Into the minds of management

February 17, 1995

Lucy Hodges talks to Erica Shoenberger, (right) a geographer who believes that corporate decisions have as much to do with boardroom culture as economic facts. Erica Schoenberger's favourite reading matter is The Financial Times. She scans its pink pages every day for stories about the fortunes of multinational companies. Are they diversifying? Are they building new factories, and, if so, where? Are they introducing new manufacturing processes?

When she is not clipping articles about corporate America, she is interviewing chief executives, trying to establish the corporate Weltanschauung. Why did Lockheed, for example, take so long to shift from making aeroplanes to making missiles in the 1950s? The real obstacle, she thinks, was the attitudes of senior managers, the way in which their identities were tied up with a product. It had little, if anything, to do, say, with the recalcitrance of production workers.

It comes as a surprise to find someone so fascinated by economic processes employed as a professor in the department of geography and environmental engineering at Johns Hopkins University, the elite establishment in Baltimore. Particularly someone who does not have a degree in geography. But Professor Schoenberger, 42, whose research is exciting attention in Britain, is no conventional academic.

Sitting in her attic office at Johns Hopkins, with her trusty Australian sheepdog, Sasha, at her feet, she explains that she raises eyebrows not so much because of her subject matter but because she uses interviews rather than statistical surveys for her research. Her work is thus damned as "journalism", an epithet almost as derogatory in America as in Britain.

Professor Schoenberger is writing her first book on why American corporate giants are finding it so difficult to survive. Her central thesis is that corporate culture - the way in which senior managers see the world - affects the decisions they make. Their ideas about who they are determine how they behave, she believes. Outside observers may see their resistance to change as stemming from bureaucratic rigidity or uncertainty about the competition, but they are wrong, says Professor Schoenberger.

As she wrote in her case study of Lockheed, "there was no shortage of 'objective' knowledge about what to do, and the firm had no reason to believe itself any less capable technologically than its competition. The impediment to change was not lack of information or uncertainty. Neither is there any reason to believe that the people who ran Lockheed were irrational, excessively shackled by received tradition, or paralysed by an encrusted bureaucracy - after all, these were the same people who consistently designed pioneering aircraft. They resisted change because they did not want to be what (or who) the change implied."

Professor Schoenberger quotes Hall Hibbard, former senior vice president of Lockheed: "We couldn't give a damn about missiles. We didn't like missiles. We wanted airplanes . . . The top guys at Lockheed were all airplane guys. They weren't missile guys. They are entirely different. The problems are entirely different and what you do with them is different. So you can either be in that field or you can be in this field."

How did someone with a degree in history become so interested in the gritty problems of today? The answer lies in her childhood. Schoenberger's father worked for the Californian company, Philco, which did a lot of work for the Lockheed satellite programme. Young Erica grew up knowing the scientific lingo. In fourth grade her science project was on ramjet engines. "I did that project by interviewing my father,'' she explains. "So you see I have been doing this since I was ten. Nothing changes."

After high school near Palo Alto and a history degree at Stanford, Erica Schoenberger spent several years doing what was called "movement", as in "anti-Vietnam War movement", or "anti-imperialist" work. Americans would describe her as "a leftist". Leftwingers are an endangered species in America and concentrated mostly in universities.

She worked in Boston and later for the Pacific Study Centre in California, founded by a physics student thrown out of Stanford for anti-war activities. The centre researched the military-industrial complex in which her father had laboured.

So, she got to work clipping articles from, yes, The Financial Times, and other newspapers. She has been clipping ever since. The pay was meagre, and Schoenberger was forced to supplement it with part-time work as a secretary.

There came a time when she decided she needed a professional qualification. "I wanted to be a community organiser,'' she explains. "I wanted to get a professional degree that would give me some credibility.'' She enrolled for a master's in city and regional planning at Berkeley. That cured her of her desire to be a community organiser and a PhD followed. Her dissertation was on foreign manufacturing investment in the US.

"It was the period when factories were being closed down, people were being laid off by the thousands and tens of thousands, and yet certain regions were receiving a lot of incoming investment. So the Sun Belt seemed to be doing OK compared with the Frost Belt (the old industrial arc from the Great Lakes through to the Mid-Atlantic). Also without too much difficulty you could notice that a lot of investment was going into places like Mexico and the Philippines."

The debate was - and still is - couched in terms of "What's wrong with America? Why is it no longer industrially competitive?'' Both left and right seemed to agree that American labour was being priced out of business. The right argued that firms had to seek out new and cheaper sources of labour. The left sought protection for American workers. As an avid reader of the business press, Schoenberger began to wonder about this thesis. She noticed that practically every day some foreign firm was announcing that it was setting up a factory in the US.

"My first reaction was, 'Don't these people know that manufacturing in the US is doomed? It's all going elsewhere.' I began to assemble a clipping file that suggested that either European capitalists were suffering a mass hysteria or they knew something we didn't."

Schoenberger went to talk to the subsidiaries of European companies in America. The firms were mostly in chemicals, electronics and instruments and she discovered they wanted to locate in expensive places because that was where the markets were. "In these businesses you need access to markets, you need to be in the market to understand and respond to it,'' she says.

It gave Schoenberger immense pleasure to be able to say there were powerful arguments for manufacturers to stay in America. Ever since she has been trying to shift the debate, away from foreign workers stealing US jobs to, for instance, why there are not enough jobs to go round. What does it mean, for example, for Detroit to become the centre of the world autombile industry and then find its secure position cruelly undermined, with tremendous social consequences? In the space of ten years Detroit has gone from being a very wealthy city to one in which one third of its people live on welfare.

This kind of thinking shows how geography has been transformed in the past 20 years and the boundaries blurred between sociology, anthropology and geography. No longer are young geographers content to describe simply what is there. They want to work out the processes that create different regional configurations of industry, urbanisation or agriculture.

Former Oxford professor David Harvey, who teaches now at Johns Hopkins, puts Erica Schoenberger in the vanguard of this trend. "She has been in the forefront of attacking the questions of regional development and industrial technological change and the implications that flow from them,'' he says.

Schoenberger is interested in how people create opportunities and problems for themselves in the process of building societies. "You build cities, you build transportation networks, and once you've done that you've created an infrastructure, a built environment,'' she says. "That produces wealth. But it also produces some obstacles. Once the highways are there you can go there but not this other place. Once the city is built then the possiblities for moving stuff around or using space in different ways might be foreclosed."

Her technique of inquiry sets her apart from most geographers. She has discovered that time and again the men in charge have failed to make the rational decisions, the ones that seemed obvious at the time. Schoenberger likes to probe for reasons. She takes her interviewing very seriously. She prepares carefully, knows her stuff and spends hours checking and reproducing quotes. She takes great care with interviewee stories, her assumptions and interpretations.

But many of her colleagues are wary, believing it is not science. How does she answer critics who accuse her of journalism? "You can do all the statistical analysis you like,'' she explains, "but all it allows you to do is to deduce, in some cases very weakly, the rationale behind what is revealed in the statistics.

"The kind of world that I'm studying - what corporations do and why they do it - is populated by strategic actors. There is a very complicated logic that explains why you show up in this statistical category rather than that one and I don't think you can find out what that logic is by looking at what categories people end up in. I think you need to go talk with them and find out the story. There are different ways of constructing real knowledge about the world, useful knowledge, valid knowledge, and the scientific method cannot be the only one."

Half way through her PhD Schoenberger moved to Johns Hopkins as a research assistant. Immediately she finished her doctorate she walked into an assistant professor job at that university, and last year she won tenure as a full professor with a joint appointment in the department of anthropology. That means she is under intense pressure to publish, to hustle for money from outside sources for grants to do more research, hence more books and articles. Teaching students is something you are supposed to fit in around the all-important writing, she says.

But being the person she is, Schoenberger agonises about the teaching. She doesn't write in term time because teaching takes too much out of her. She is proud of a class she taught last year called Social Conflict in the City with David Harvey in which students were asked to look at Baltimore's development strategy. Like Detroit, Baltimore has fallen on hard times and is attempting to replace its manufacturing base with tourism.

The students were expected to conduct collaborative research projects. Some opted for oral histories of low-wage workers, which meant they had to go out and find poor blacks willing to talk to them. "They learnt how hard it is to get information about what goes on inside companies and in people's lives,'' she says. They were met with a brick wall by local companies. "But I was real happy about it because it did connect students to the rest of the world.'' Who knows, one day she might persuade her undergraduates to read The Financial Times.

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