I think that it would be of immense benefit to the person taking a post-graduate course, if he had a year or eighteen months with a company between taking his first degree and the postgraduate course. I believe (and many people with whom I have talked about this agree) that in this way he would get more benefit from the post-graduate course. To return for one moment to staff, I agree with the noble Lord, Lord Snow, that we do not want to drain off the cream of management teachers from the universities and technical colleges, so that we weaken them. That would be a poor and stultifying course of action. We want to consider secondments from industry of men who can ill be spared, and not just those available; and that is something that will require much thought.

My only excuse for detaining your Lordships so long is that I find this subject of intense interest and devote much thought to it. I think that it has been well summed up by my noble friends Lord Normanbrook and Lord Franks. The objectives must be to help men to foresee and decide well in swiftly changing situations. I believe that this is a worthy task, and I support it with all the force I can command.

4.37 p.m.


My Lords, I think that the whole House is grateful to the noble Lord, Lord Alport, for introducing this important and useful debate. I should like to congratulate him. I should also like to congratulate my noble friend Lord Snow on a notable maiden speech. I cannot claim to have any experience whatever in industry. My only experience was a brief period in the Post Office, which, it is true, is a very big undertaking and a civil undertaking. I have noticed that there is an idea that experience of Government is sometimes useful in industry. At least, I have noticed that a great many of our friends on the other side seem to manage to get high posts in industry after a short period in Government.

I suggest that the vital part of the whole thing is what is called "man management", relations with persons; and that experience one gets in business, in authorities and in Government. When I meet businessmen, I am always inclined to look at them from the point of view: is this chap a leader? Can he inspire followers? And I find that the best-run units in industry are those in which we get the same kind of feeling among people working there as we get in a good regiment, and no doubt in a good civil authority. I think that in spite of all modern advances, and not least of the technological discoveries of science, it still comes down to a question of the relationship between human beings. Unless a manager can get the necessary kind of loyalty, he will not succeed.

The second thing is that we have to make a selection of the right people who are really able to go ahead. In every undertaking, whether it is civil or military, business or State, there is always this difficult question about what to do about the seniors. Many very good people get to a certain stage and never get any further. It is impossible just to sack them. They can be pushed on to the routine jobs, but the really vital jobs must go to the people who have the particular kind of quality required. I have known big businesses run on that line. The man, perhaps at the head of the department, and perhaps equal to continuing on as that, has been given a job where his experience would be useful and at the same time another man may be coming up and moving in the same direction.

You find the same thing if you try to run a Government. You find that some people will get to that stage, and some have the power of growth. I think that one of the greatest points for industry is to let the people grow who can go on and on, and certainly not the people who reach a certain stage—perhaps quite a good stage—but can go no further. That is all I would stress in the short contribution I wish to make to this debate, that in every kind of technological advance—and by all means let us have our industry equipped in every possible technical way—it comes down eventually to the relationship of the man or the woman, the individual, with the management.

4.42 p.m.


My Lords, it is a privilege to be able to congratulate the noble Lord, Lord Snow. on his lucid, interesting and encouraging speech. I must declare an interest in this subject. because I am chairman of the governing body of the London Business School, sponsored jointly by the London School of Economics and Imperial College. In that capacity I welcome the support which the noble Lord, Lord Snow, indicated we should receive from Her Majesty's Government.

Like other speakers I am grateful to the noble Lord, Lord Alport, for initiating this debate. All political Parties have recently laid great stress on the need to modernise the economy of this country, and though part of the responsibility for this must fall on trade unions, the major part must fall upon management. Recently Mr. Alan Flanders, Senior Lecturer in Industrial Relations at Oxford, wrote that: management learns to manage by being forced to accept the full responsibility of management". There is, of course, great truth in this statement, but it is not the whole story.

Until recently most managers in this country would have claimed that the only way to learn about management was on the job. This made sense when the job was within the compass of the direct experience of one man. He would rely on that experience and a degree of intuition. At its best this meant subconscious absorption and analysis of the facts before forming a judgment and taking a decision. Nowadays, however, a manager's job is much more complex. Technological advances have made industrial processes more complex. The general development of industry has created a complex pattern of interrelationships throughout the economy, and, as a result, few important management decisions can be taken without considering a whole host of external factors; for example, facts relating to supplies, sales outlets, direct competition, labour supplies or other scarce resources—in fact, the whole industrial, economic and political environment. Even for the most enlightened manager it is easy to underestimate the magnitude of these changes. The problem of decision has become much more difficult and the cost of error much greater.

This situation, I submit, demands a conscious analytical approach to management, in place of the earlier intuitive and subconscious methods. It requires a state of mind that can recognise what is relevant to a problem and what is not; that can recognise what is measurable and will seek out and analyse the facts; that can recognise what is a matter of judgment and will give systematic consideration to the possible courses of action; that will assess the merits of each; and, finally, will take a clear and deliberate decision. The creation of this state of mind could be taken as a general expression of the most common element in all higher education, and it is for this reason that I have no doubt that provision for management education is both realistic and necessary.

My Lords, when management problems take a particular form, or become very complex, there is now available, as some of your Lordships have pointed out, a whole range of new management tools. These are formalised methods of analysing and presenting information, and they include operational research, linear programming, critical path methods, and so on. Most of these call for processing by computer, and there is much else that computers can do. Plainly, managers must know what techniques and tools are available and in what circumstances they can best be used. This again can be taught. Some people talk as if a knowledge of these techniques is all that is necessary to make a good manager; as if they were a substitute for judgment. But, of course, they are not: they are merely an aid to judgment.

If noble Lords agree with me, and share my view of the nature of management in the modern world, I submit that there can be no doubt of the need for greater provision for management education in this country. It would not do to belittle the work that has already been done in this direction. A great deal of management education has already been undertaken by individual firms; and this, of course, must go on, because it is here that the great volume of education must take place.

I hope I was wrong, but I thought I detected in the remarks of the noble Lord, Lord Snow, it feeling that perhaps there was a prejudice in firms against seeking out all possible talent within the organisation, from the shop floor upwards, and training it. I can only say that that certainly is not true within my own limited experience as chairman of a very large industrial group. A large part of my time, and that of my colleagues, is devoted to seeking talent wherever it may be and trying to train it and bring it on; and I believe that to be true of a very large part of British industry. The Administrative Staff College at Henley, and the Colleges at Ashridge and Cranfield have, of course, made a notable contribution.

Lord Robbins' Committee on Higher Education pointed out that there is an important distinction between the study of a group of subjects relevant to business problems, such as commercial law, industrial psychology, accounting, statistics and so on, on the one hand, and education for management, on the other. The Committee recommended the establishment of two major postgraduate schools. This, as we all know, was the theme of the Report by the noble Lord, Lord Franks, who recommended that there should be two business schools, rather than one or more than two.

The reasons for this recommendation are especially interesting. Lord Franks recommended two schools rather than one because—and I quote: No single institution is likely to be able fully to develop all aspects of certain subjects"; and also because— the extent of uncertainty about content and method shows that there is more scope for experiments in different lines of development than one institution can provide. He recommends two schools rather than more, because qualified staff and finances are limited. At the risk of being accused of special pleading, I must emphasise that I believe this last to be a most important recommendation. Teachers in the field of management education and studies are the scarcest commodity, and we must not spread them so thinly throughout the field that we should lose the opportunity of creating the maximum impact.

In founding these two schools we have a great deal of leeway to make up. The Harvard Business School was founded in 1908, but even before that there were three schools founded in America, at the University of Pennsylvania in 1881 and at the Universities of California and Chicago in 1898. Noble Lords may be interested to know that in a recent report published under the auspices of the Carnegie Foundation there are listed no fewer than 46 exclusively undergraduate schools of business, 105 schools of business with both graduate and undergraduate programmes, six exclusively graduate schools of business, and six schools of business linked to engineering or other schools, of which the most famous are the Massachusetts Institute of Technology and the Carnegie. Institute of Technology in Pennsylvania. If our two business schools are to fulfil the function expected of them they must be equal to the best in the world. We must create within the next five or ten years two institutions of world-wide standing, such as the United States has had over fifty years to create.

Lord Franks rightly laid stress on the necessity of forging a positive and close partnership between the university concerned and business. At the London Business School we have now a governing body of 21, which had its first meeting this month. We hope that by the beginning of next year we shall have a building in which, as temporary premises, we can start our activities, and even more important we hope by the beginning of next year we shall have a Principal. It goes without saying that the appointment of a Principal is a key appointment. He will determine the standing of the school and the success of its courses for some years to come. He, together with the Governing Body, must largely determine the pattern of teaching which the school will follow. I hope that the London Business School will be distinctively in the British pattern, but we also hope that we shall be able to draw extensively upon the experience gained, not only in the United States, but also on the Continent of Europe.

In his Report, the noble Lord, Lord Franks, referred to a mutual uneasiness existing between business and the universities which, he went on to say, if unchecked and not cured, could spread through the business school like dry rot through timber. I have not, either on the Academic Planning Board or on the Governing Body, seen any signs of the danger of dry rot.

The two new business schools will, I venture to say, have to set the standard of business education in this country. They will also have to become an important source of teachers of management and business studies. If they are to succeed in doing this, they will need first the support of the business world, industry and commerce. We must look to the business world for financial support. As has already been pointed out, the magnificent response to the appeal launched by the noble Lord, Lord Nelson of Stafford, has secured this, at least for the time being. But money alone is not enough. We must look to the business world for support by releasing to us, as teachers, part-time or full time, those with experience of management and the teaching of management. Not least, we must look to the business world to release to us an adequate number of pupils of the right quality.

I think it would be fair to say that the experience of some universities who have started post-experience courses on management education has been somewhat disappointing. They have had difficulty in attracting enough of the right men from industry. If we are to be successful, it is essential that firms should be willing to release their really promising young men for the post-experience courses at London and Manchester. The man who is difficult to release is the man who is doing a good job, and he is therefore the man who, in his own interest, in the firm's interest, and in the country's interest, should be given the opportunity to develop his ability as a manager by being sent to one of these courses.

Secondly, we shall need the support of the universities with which these two business schools will be associated. The London Business School, in particular, will have to rely to a large extent—and not only in its formative years—on the staff of its two sponsoring bodies. It must not only draw on the research activities of these two great institutions but take part in joint research projects. It will need to look to them for help in the use of their libraries, computers and other scarce facilities.

This is one of the reasons why I am sure Lord Franks was right in saying that each business school should be a part of a university but enjoy considerable autonomy within it. All my experience since I became chairman of the Academic Planning Board a few months ago confirms this view. I believe it to be essential, to be successful, that we must be part of a university; and to be a part we must be geographically near to it. Collaboration depends upon easy communication, if it is to be a reality and a help, rather than a burden and a cause of delay. Easy communication cannot be expressed simply in terms of propinquity, and the very close proximity that will be essential for the first few years will not be so necessary later. But it is a matter of experience that in London every mile of separation adds a further burden to collaboration and the fruitful movement of staff and student.

Finally, we shall need the support of the third member of this partnership, Her Majesty's Government. Here we shall need not only financial support but the determination to give these schools backing in every way. The establishment of the schools will not be easy, nor cheap, and it would be quite impossible if we had not the full authority and support of the Government behind us. I am encouraged by what the noble Lord, Lord Snow, said, to believe that we shall receive that.

5.0 p.m.


My Lords, I am sure that you would wish me first of all to thank the noble Lord, Lord Alport, for giving us the opportunity to discuss this immensely important topic this afternoon. If I may, with your Lordships' permission, I should like to add mine to the many congratulations that Lord Snow has received on his extremely informative maiden speech. As I have said, Lord Alport has provided us with an opportunity to discuss this matter which has been the concern of this House for many years. Like Lord Snow, I have read the debates in this House and I know how many of your Lordships have taken an extremely practical and most important interest in the work, and are already and at this moment supporting it with great enthusiasm and tremendous effect.

Lord Alport reminded us, when he began, of the extremely difficult state in which this country finds itself. This particular matter has been canvassed many times, and I should like to read to your Lordships what I believe to be one of the most eloquent passages in which it was ever embodied: We are entering now on the most serious struggle to which this country was ever committed. The latter part of this century will see us in an industrial war far more serious than the military wars in its opening years. There are five times as many university students in the universities of our greatest industrial competitor as there are in our own. The situation is grave. The thing which makes this so memorable is that it was written in 1868 by Thomas Henry Huxley. We have, as Mr. Priestley has said, "been here before".

The problem with which we must concern ourselves now is to decide in what way the situation is different now, and in what way we are likely to make progress impossible to us a hundred years ago. First of all, we are now in a much better position than we were to assess the importance of management as part of the requirements for industrial progress. Mr. Colin Clark, whom I can best describe as the Kepler of economists, has done a survey of the industrial growth of the ten great countries of the world, including India and the United States; and he has shown that the growth of the gross national product of these countries is related to capital and manpower much less than most people think, and that the wealthier the country the less is the importance of greater investment or more manpower and the more, correspondingly, is the importance of management. This, I feel, quantifies the feeling that many of us have had for a long time.

We are now talking about the development in this country of new business schools. They are effectively to be transplanted here from the United States and, as Lord Franks said in that most excellent Report of his, it is an extremely difficult thing to do, if not an impossible thing to do, to transplant a grown academic institution, particularly when we realise that there are hundreds of them in America and we are trying to start two here. Any of your Lordships who is familiar with the problems of a forester will know that it is a most dangerous thing to do to take a single tree from a coppice and plant it in the middle of a field; it will usually die. The forester says that the tree is lonely; the scientist knows that its bark is thin. Be that as it may, it is not an easy thing to do; we must ask ourselves not only what we are going to do in future but why it is that, at this late stage, we should still be contemplating the introduction here of a type of institution so long so familiar in the States, for if we are unable to provide here the type of soil in which such an institution can flourish, it will die on its roots. This, I believe, to be the most important problem with which we are concerned.

The reasons which led to the foundation of business schools in America are, in detail, many and complex, but in principle one reason overrides and overshadows all the rest. The American universities have always been quite clear that it is their duty to serve society as a whole and, in an attempt to do so, to study those problems which beset society contemporaneously. There was a time when the primary concern of America was agriculture, and in those days the great American universities studied it and set up immense schools of agriculture. Then came the turn of what they called the mechanic arts, and many State universities in America are to this day derived from what used to be called the "A and M colleges", which studied agriculture and the mechanic arts. At a time when it became obvious that the most important problems besetting the United States were those of business, the American universities decided that business they must study and business they must teach.

I believe that, unless and until our own universities are prepared to accept a similar responsibility and obligation, the future of business schools, and indeed of many other important institutions, will be bleak indeed. Fortunately, I find, talking to people, that the inflexible refusal of many of the older universities to do this kind of thing is at long last being mollified, and there are signs at last that things like business are beginning to be respectable in almost all the universities in the country.

There are other reasons which led to the failure of business schools to establish themselves here. I think the first of them is the fact that business efficiency, as such, has never been regarded as a really gentlemanly, or popular or the "U" thing to study. The idea that a business is in existence to make profit and that if it makes profit it is successful, and furthermore it should in the process develop itself, benefit its workers and improve the lot of society, has been a concept alien, I am afraid, to this country for many years past. Now that for the first time in history we have a Prime Minister who is dedicated to the general concept of efficiency, I hope that the idea that management should be respectable will gain ground in the country at large.

But, of course, the business schools to which Lord Plowden has referred had an extremely hard time getting themselves started, even in America, and there was a prolonged period when their life, their very existence, was in jeopardy. Some of your Lordships may remember a book by Abram Flexner on Universities in England and in America. In it he chose to pour scorn on many of the rather floundering attempts that the business schools were making to establish themselves in the academic tradition, and he took pleasure in the fact that in England, at least, we never bothered with such nonsense. This attitude commended itself only too warmly to many English academics and confirmed them in their view that subjects such as this were not their proper concern.

I have found in the last few years that there has been a tremendous change in attitude of mind, not only in the universities but also in industry—because of course we have been struggling with the problems of business schools in England for quite a long time. Your Lordships may perhaps not know that we in Manchester were teaching commerce as long ago as 1903. Here I must declare an interest because it was in my college in Manchester that we established a school of industrial administration in 1918. This school was founded as a result of the initiative of several Lancashire businessmen, of whom Mr. Samuel Turner is probably the most famous.

It started off with almost as much good will and as much encouragement—though with very much less money—as we have at our disposal to-day. And yet for a very long time it totally failed to make any impact at all, the reason being that industry tended to regard the academics as impractical, as theoretical and as men who would, if they could, obviously emigrate to industry where they would earn more money; and, on the other hand, the academics regarded the administrators as horny-handed, and, generally speaking, unreceptive and unresponsive to new ideas. There was a long tradition of mutual misunderstanding and failure to communicate, and this of itself prevented the growth of this department for forty years. It was founded, as I have said, in 1918, and until very recently it had extreme difficulty in establishing itself in the environs of Manchester in the sort of way that a business school such as we are now contemplating must hope to do.

I have noticed that business is changing its mind, and so are the universities. I think that the first significant break came when Sir Stafford Cripps was able during the war to persuade many industrial firms to engage industrial consultants to help them in their work. This for the first time gave industry the impression that outsiders could come in, ill-informed perhaps about the details of the firm, but able to make significant contributions to its improvement.

Not only are the firms of industrial consultants flourishing on a quite enormous scale, but industry, as many noble Lords have already said, has itself developed an immense enthusiasm for training schemes of its own. Last week, for example, the Glassmakers of Great Britain had their third conference this year on the problems of training their own managers, and again various academics were involved in all of them. This is almost typical nowadays. There is a clamant demand from industry for able men, and I think that, as far as one can foresee, industry is most certain to cooperate. But I must reiterate, as the noble Lord, Lord Plowden, has said, that it will be only by the closest cooperation between industry and the academic world that this project will succeed; and, furthermore, that the only people in whom we are really interested in our business schools are the people whom industry can least spare.

Many speakers this afternoon have spoken of what I can call the teaching function of the business school. Therefore, I should like, very briefly, to refer to another and equally important role that they must play in modern society. Any academic institution, if it is to hold up its head in the academic world, must engage in investigations of one kind and another; and the remarkable thing is that the laboratory of a business school is in the world of industry around it. It is possible for the school to find out more about the subject it teaches only by going out into the world and studying industry. I think that it is even more important that industry should co-operate in this than that it should co-operate in the teaching process. Unless it is possible for research workers from a business school to go into industry, and investigate problems of industry on the shop floor, then the subject will never advance: the students will never understand or appreciate that the subject which they are studying is a real one connected with the world they know outside; and the business world will never really appreciate or accept the work which a school is doing. The technique of management, as has been well said, can he acquired only by management, and the technique of investigating the ills that beset industry can be studied only by doing it on the job.

This raises extremely important questions, and, if I may be allowed to do so briefly with reference to my own college, I should like to describe two pieces of research which have been done in Manchester during the last three or four years. They have been described and are well known to some noble Lords, but perhaps others of your Lordships may like to hear about them.

The first was an investigation of the hospitals in the district. One may think that hospitals are hardly a problem of industrial management, but, none the less, the hospitals are immensely complex institutions, and they have within them in a very acute form almost all the problems which beset a large industrial firm. And to the ordinary problems must be added the fact that the actual work is done in a place of extreme human anxiety, where the people with whom they are dealing, the patients, are subject to quite extraordinary strains, both physical and mental. In a hospital, one sees many of the problems of an industrial firm in a rather acute form. The work, which I cannot, of course, describe in detail, was done in my College with the collaboration of the hospitals concerned, with the active support of the Ministry of Health and several of the great Foundations. Perhaps I need say no more than that I think it is very promising.

We chose a group of hospitals which were indistinguishable in external appearance, hospitals of about the same size, in similar towns, dealing with the same sort of patients and treating the same kinds of diseases. We found that in some of them only 30 per cent. of the nurses who entered training survived to complete the course; three-quarters of them left. In other hospitals—almost indistinguishable, as I have said—three-quarters of them survived to complete the course and only one-quarter left. As your Lordships probably know, there are at this moment many thousands of hospital beds which are unusable because of the shortage of nurses. So the first thing which emerges very clearly is that there are very great differences in the skill with which hospitals can retain their nursing staff and see them through the period of training and get them fully qualified.

We also found that there are significant differences between the length of time which it takes an average patient to recover from a conventional operation. If one classifies all the operations for appendicitis, or for any other disease one cares to name, one finds that some hospitals can discharge patients as cured in a time only about two-thirds as long as the others take. We know there is a grave shortage of hospital beds, so the suggestion which one is apt to make is that there are grave and unexplained differences in the efficiency of the different hospitals. The research workers investigating this came to the conclusion that these two things were very closely correlated. In other words, a hospital which cannot keep its nurses takes a long time to cure its patients; and, furthermore, both of these are closely correlated with the efficiency of the communication channels within the hospital itself. Particularly it turns out that the hospital which is run on authoritarian lines tends to be inefficient. That is just one of the many problems which we have investigated.

I should like to mention another. We did a survey of the attitudes of thousands of workpeople in the Manchester area about the general problems of innovation and change. We asked them, for example, whether they believed that the changes which were now to be introduced will make them better or worse off. Are they going to go on strike if new techniques are introduced which cause an initial redundancy in labour, and so on? We found immense variations between the men to whom we spoke, but we found—and this is the remarkable thing—that any given factory tended to have more or less the same view; and although there would be variations of opinion within it, the variations as between factories were much more striking. In other words, there are some people who would picket the choirs of Heaven, if they had a chance to, and try to get them to come out on strike. This is inevitable, and is merely a reflection of the fact that there are awkward people in any society. But the remarkable thing is that the variations between factories much exceeded the variations within a factory, suggesting that some factories are much more homogeneous, much happier, and much more responsible places than others. Yet again we found that the differences in attitude of mind were strongly correlated with the communications system within the factory. The factory in which the people on the shop floor believed that the management knew what they were worried about was the factory which was prepared to accept innovations.

These problems are extremely complex, and I could not deal with them or do justice to them this afternoon. The results are well known to my right honourable friend the Minister of Health who, in large measure, financed the work. The point I want to make is that the business school was able to study what I can best describe as the pathology of hospitals, and the pathology of factories. Furthermore, they were the only people who could engage in such an enterprise with the confidence of the people concerned. They came to it with the reputation of a university department, and with the obvious impartiality of people whose sole search was for the truth. In so doing, they unearthed some extremely important and hitherto almost unknown factors connected with the organisation of these immense enterprises, different though they may be.

I believe, my Lords, that one of the most important functions, which the business schools must discharge in the future, is to engage in enterprises of this kind. Academic institutions can do so better than anyone else, because they have, as I have said, the confidence of everyone. All academic institutions command great respect in this country, and their impartiality is not in question. We found that in some hospitals, the nurses, the doctors, the matrons and the patients would tall: to our researchers with extraordinary confidence, and would tell them all sorts of things of which they have probably never spoken before to arty human being. The same sort of thing happened in factories, and we unearthed many extremely interesting results with which, as I have said, it is impossible for me to deal this afternoon. I merely make the point that researches like these are probably the most important single responsibility for the schools to accept, over and above the one which has been so frequently referred to this afternoon—the formal instruction of students.

I would make the point that it is by engaging in enterprises of this kind that the students really come to grips with the ultimate problems of management; the problem of the unknown, the problem of the rapidly changing society when, as so often happens, the channels of communication within it are not able to cone with the rapid change on the shop floor. If this happens, an organisation which is perfectly happy in a static society may blow itself to death in no time at all. Business schools can train themselves to study such problems and try to understand the pathology of society, at the same time performing an extremely important role in the educational process. The graduates of the American schools regard themselves as having responsibilities to society at large, both to educate people and to study the problems with which they are faced.

I began, my Lords, by quoting from Thomas Henry Huxley. I should like, if I may, to quote from another speaker, a Member of this House—in fact, the last Member to be a Liberal Prime Minister, Lord Rosebery. He said that there was no contact between academic courses and the business of life. He complained that there was no course for a commercial or industrial career.

If our universities with their glorious though chequered career, are to keep their place in the forefront of English education, they must adapt themselves to the requirements of a great industrial empire, either by reforms from within or by commission from without. Otherwise, they will be left in a backwater in the stream of progress. My Lords, this might, I think, be taken as a motto for to-day.

The last point I have to make (I do not wish to strike a sour note, but it is a point in which your Lordships will be interested) is that it is in the last few years that the great American business schools have come to dominate American business. Now, of course, American business and the American economy are growing at an extraordinary rate, but it is true to say that, since the American business schools took charge, the rate of expansion of the gross national product of America has dropped below that of Europe for the first time since 1850.

5.24 p.m.


My Lords, may I first add my warm congratulations to the noble Lord, Lord Snow, for his very interesting and informative maiden speech? I would also add my appreciation for his kind personal remarks. In actual fact, we have worked together now for many years on just this problem of management education. I think, in that respect, that it is perhaps an interesting combination of an academic background and an industrial background.

It is an extremely important and valuable debate which we are having to-day, and I find myself in agreement with everything that has been said so far. A number of extremely important points have been brought out, and there are one or two which I should like to emphasise. First of all, a large area of management is essentially an art, and this is something which is difficult to teach. The right reverend Prelate earlier on referred to management being concerned with people, and it is especially in this sense that the art comes in. It is something which must be learned on the job and something which is very much concerned, I think, with inherited characteristics.

It is an art which is extremely difficult to define. It is that subtle combination of personal qualities and mental characteristics—qualities which enable the individual to arrive at sound judgments, often on conflicting data, with inadequate time and inadequate facts; those qualities which lead to the individual who can, in some subtle way, pick the right man for the right job when it is by no means clear who it should be; that ability to give authority, but at the same time to retain control; that ability to appreciate the time for action and the time for inaction; that curious indefinable ability to inspire and to give leadership, to which the noble Earl, Lord Attlee, referred earlier on. In this respect, I agree that management is an art and cannot be taught.

Having said that, may I say that there is much in management that is a science; there is much in management which is an accumulation of experience and an assembly of facts. In this respect, management is very much a science. I cannot understand why it is that some people think that a man should be sent on an important mission requiring a great degree of judgment and skill and decision, without being briefed as to the facts and circumstances hinging around that mission. That does not arise. But many people are appointed to positions of management in just those circumstances. The individual is left to a haphazard method—if you can call it a method—of picking up facts and data as he goes along, and this seems to be extremely cumbersome. But it has been the method of the past and is still believed by some people to be the right method to-day. Surely, proper briefing and proper training must be the right preparation for these important missions.

The noble Lord, Lord Plowden, referred to situation appreciation. Surely, with a proper background of training and preparation, appreciations will be better, decisions will be sounder and performances will be more efficient. On the other hand, we must not approach this subject in too complicated a manner. There are very interesting new techniques associated with the application of computers and other new programming techniques, which must be learnt in due course. But do not let us make the task too difficult in the early stages. From my own experience, it is surprising how many young people in industry, particu- larly those who for professional reasons have had to be trained in a technical background, do not understand the elementary principles of business. They do not even understand a balance sheet, which seems to me rather like playing bridge without understanding the score card. They have many misconceptions of business. They have many misunderstandings, based on unsound judgments and opinions, of the requirements of management. But that is our fault, because they have not been properly trained. This can be put right, to the great benefit of industry and commerce, and to the great benefit of the individual.

Management education and business training is something which is catching on. The noble Lord, Lord Bowden, has referred to the fact that from early days it is now becoming more and more widely accepted. I was glad to head the appeal, which was directed to industry, to raise funds for the establishment of the two business schools recommended by the noble Lord, Lord Franks, and for funds for management development in this country generally. I am glad to say that nearly £5 million has now been raised—£4.85 million, to be exact, to date—and I hope it will reach £5 million by the end of the year, when the appeal will he closed.

I am very glad that the present Government, as one of their first actions, by a message from the right honourable gentleman the President of the Board of Trade sent to me at a Press conference I was holding on this subject, confirmed the present Government's support for this venture. He expressed his delight at the success of the appeal, and said—and with his permission, I quote: The Government, for its part, will make its share of the cost available through the University Grants Committee and will continue to encourage the development of management studies at all suitable educational institutions. We are most grateful to have that early assurance, and industry has received it extremely well.

My Lords, I think it is extremely encouraging that, an appeal with a target of £3 million having been issued, this large sum has been raised. It has been raised from large firms and small firms, over 500 in total. This, I think, is very significant. It has been raised from the manufacturing industry, from banks, from insurance corn Danies and from commerce, and it has been wholeheartedly supported by the nationalised industries. I think this speaks fir itself. This movement is under way, and it has the widest possible base of support.

Noble Lords might well ask why it is that we have collected £5 million, or very nearly, against an original target of £3 million. The original target was the minimum target that we thought could be achieved and the minimum that would be required. The extra money will be extremely useful, and will be extremely welcome. First of all, we have to ensure that there are adequate funds for the two business schools recommended, one in London and one in Manchester. We all know how costs rise on projects of this nature, and I am quite sure extra money will be required before they are completed. I think it is extremely encouraging that this larger sum will enable more to be put on one side for management development generally outside these two business schools, and there are many requests coming in from universities and colleges all over the country. These can be more sympathetically considered with a background of this larger sum of money. Thirdly, I think it is most important to ensure that no further appeals are made to British industry, at least for a number of years; and that, I think, we can do.

So, my Lords, we are now on our way, and the stage is set for an important and vital new development in the British educational system. The groundwork has been done. Certain schools and colleges have been practising in this field, but now the plant is to grow, and grow quickly. Schools are to be built and courses established, and, what is most important, teachers are to be found. Here, I think, industry must play its part, and I agree with noble Lords who emphasised this point. We must also ensure that the right students are selected to take advantage of what has been done. Progress must, and should, be rapid.

In this respect, I would emphasise what has already been said. Let us draw on the experience which already exists. Do not let us try to learn what other people have already learnt. There is experience in America: let us draw on it and let us move on from the point they have already reached. I like the idea which was mentioned by my noble friend Lord Alport of the three-stage course—the post-graduate, the post-experience and the advanced. I also liked his idea of a sabbatical year. I am not quite so sure it is all that practical, but it is something which I know will appeal in many quarters.

In these important tasks we have before us, I should like to emphasise three things which I think now require the Government's attention. I hope that all is going to be done to ensure an adequate supply of trained teachers. They must be brought in from industry; they must be brought in from overseas; and they must be brought in from other institutions and courses. If necessary, they must be sent abroad for training. But this is of vital importance. I hope the Government will arrange for proper co-ordination between these various courses—the new schools, the existing establishments, the existing courses in universities and the new courses already proposed. There is a great danger of duplication here, of proliferation of the same thing; and this we cannot afford at the present time.

Then I hope the Government will ensure that adequate grants are made available to the students who will participate in these courses. We want them to come forward. The courses must and should be filled, but this will be very much influenced by the grants which are made available to them. Here I think it is important that this should be looked at in the context of not withdrawing grants from other worthwhile educational programmes and training activities.

My Lords, a new and exciting task is, to my mind, in front of us all. It is supported by the Government, it is supported by the universities and by commerce and industry, and substantial funds are available and have been provided. The problem now is to proceed, and to proceed fast; not to make it too difficult; and not to be deterred by undefined areas which may exist in the early stages. These will clear themselves as the programme proceeds—of that I am sure. The important thing is to start on the task of providing a flow of adequately trained, properly briefed, men into industry—men who know the basic facts and who have a basic understanding of what it is all about and the environment in which it works. At the same time, by the universities and industry working together we can also, to my mind, produce a much closer liaison between academic activities and industrial activities, which I think will be to the greatest benefit of us all.

5.38 p.m.


My Lords, my contribution to your Lordships' debate will be brief, but I should like to say a few words as one who is concerned at first-hand with management development in large-scale industry. I, too, should like to thank the noble Lord, Lord Alport, for introducing this Motion, and to offer support for the general propositions he has put forward. It is plain that, in considering this subject, your Lordships have in mind particularly the need for more education in management and business studies to be provided at our universities and colleges of further education. I do not wish for a moment to underrate the value of such academic training. For too long parts of British industry appear to have cut themselves off from these places of learning, to their own and to the nation's disadvantage. I have therefore felt it to be a step forward that, under the provisions of the new Industrial Training Act, for example, there is now the expectation of much more co-operation in industrial training generally between representatives of management and trade unions, on the one hand, and educationists, on the other.

The new business schools in London and Manchester have already been spoken of in this debate by people very much better qualified to do so than I am. They certainly deserve the support and encouragement of us all; and there are other universities and colleges where great efforts are being made to progress in this field. Particularly welcome is the increasing interchange of experienced managerial and university staff. But, having said this, it seems to me that there is some danger that every university and college of further education in the land would feel it must at once provide some course in management education and business studies. This would be all very well if every one of them was already adequately staffed to undertake such work. Some, I fear, are not. But I hope they will be, for management study is certainly not a field in which we can afford any debasement of our training standards.

As my contribution to this debate, the thought that I should most like to leave in your minds is that if we are really to improve the quality of management in British industry—and that is surely what this debate is all about—what will count for far more than the provision of educational facilities in business studies at our universities is the importance we attach to the development of management generally within industry. Here I find myself very much in accord with what the noble Earl, Lord Kilmuir, has already said.

I would suggest that managerial development may be divided into three parts. There is, first, the exposition training and day-to-day tuition on the job which every young manager should receive from those above him; secondly, there is the planned movement from job to job which is needed to broaden experience and provide training for more responsible posts; and, thirdly, there is this formal training to be obtained from participation in educational activities both within and outside industry. I believe that it is only if we see this question of formal education of management in perspective as part of management development generally that we shall begin to make the headway we all desire.

My Lords, there is only one more point that I should like to make, and it is this. Too often in the past the development of a manager, as just defined, and where it has been carried out at all, has been a matter simply of senior people determining by themselves the job to which a young manager should ultimately be appointed, the road by which he should approach that goal and the training that he should receive in getting there. I believe that if in the future we are to make full use of all the potential managerial talent there is in British industry, if we are to become more efficient and, incidentally, are to see that individual managers derive more satisfaction from the jobs they do, we must be prepared to take much more account than in the past of the views of those whose careers are being planned.

It should be a matter of routine in any sizable firm that, below a certain age, at least, each manager is seen at regular intervals by his boss; not simply to be told where he stands but, so far as possible, to be consulted as to the job to which he should next move, the training he should undertake, and so on. This is not a case of senior management surrendering responsibility for the final decision in such matters to a host of individuals; it is rather that a high, relevant factor in the minds of senior management when they are taking such decisions should be the views of the individuals whose careers will be determined by those decisions.

Although the views I have expressed find support in the current views of certain eminent social scientists who have practical industrial experience and, particularly, in the universities, I believe this to be a matter not only of academic theory but also of hard business sense; because it is only if we are to give enterprising young people the opportunity to participate more fully in the planning of their own careers that we can expect to attract to and retain in industry the first-class men who are needed. My Lords, I am sorry if on this last point I may appear to be straying some what from the main lines on which this debate has been conducted, but it is a point about which I feel keenly. It is in this wider perspective that I believe the Motion introduced by the noble Lord, Lord Alport, should be viewed, and I gladly give it support.

5.45 p.m.


My Lords, I hope the noble Lord who has just resumed his seat will forgive me if I do not follow the very interesting points he has put before your Lordships, and particularly perhaps the last point, which I appreciate is of considerable importance. As a university teacher and not as a business man in any sense, and as the first Back Bencher to speak on this side of the House, I intervene with some diffidence in this debate. After hearing the coruscating and profound speeches of those on the Front Bench, I feel even more embarrassed at placing a few views on these matters before your Lordships.

I have had a little experience of these matters as a university teacher of law, and, as it happened, that experience was in one of the pioneer efforts which have been referred to by more than one speaker, pioneer efforts actually conducted at the London School of Economics by the late Lord Beveridge, who is in the memory of many of us as one who informed the House on matters of this kind. These points have been touched upon by the noble Lord, Lord Bowden, and the noble Lord, Lord Snow. Here I should like to add my own tribute to the brilliant speech of the noble Lord, Lord Snow, one of the most brilliant and interesting maiden speeches that we have had for a long time.

I well remember the first time I had the pleasure of meeting the noble Lord, Lord Snow. It was preparatory to one of the debates which the noble Lord, Lord Bowden, referred to, on technological advance in this country which we owed to the late Lord Simon of Wythenshawe, who was a great leader not only of industry but in the university, and he was a very fine example of the way in which university work and industrial work can be brought together. He used to plan a debate with great care. If the same care could be brought into the branches of industry and commerce in this country, we should not be so worried nor feel it necessary to debate this matter this afternoon.

My Lords, I want partly to speak of what I shall call the Beveridge Experimental School of Economics in this sphere of activities because, like the one which the noble Lord, Lord Bowden, referred to in Manchester, it was on the whole a failure, although not altogether a failure. I think this may bring out the difficulties. I think there has been too much of an atmosphere of optimism. One or two noble Lords in industry have said that industry as a whole should be got behind this effort. But the fact is that great business concerns like that which the noble Earl, Lord Kilmuir, represents—and it was a pleasure to have him back with us this afternoon, if I may say so—do not really represent the great mass of the business and industry on which so much of the future of this country depends. We found during the last war that the middle units and even the small units then made up, as they still do, the great mass of industry and commerce in this country.

I think that the failure of these earlier schemes needs to be studied. And perhaps it is a weakness in this otherwise excellent document produced by the noble Lord, Lord Franks, which contains so many admirably put and pertinent points, that there is no detailed history of these schemes. It would have been a more valuable document if there had been, perhaps in an appendix, a survey of the existing institutes occupied with this sort of work up and down the country. The document is valuable but very generalised, and it could have been made more valuable than it is.

I think that the work Lord Beveridge did in this line has not received the attention it deserves. He was one of the great men of our generation. He had an extraordinary insight into all sorts of different national problems, and he had become convinced from his experience, partly in the Ministry of Munitions, in the First World War, and afterward as Director of the London School of Economics, through which he had close and intimate contacts with commerce and industry, that management was one of the country's weak points. He felt that it was essential that a top school of commerce, of the same kind as those which were already signalising themselves, particularly in the United States, should be established in London; and he attempted to carry this out at the School of Economics. Already, in the 'twenties, Lord Beveridge was quite clear that management was one of our weak points. I think that there is a good deal in the estimate—perhaps over-estimate—which the noble Lord, Lord Snow, gave, quoting an American business man, of 90 per cent. So far as my own experience goes—and I had quite a bit in the North-West, doing Civil Defence duties during the war—managements in middle-sized and small-sized businesses are obviously very far from being as efficient as they might be.

When I had the honour of joining Lord Beveridge's staff in 1930, he discussed this project, which was on the point of coming to fruition, with me on a number of occasions, because commercial law is my subject, and it is essential that business men should be able to appreciate the bearing of the law on the problems with which they are concerned. This is a very important aspect of the work done in the American business schools. That is how I got to know Lord Beveridge's views on these matters.

I do not want to labour the history of this in detail. We were fortunate in securing the services of a professor from Harvard Business School, one of their outstanding men, who came here for a whole year. I had more than one talk with him. Perhaps he took a rosy view of what was happening in the United States, but undoubtedly he held the view that the tremendous progress which was so evident in American industry at that time, when they were surging ahead in a most remarkable way, both in industry and in commerce, was due to the schools of the kind which he represented, Harvard being an outstanding one.

Lord Beveridge's attempt to get this school going received a certain amount of support, just as the present project has, from the "Lord Kilmuirs" of the City of the time—men of intelligence, understanding and imagination, who thought that this was valuable and sent some of their best young men to the school, and it went quite well for a year or two. I should say that it was devoted more to commerce than to industry. It is interesting that in the debate this afternoon the emphasis has been on industry, but we ought not to forget that to sell things to the world is just as important as to make them, and that unless we concentrate on commerce as well as on industry, we are not likely to get very much further. After all, to the people of Europe the English were a nation of merchants and shopkeepers long before the Industrial Revolution made them the leaders in industry as well.

Unfortunately, after a year or two, both commerce and industry failed to show the imagination which was necessary to appreciate that they should put their whole heart and enthusiasm into this experiment and as a result it has gradually died away. It was kept going so far by Sir Arnold Plant, the eminent applied economist, with a considerable known-ledge of business, to whom the country owes a great deal, and other colleagues; but the money was not there, the staff was not there and, above all, the enthusiasm and imagination of business people were not there.

I feel that we have not altogether got away from this state of affairs. From my experiences in the war, I feel strongly that our workpeople can compare favourably with any other workmen in the world. They are often slow, but their work is good. I think that our technology, so far as it goes, is good. The difficulty is that we have not enough of it. The gravamen of the debates introduced in this House over recent years by the noble Lord, Lord Simon of Wythenshawe, has always been on the need for building up our technology. Management, I am afraid, is not very good, and I do riot think that it is becoming better. At the sort of levels to which I have been referring, it is, if anything, weaker. One of the difficulties is that it is so easy to get contracts. Almost any sort of business firm, however inefficient the management, can get contracts. People are falling over each other to get work done, and there is no real incentive to good management.

If your Lordships will forgive a personal anecdote, we recently reorganised our central heating system at my home. It is quite small, and naturally we did not go to a very big firm. A fitter and his mate, whom the firm sent down, were obviously capable men, but they were continually frustrated by the incompetence of the management. The wrong things would be sent, and the me i were kept hanging about doing nothing; and the fitter was a man earning a large wage. They sent the wrong type of radiator. I rang them up and was told that they could not send a van all the way to Slough to bring things in for me especially: they said that a van would be going at the end of the week I rang again later and asked them if they were going to keep the fitters there, and suggested that it would be a great deal cheaper to send a man to Slough and bring the stuff. The fitter, whom hey perfectly well knew came in his own car, could have gone from our place to Slough, picked the stuff up and brought it back in less than half a morning.

I find that this experience is quite typical, because friends of mine have told me exactly the same sort of story in respect of other kinds of work. And until we get the level of efficiency increased and improved at these middle and lower levels of industry and commerce, the outlook will continue to be of the bleak kind to which the noble Lord, Lord Snow, and other speakers have referred this afternoon. I believe that the big concerns are fairly good and not much behind our great competitors abroad. But we have to advance much further and much more quickly in the middle areas.

I do not want to take up more of your Lordships' time, and particularly I do not want to discuss the whole details of the way this training in management and business efficiency, and the allocation as between the universities and the business people themselves, should go on. However, I should like to make two observations on this subject before I conclude. The first is that I think only part of this business is academic. We must be careful not to concentrate too much on the sort of things which are taught in the universities, important as they are from the point of view of getting good standards in management and in business efficiency. The converse of that is, of course, that we must be teaching other than academic things but things which are nevertheless of outstanding importance in the management of men, as my noble friend Lord Attlee pointed out, whether in business, in the Armed Forces or in Government. I thought that, as usual, in five minutes my noble friend Lord Attlee made more pertinent observations than most of us are able to put into a speech five or six times as long, particularly when he emphasised the essential importance of leadership in this business.

We say that leadership cannot be taught; and it is true that some elements of leadership must exist on which you can build. But, given those, it is possible to do a great deal in the way of teaching leadership and building it up. I spent a large part of the war years (I have probably told your Lordships this until you are quite bored with hearing it) working in the National Fire Service, which I think did an outstanding service to the country. There we emphasised the importance of building up leadership among the men; and after a good deal of experience of it, I became firmly convinced that leadership is something which can be built up provided you have, as I am sure we have in this country, the foundation on which you can do it. The whole country during the short time has responded in a remarkable way to the leadership of a Party which has a majority of only five in the House of Commons. I am astonished as I go about among friends of mine who are not members of the Labour Party, to hear them say: "At last a move is being made; leadership is being shown". I hope that, with the noble Lord, Lord Snow, and others who have come in with us to help, and under the new Prime Minister, we may be able to make progress in this important field.

6.3 p.m.


My Lords, against the broad sweep of the discussion this afternoon the only two points that I wish to make may appear to be very minor in character; but I do not think they are, and that is why I raise them. The first relates to something which was said by the noble Lord, Lord Snow, in his wonderful speech, when he referred to the need for careful selection: I think he mentioned the need to employ modern selection techniques in selecting people for management affairs. I suppose that is all right. The only thing I hope is that the time will never come when we shall decide that only men, and women for that matter, with university degrees are capable of management and that only such people should be selected for management training.

I raise this point because of an experience I had at the week-end when I went to a conference of the Institute of Metallurgists, who were holding their first conference on management. It was clear, from private conversations and from questions that were put to the lecturers, that there is a real sense of grievance, not only among young scientists but among scientists represented, at least, by this Institute, that scientists are not considered for higher jobs of managers, and the young scientist is not given an opportunity for training in management. This may be quite unfounded. The noble Lord, Lord Plowden, in his comments, said that in his view all levels should be considered; and it may well be that they are. But if there is this feeling—and it was certainly clear at this conference—that they are contained and isolated, whether it is founded or unfounded, it seems to me that this is a matter which ought to be given consideration.

It is true that many of the top positions in industry to-day are occupied by scientists. I suppose it is equally true that, however brilliant a scientist may be, he does not necessarily make a good manager. Nevertheless, if there is a body of people with a great contribution to make in the future who feel that they are contained and isolated, not only in the sense of salary, but in status and responsibility, then I think it is a serious matter. I hope that this fear I am expressing is completely unfounded; but it seems to me that the more we develop technically and scientifically, the more necessary will it become for managers to have scientific knowledge. Therefore, it might not be a bad thing—in fact, I think it would be a very good thing—if more scientists were managers.

Of course, scientists are, generally speaking, part of management. But the grievance in this particular case was that they were not managers. I do not think this arises mainly on salaries, because it is possible for industry to meet this on the simple proposition of paying as high salaries to scientists as they pay to managers. But that is not the point, because in the minds of the people working under the manager the position of manager in itself has more importance and responsibility than the research, which is perhaps, in some circumstances, even more important. What I am trying to say is that I hope that all those responsible for selecting young and other people for management courses will bear in mind that there is a possibility that they might be influenced by their desire to keep scientists, who may be doing an extremely good and valuable job, and the feeling that it is better for them to do this good job than to change them to another. It may be possible more easily to replace a manager than a good scientist. Nevertheless, if we get this feeling, particularly in the future, it will be a bad thing, because scientists will become resentful.

The other point I want to raise has already been referred to, particularly by the right reverend Prelate the Lord Bishop of Chichester and the noble Earl, Lord Kilmuir. It is the question of human relations in industry. I am quite sure that industrial relations will be included as part of any curriculum dealing with business management. What I am a little afraid of is that this will be dealt with rather on the lines of personnel management—the rather scientific method of handling men and women. What I am anxious should be included, if possible—it may not be possible or even acceptable—in any course of management is an attempt to get a greater understanding, not only by the managers, but by those who are hoping to be managers, of the trade unions as such. Why do the trade unions think as they do? Why do they do the things they do? This is something that I think every manager ought to try to understand, and at the moment, it seems to me that to a large extent, they do not. This is a generalisation, of course, and all generalisations are incorrect in part. Nevertheless, they appear to look on the trade unions as an obstacle—if you like, as a nuisance. Of course, on occasions they are; but I believe that the more you understand the motive behind, for example, the dispute, the more likely you are—and certainly you will do it more quickly—to find the solution.

So all I am asking, or all I am suggesting, is that when we are thinking of management courses, we not only deal with persons, as the right reverend Prelate suggested, in the technical personnel sense, but try to get across to these people whom we Ire going to try to train that the trade unions have a function; what their function is; why they act in the way they do; why they think the way they do. If we do that, I think industrial relations will improve. And if there is one thing which in the future will be as important as scientific development it is that the industrial relations in this country shall become better and better and the two sides closer and closer.

6.11 p.m.


My Lords, perhaps I might ask for some indulgence from your Lordship as this is my first appearance at this Dispatch Box or, indeed, at any Dispatch Box. But I have for many years sat.)n the Back Benches and listened in awe and admiration to those who have spoken from the Box on either side of the House. I may say that only on very rare occasions have I wondered whether the word "Dispatch" was really relevant.

I should like, first of all, to join with all the rest of your Lordships who have spoken in paying a tribute and offering our grateful thanks to our noble friend Lord Alport for having given us this opportunity to discuss a Motion which is not only topical but extremely important.

He introduced it with his usual lucidity, if I may say so with due respect, and he gave us a challenging review of the position of education for management at the present moment. He asked some pertinent questions, which no doubt will be answered in due course.

The quality of the debate that has followed has been of a very high standard. We shall have heard in all from three Ministers of the Crown, one former Prime Minister, one former Lord Chancellor, one right reverend Prelate and a number of noble Lords, all extremely distinguished and experienced in their own fields. I think it would be impertinent of me to comment in detail on the expert advice that we have heard from all of them. I can only suggest to the noble Lord, Lord Snow, that perhaps his figure of 3 per cent. of geniuses as managers may have been disproved this afternoon—- at least regarding those who were talking about management. May I. at the same time, say to the noble Lord, Lord Snow, with great humility, how much we enjoyed his maiden speech. Everybody who has spoken has also paid tribute to him, and I hope that we shall hear him on many future occasions. However dull the subject, I have the feeling that he would enliven it.

The Motion before us falls into two parts: management education and business studies. Although all your Lordships who have spoken have mainly devoted your remarks to management education, I should like, if I may at the end, to say a few words more specifically about business studies. So far as management education is concerned, there is no doubt at all, after what we have heard this afternoon, of the importance attached to it by your Lordships. The National Economic Development Council drew attention to its importance in its second Report on the conditions favourable to faster growth.

It is common ground, if I have interpreted the debate aright, that if we are to increase the efficiency of British industry, if we are to increase our productivity, if we are to make full use of the possibilities of automation, then we must improve not only our working skills but also our standards of management. The two must go hand in hand. But whereas we have paid a good deal of attention in recent years to industrial training, it is only comparatively recently that we have come to grips with the problem of management education.

The various stages have been mentioned by noble Lords already, but perhaps I might quickly recapitulate them, starting with the Robbins Report Recommendation No. 65: Two post-graduate business schools providing courses in management should be developed each in association with a university or a special institution and close to a large business centre. This was followed by the Report of Lord Franks under the aegis of the British Institute of Management, and the Franks Report dotted the i's and crossed the t's of Robbins, recommending one school associated with the London School of Economics and Imperial College of the University of London, and the other with Manchester University.

The next stage was the Working Party under Lord Normanbrook, established by the Federation of British Industries, which reported on the costs of these two schools. At this point the Government, which at the time was the Conservative Government, came into the picture; and I think I am entitled to claim credit for that Government in their swift action on the recommendations of the Norman-brook Report. The Government, your Lordships will recall, consulted with the University Grants Committee, and immediately agreed to make 50 per cent. of the costs of these two business schools available, provided that industry would find the other 50 per cent. While taking credit for the actions of the Conservative Government, I should also like to give credit where it is due, I am sure, to the noble Lord, Lord Snow, who told us that the present Government would continue that policy and would themselves contribute half the costs of these two schools.

May I now join with others of your Lordships in paying a tribute to the noble Lord, Lord Nelson of Stafford, and his committee for the swiftness with which they raised not just the target of £3 million but, as he told us to-day, £4.85 million, with a further target, I understand, of up to £5 million. I think the noble Lord and his fellow workers deserve our grateful thanks, and I can only suggest to the Government that if they are equally thankful they might match this pound for pound by their own contribution to business schools.

The final stage has been the beginning of the establishment of both business schools, and we have had the privilege this afternoon of listening to the noble Lord, Lord Plowden, the Chairman of the Governors of the London school, telling us something of the work he has been doing in connection with that school, and speaking also of the nature of management in present-day circumstances.


My Lords, may I ask the noble Lord for one point of clarification? I am sorry to interrupt his speech. In fact "business schools" in this country is a term of art, and normally means something to do with commerce. "Business studies" in England, unlike America, normally refer to commerce; whereas "management studies" is the general phrase for the kind of thing we are discussing. I take it that the noble Lord meant to refer to "management studies" in London and Manchester. Unless we get these definitions clear there are dangers, not to-night but at other times, that we may confuse ourselves.


I am referring only to management studies but, of course, there is this confusion because I understand they are called "business schools" in London and Manchester. This is the difficulty one is up against, but I am referring to management studies in schools in London and Manchester.


We are trying to keep the terms separate.


I will come on later, if I may, to business studies. I have spoken of the noble Lord, Lord Plowden, and we also heard from the noble Lord, Lord Bowden, on the subject of the Manchester school. One of the problems that has led to discussion both within and outside the House has been the timing of management training and the age at which it is most appropriate. There are those who have spoken in favour of post-graudate study, and certainly, I think, academically it is felt that it is easier to train young men at this stage in their career, but, there are, it seems to me, some disadvantages to this view.

In the first place it is impossible at this stage to be sure that those who take the course are potential managers, for until a young man has shown his ability in an industrial or commercial situation it is virtually impossible to forecast his managerial ability, so that some, at least, of the training is bound to be wasted. On the other hand, some suitable material may be overlooked. Also, from the point of view of the young man himself, he starts in complete ignorance of conditions in industry or commerce and is learning his subject academically without practical experience.

On the other hand, there are those who advocate what the noble Lord, Lord Franks, called "post-experience" courses for young men aged 28 to 35 who have already had some experience of working conditions. At this stage in a man's career it is much easier to select those who will benefit most from the training, although I realise that it will also be much more difficult, especially in small firms, for the person in question to be released for a sufficient length of time for him to be able to benefit from the course. My noble friend Lord Alport suggested a third stage, for the managing director level, of a sabbatical year. That is an interesting suggestion which I am sure will require much more detailed thought.

There is another point which has been mentioned in the debate—I think particularly again by the noble Lord, Lord Snow—the essential need for the highest quality of teaching staff. I was re-reading the other day the Newsom Report and was once again struck by its imaginative approach to the teaching of young people of average and below-average ability. But one is struck all the way through, not only with the imagination shown by the Report but also with the tremendous responsibility it throws on the teachers who have to implement it. I am quite sure that the same will be true in these schools—I will not call them "business schools"—that we are discussing. I am sure the teacher will have to be absolutely first-class and imaginative.

I hope—and hers I would reinforce something which the noble Lord, Lord Bowden, said—that there will be a constant interchange between the academic teachers and industry. I am sure that this is of vital importance if those teaching in the schools are not only to have the right approach to what they are teaching, but also to inspire the confidence of those they are teaching. I am hoping that the recommendation in the Franks Report, that industry will release part-time people from their own ranks to help in the schools, will come into effect. That is, after all, one of the reasons why London and Manchester were selected, and it is vital that this recommendation should be put into effect. I was happy that to-day we heard from the noble Lord, Lord Bowden, that he sees a change of heart on the part of the universities, especially in Manchester. It seems that we can look forward to good co-operation between industry and the university, and we are glad to have heard the same from the noble Lord, Lord Plowden, from his experience in London.

My Lords, the noble Earl, Lord Attlee, and the right reverend prelate the Lord Bishop of Chichester, I think, struck a chord with all of us in drawing attention to the human side of management and to the value of the man himself. I am sure we were all fully sympathetic to that, and I found a great deal of reassurance, as I hope they did, from the speech of my noble friend Lord Kilmuir, whom I was happy to hear again, as I am sure all your Lordships were, when he spoke from his own deep experience.

Before I leave the subject of management education I should just like to pay tribute, as other noble Lords have done, to the tremendous amount of work already being done by other agencies than these two business schools: the universities; the colleges of advanced technology, and the technical colleges, as well as consultant firms, and, naturally, industry itself. All of them are working in this field and have expanded their activities to a great extent. I was glad to hear from the noble Lord, Lord Snow, that it is intended that all these courses should continue side by side with the new business school, but it will be difficult to see in advance what further difficulties may arise as a result of the two new schools. It may well be that there will be extra difficulties falling on the other agencies in regard to finding the right staff and students of the right calibre. But we can learn only by experience. I have a feeling, with my noble friend Lord Alport, that there may well be a need in the very near future to review the whole field of management education; but perhaps this would be better done once the two business schools are in operation.

If I may add just a few words under the heading of "business studies", I should like to do so because there have been considerable developments in the last few years in the organisation of these business studies, and the noble Lord, Lord Snow, did invite us to dig deeply into society when it came to all forms of management training. There is now a very well established pattern of progress for business students, starting at its lowest level with the Certificate in Office Studies and rising through the Ordinary National Certificate or Diploma in Business Studies to the Higher National Certificate or Diploma in Business Studies. Now, at a higher level still, we have recently had the recommendation of the Crick Committee for a higher advanced qualification in business studies, equivalent in standard to an Honours Degree and taken after a four-to-five-year sandwich course. As I understand it, this new qualification is now being studied by the Council for National Academic Awards.

So the framework exists for this kind of business study, and it is up to industry and the Government to make use of it. I feel sure that the Industrial Training Act will be a stimulant in this respect. Under this Act the Central Training Council have already been established, and I am glad to know that they, in turn, have appointed a Commercial and Clerical Training Committee. I am hoping that through this Committee the Council will stimulate commercial training in industry and commerce.

My Lords, you will not expect me to miss this opportunity of reporting to you a very well tried piece of machinery that I have spoken about before in this House, the commercial apprenticeship scheme of the Association of British Chambers of Commerce. This scheme (if I may briefly outline the three great advantages that I see in it) ensures, under a letter of appointment or indenture given to the apprentice by his firm, that vocational education in a technical college or college of commerce is combined with practical training in the firm itself. This enormously increases the effectiveness of the student's studies at the college. In the second place, it guarantees the apprentice day release for at least one working day each week. The third point is that although it is geared to the National Certificate in Business Studies, it is sufficiently flexible to bring within its terms students who may wish to sit for professional examinations. To anyone who has responsibility under the Industrial Training Acts I warmly commend this scheme as a suitable vehicle ready to hand for ensuring a steady increase in commercial training and business studies.

I think it has emerged from this debate that we are all fundamentally united in our desire to see a great expansion of both management education and business studies. We all believe in their importance. There is no Party difference between us on the objects, and I am hoping that this debate will have helped us forward. May I, in conclusion, offer my congratulations to the noble Lord, Lord Shackleton, who is to reply, on his appointment as Minister of Defence for the Royal Air Force. I believe that this is the first time he will be making a full speech from the Government Dispatch Box, and I can only say how much we look forward to hearing from him, knowing, as we do from past experience, the deep personal interest he has taken in this particular subject.

6.32 p.m.


My Lords, in this agreeable atmosphere let me add my share to the meed of praise and congratulations to all those first-timers who performed to-day. I should, of course, first of all thank the noble Lord, Lord Alport, for introducing the subject, and I shall have some remarks to make in relation to his comments and certain of his questions. It was obvious that the House listened with rapt attention to my noble friend Lord Snow who achieved that sort of performance which we are accustomed to see from the former Chancellor of the Exchequer in another place, speaking on complicated subjects without apparently any notes at all and with a degree of brilliance which shows what a real addition he is to this House.

Another first occasion, of course, must have been the speech of my noble friend Lord Bowden—the first, I believe, again from the Front Bench. And of course I congratulate the noble Lord, Lord Aberdare. We are delighted to see him sitting on the Front Bench and, if I may say so, he made an admirable reply for the Government to-night. Indeed, the more I listened to the debate, the more I felt that the cares and responsibility of Government still appeared to rest on the occupants of the other side of the House while the more lighthearted and exploratory approach rested on this side. I will not say that I positively wished to interrupt those of my noble friends on the Front Bench, but none the less it seemed to me as if the transition was not quite complete. But if, in fact, members of the Opposition take hope from that, let me say that we are completing it very rapidly.

The noble Lord, Lord Alport, almost twitted us, I think, with having three Ministers to reply. I think it is a measure of the importance that is attached to this subject by the Government and, if I may say so without any reflection on noble Lords opposite, of the degree of expertise and experience in this field of management and administration. This is not to suggest that other noble Lords on the Government side do not have their own special qualities in other fields, but it is interesting to see how much experience there is on this side in the way of practical management. Indeed, looking at my noble friends on the Front Bench now, I see that we have one ex-chairman of a Bank; we have my noble friend Lord Rhodes, who has wide experience of management, and, of course, my other noble friends who have spoken. I think this augurs well for the seriousness with which we take this subject.

But I thought shat the noble Lord, Lord Alport, was not quite as fair to the previous Government as he should be. He issued an urgent call for action now—with which I am in favour; but I do not think he recognised frankly how much has been achieved in recent years. Of course all debates in this House have a pleasant repetitive quality about them, and recalling the earlier debates, of which we have had several, on management I detected in the speech of the noble Lord, Lord Alport, some echoes of those hopes and doubts which those of us who now sit on this side were voicing several years ago.

At the same time, it is clear that some real progress has at last been made, and I think it is right that we should recognise the promptness with which the late Government, stimulated by the imminence of a General Election, have acted in these matters. We give all credit for this advance, and, quite honestly, I feel that your Lordships' House can claim some of the credit for this because, as in many other fields, we have provided a forum and opportunity for free discussion of precisely the same kind that we have achieved to-day. I do not think, therefore, that there is any need for me, in winding up for the Government, to follow too closely any very specific Government line on this matter. It is right that when we move into these generalised subjects we should be able to talk pretty freely, though clearly those who speak from the Government Front Bench must be careful not to commit the Government to anything which they would subsequently find they were unable to carry out.

The striking point that has come out of this debate has, of course, been the extent to which we have at last as a country taken decisive steps in the way of business management. Whatever the semantic or linguistic difficulties, we are, I think, committed for the moment to calling these new post-graduate academic institutions "business schools". The fact that they have come so much later than in other countries does not, of course, suggest that no business and management training was going on in this country. But I think there is little doubt—and in this I am entirely with the noble Lord, Lord Alport—that it has not been seized on with the urgency that it should be. And, of course, in a country where there is so much small-scale industry, we have in this matter looked much too much to the leadership of the few very large firms, of which the firm of the noble Lord, Lord Nelson of Stafford, is a particular example.

We are aware, of course, of the very special problems that affect small firms. A number of independent institutions have been working in this field, and I think we ought not to leave this subject without paying some tribute to the British Institute of Management. People are apt on occasion to have slightly mixed views of their success, but they have tackled an extraordinarily difficult job, covering variegated groups of people, without much in the way of Government finance and, indeed, in recent years, without any Government finance. There are other bodies also, like the Industrial Welfare Society, not to mention the Henley Administrative Staff College.

I had intended to quote a definition about management from the late Lord Verulam, which I have already quoted to the House in the debate four years ago; but I do not think I will take up your Lordships' time beyond pointing out, as I think the noble Lord, Lord Rochester, and indeed the noble and learned Earl, Lord Kilmuir, did, that one cannot separate management training from the whole subject of management and industrial relations. None the less, I would say that the noble Lord, Lord Alport, was perfectly right to try to narrow it down to this subject. The difficulty in these debates is that, although they are interesting, we tend to go quite wide; but I think that, on the whole, the House has to-day succeeded in keeping the debate within the confines of the terms of the Motion.

The important emphasis—the most important in this debate to-day—is that which has been laid on providing a really firm academic base or basis for management studies, and on the acceptance that the disciplines of university standards should be applied in a field which to many is regarded as too diffuse to be susceptible to this sort of approach. The most satisfactory thing is the way in which this is in fact being recognised and is about to be introduced. At the same time, it is made clear, as it was most satisfactorily in Lord Franks's Report, that management training must be put within a wider framework—a framework in which it would be linked with the social sciences, economics and psychology. Indeed, I would rather think that in management studies we have at last successfully bridged all the cultures that have so frequently worried Lord Snow in the past; and here we have our perfect hybrid approach with both a practical and an academic attitude, and one that may have a useful unifying influence in other fields.

In the discussion on the type of training that should be given in business schools and business courses the noble Lord, Lord Alport, suggested that there should in fact be three ages of man or manager: there should be a period of post-graduate training, a period of training ten years later, and then a final period during the sabbatical year. I do not doubt that we shall continue to canvass this suggestion. I am inclined to agree with the noble Lord, Lord Aberdare, that if it were possible to give this education at a later stage, as it is done to some extent with people going on courses at Henley, there would be much to commend it. But, equally, if this is a serious academic discipline I think one must recognise that automatically there should be a post-graduate phase to it.

A point on which I hope we are all agreed is that, for the most part, management studies of the calibre which we are now anticipating should be carried out at these business schools will be a postgraduate rather than a graduate kind. I have had experience of dealing with students who in fact were doing graduate management training when they came to see me at business and were to proceed to carry out certain studies in the course of which, in a short survey, they were rapidly going to be able to tell us what was wrong with our personnel policies. It seemed to me that a little more experience of management would have taught them that it was a rather more complicated subject than a simple social survey would reveal.

On the later stages of education, whether it be after ten years or later, I should like again to commend the recommendations which I know have been put forward from Cambridge, of a more clinical or tutorial approach within industry itself. Of course, in this matter I am making a personal expression of opinion; but this might provide some of the marriage of the actual work and the academic side which I think is going to be so particularly valuable in management studies.

When we finally come on to this problem of the sabbatical year, I would agree with those noble Lords, including especially the noble Lord, Lord Alport, who said that people can he spared. It so happens that in the firm in which I was a director at the time—it was a large firm—we had some discussion on this question of a sabbatical three or six months after a period of 25 years. It was firmly turned down on the ground that none of the top people could ever be spared. Within two or three months the chairman had gone to America for three months on business, and the deputy chairman was sick for six months, and the firm carried on quite satisfactorily. I think that this question of indispensability is something that has to be met. If in fact people are so indispensable it suggests that there is something wrong with the firm's management development plans and organisation.

Several noble Lords, the noble Lord, Lord Plowden, in particular, referred to the new techniques; of management. I will not go into them beyond saying that I think it is perfectly within the capacity of individuals, whether or not they are scientifically or technologically educated (I hope my noble friend Lord Snow will agree with me) to learn enough to be able to use and appreciate these techniques. It is perfectly possible for classically educated individuals to learn enough about computers or linear programming or operational research, so long as they are taught about them sensibly in relation to their particular capacities and are not scared in the process. Furthermore, it is necessary that these types of technical knowledge should be regarded as essential if the manager is to be a professional and not an amateur. In the past the manager, in so far as he has been a professional, has been a professional within his own mystique. He has not appreciated that there was a genuine professionalism. It is this genuine professionalism which we are seeking, and which I think is one of the messages of this particular debate.

At the same time, several of your Lordships, particularly my noble friend Lord Attlee in a characteristically brief speech—so brief that by the time I had arrived in the Chamber after hearing his name over the loudspeaker he had finished—made one essential point. This was made also by the right reverend Prelate the Lord Bishop of Chichester, Lord Rochester and several other noble Lords—namely, that of course one of the most important, if not the most important, rôles of management is management of people. Indeed, I would reckon that, by definition, management applies more to people now, as it did formerly to horses. It is people rather than machines. Machines are a later development in management. Here I hope that the new institutions will help in the development of the human side of industry.

It is perhaps not inappropriate that a Minister for one of the Services should speak in this debate. I speak both as an ex-manager and as somebody who is now a Minister for an Armed Service which, like the other Armed Services, maintains an infinitely higher standard of management than is to be found in industry. I know that when people have come into personnel work in industry they have been deeply disappointed, not only at what seemed to them to be a certain indifference, but also at a certain inefficiency. There are techniques in man management—whether it be a regular review, or whether it be the annual confidential report—which ought to be used, and which are essentially human techniques. They are not inhuman techniques. They are the direct relationship between man and man, which is such an essential part. I strongly support the view of my noble friend Lord Geddes of Epsom, that it is one of the things that will need to be taught in business schools, and something which academics understand. There must be a much more highly developed understanding in industry of industrial relations and of the trade unions.

It is astonishing how often industries (I have seen this, and probably have done it myself) go on making the same old mistakes time and again in their dealings with their workers. The price is too heavy for this country to pay, quite apart from the point of the happiness of the particular employees. So that one hopes that there will be a much more determined attempt on the part of management which will arise out of this training. The noble Lord, Lord Nelson of Stafford, and I both attended a special conference of industrialists. I felt that I was perhaps rather out of place among such company—30 top industrialists, called by the former Minister of Labour to discuss the subject of communication. I applaud Mr. Godber's initiative, although I do not think that in fact it took us very far on that occasion.

None the less, as my noble friend Lord Bowden said, communication and communication techniques are of extreme importance. Here again there is scope for a great deal more sophistication and a great deal more thought than has been given to it by much of industry. It is striking how much time and money is spent by the best employers in this field, whereas so many other employers are scarcely aware of it and believe that a notice-board is all that is necessary. This is such an interesting topic that one would have liked to go on dealing with many of the points that were made. In going as widely as I have, I do not feel too inhibited because, of course, the House knows that when Mr. Hogg was Lord Hailsham he was never deterred, as a member of the Government, from expressing his personal views on matters of interest. I hope that in these debates we shall continue to do this.

At the same time, there are certain points on which I have been asked for an answer, and I will try to give it. I think it is not possible satisfactorily to answer the noble Lord, Lord Alport, on responsibility for management on the Government side, but in so far as his question was framed in relation to management education then I think the answer must be: the Secretary of State for Education and Science in England and Wales; and, in Scotland, for non-university courses, the Secretary of State for Scotland. But this is a very wide field, and I hope that other Departments—and particularly the Ministry of Technology, possibly the Board of Trade (unless the Ministry of Technology has taken over its duties), and indeed even the Ministry of Labour—will be concerned in this matter. But, broadly speaking, the answer must be: the Secretary of State for Education and Science. I think this is rightly so, because this must grow out of the educational system. We cannot talk about management education as something superimposed on a vacuum. This must spring, in the first instance, from a really first-class national school and university education system. I hope that that answers that particular point.

The noble Lord also hoped that the Government would ensure co-ordination between universities and other institu- tions to avoid unnecessary duplication. I must confess that, looking at the scene on this and knowing how much technical institutes, regional technical colleges and others have been involved, I should have been inclined to think that there would be some overlapping. But I am advised that no practical difficulty should arise, since there is so much consultation between the University Grants Committee and the Education Departments; and the Department of Education and Science is very closely in touch with the various local and regional courses in this field. It is certainly a point on which one would want to avoid bad types, or relatively useless types, of management education. One would hope that in this matter the two new business schools will provide a spearhead to this activity and will therefore help to pull the whole subject together. What has in the past been too vague and too loose a subject, without a proper philosophy, or indeed a consistent language of its own, will now, we hope, become a much tighter discipline than it has been in the past.

We were also asked about the extent to which the Government would provide funds for students. It is a little early for the Government to give any very definite expression on this matter. I should have thought (this is the best advice I have been able to get; and certainly it accords with my views) that post-graduate students will certainly be given consideration for support from public funds, as are other post-graduate students. But as to the post-experience students, as they are called, I think that we must expect industry to pay the cost. It may well be that there will be arguments in certain cases for some particular easement by the appropriate authority, but I should have thought that in this matter the individual employer should bear the cost. It will, after all, be a perfectly legitimate expense, and we hope that the individual employer will see the advantage. None the less, this will mean further education, and possibly further discussion, within industry.

It is quite clear that a purely monolithic approach to this problem would be quite out of keeping with the spirit of industry and, indeed, of the British people. We cannot expect the Government to over-co-ordinate in a field where so much depends on voluntary co-operation between industry and semi-independent institutions. We cannot expect the Government to dictate to the new business school, the planning of which is in the hands of the noble Lord, Lord Plowden. No doubt there will he considerable discussion is and considerable influence, but to some extent it will be Lord Plowden helping to tell the Government what they ought to do. This is a matter for a very real degree of voluntary co-operation, which I hope will be typical of the spirit of co-operation between industry and the Government which will prevail during these next few years.

As to the importance of this subject and the background against which we have debated it, I can only echo the sentiments of my noble friend Lord Snow, which were so fully accepted by the House: that management education, like increased technology, is a means to an end.

7.0 p.m.


My Lords, I believe that the procedure of the House entitles me to have a short last word, and I should like to begin, if I may, by saying how very much I am indebted personally to those of your Lordships who have taken part in this debate. I must confess that I have learned a great deal, and I hope that the debate has been of value to the cause with which we have been concerned.

It is somewhat dispiriting, perhaps, to hear from the noble Lord, Lord Shackleton, that many debates of this sort have taken place in the past, but that as a consequence so little—so he has indicated—appears to have resulted. However, I am sure that the members of the late Administration will be grateful to the noble Lord for the tribute which he quite rightly paid to them for the progress which has taken place in this field over the last few years. It sometimes appears to me, when one has been brought up in the rather rougher and more barbaric atmosphere of another place, that the courtesy and charm of your Lordships' debates and procedure tend sometimes to blunt the edge of criticism and impatience with which we approach a subject of this sort. I hope that if, in the few words I want to say, I am critical and sound impatient, your Lordships will not regard it as being in contradiction to your normal custom.

The noble Lord, Lord Shackleton, said that he was giving us, to all intents and purposes, a personal view, and claiming an entitlement to do so because of the precedent set by Mr. Hogg when he was Lord Hailsham and in this House. But is not the fact of the matter that the Government have no line on this subject at the present moment? Is not the fact of the matter that he is, as we who have some experience of this know very well, compelled to take a personal view, because there is at present no thought-out policy for the Government in this particular field? After all, my Lords, we have heard the very distinguished contribution which the noble Lord, Lord Snow, made at the beginning of the debate, ending with a confession of faith which we on this side of the House should have been very glad to echo, if we had been able to put it in such graceful terms. I merely thought, when I had heard it, that there was a good precedent of a distinguished novelist who started active political life in Radical ranks, and eventually transferred, after he had learned different things, to lead the Conservative Party. I can assure the noble Lord that he will have a very warm welcome on this side of the House when, in due course, he makes that change.

The fact of the matter is that in the case of the noble Lord, Lord Snow, we have an example of the meeting of minds in industry and in the academic world, to which I referred. He represents in himself what one would hope was far more common than is at present the case in that particular sphere. Indeed, one of the reasons why your Lordships' debates do not always, perhaps, reflect the difficulties is because the contributions are made by those who are already convinced of the importance of something and who practise it in their own firms. The noble Lord, Lord Nelson of Stafford, the noble Lord, Lord Plowden. and the noble Earl, Lord Kilmuir, are the heads of great firms who set a standard of management techniques as high as anything, certainly in this country, and, for all I know, in the world.

But we are in difficulty, as the noble Lord, Lord Chorley, reminded us, because the great mass of British industry is not taken up by those great firms. Where there are weaknesses of management, those weaknesses are most likely to be found in the smaller firms with smaller resources, whose success and productivity are still vital to the success of this country in achieving its economic viability, and yet which have a very long way to go at the present time to achieve anything like the standard which is necessary if they are to be successful. Therefore, my Lords, I do not think that we should be satisfied with the progress that has been made, nor do I personally feel satisfied with the approach that the Government have made to this subject. I do not say this in a partisan spirit at all.


My Lords, would the noble Lord allow me to interrupt? Many of us were also brought up in another place, and the courtesies of this House do permit us to express personal views; but the noble Lord ought not to assume from the very clear remarks that have been made by my noble friend that there is not a very definite Government policy in regard to this matter. Also, our purpose will not be weakened by a consciousness that our predecessors have, in fact, done a considerable amount to help the cause.


My Lords, I am grateful for that assurance. But I was, if I may, just about to comment on one point which the noble Lord, Lord Bowden, made at the end of his speech. I think I am right in saying that the noble Lord, when he ended, said that now that the business schools in the United States of America had provided the bulk of the leadership of industry, productivity in American industry had either fallen or, at any rate, was less than at any previous time. I think perhaps he made that remark as a joke; I do not know. But does he mean that this is cause and effect; that because of the successful output of the business schools in the United States American industry is now no longer as efficient as it was, before they were able to meet its needs to the extent that they are?


My Lords, I should perhaps explain this. The position is that this particular remark was made to me by Eli Shapiro, who is Dean of the business school of Harvard. What I said is, in fact, quite true and it is a cause of considerable embarrassment to business schools themselves. What I said, and I repeat it, is that since the business schools really took over American business, for the first time that they can remember the rate of growth of the gross national product in Europe, as a percentage, is greater than that of America. In absolute terms it is still much smaller. But this is none the less a point worth making, lest we presume to think that business schools in themselves will solve all our difficulties. I was simply amplifying the point made by my noble friend Lord Snow: that business schools are important but of themselves not entirely sufficient.


My Lords, I am grateful to the noble Lord for that explanation, because I know very well that I am not the only one in this House who listened to his remarks and who assumed that he was in fact telling us that the practical results of the development of management training when applied in the United States of America had been proved not only to be a weakness in, but almost to have a deterrent effect on, the increased efficiency of industry. I hope that as a result of this debate not only shall we feel here in this House that progress has been made, although we are aware of the progress which still remains to be made, but that the remarks of your Lordships will be read outside; that those who are concerned with undertaking the progress will continue, particularly in this new development of the two new business schools, with, as I am sure they will, all energy and speed; and that they will have the support of the Government in meeting the many demands which will have to be satisfied in order to bring this new advance in management education to success. My Lords, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.