Quaternary sector and mindset in management

Quaternary sector and mindset in management - TDH - Dario Tatangelo

Culture is not having a well-stocked warehouse of news, but the ability our mind has to understand life, our place in it, our relationships with other men. He has culture who is aware of himself and of everything, who feels the relationship with all other beings.” [1]

If we think about business, we are thinking about a human institution. This concept is the essential when we try to analyse the management model. Companies are made by people. We don’t care the size.

This idea is vintage and extremely recent. We are living in crisis moment, where everything is changing day by day. Something changed after the 3th industrial revolution o Digital Revolution in 90s. We are still living the consequences in our life, the digital transformation is keeping on the 4th industrial revolution.

In the economics literature some author describe The quaternary sector[2], as an independent sector from Service Industry or economic activity based on knowledge or intellect.[3] Other part of economist is starting to define The Quinary field[4]. At the moment, the topic is still vague. For sure, the technology is shaping our society in everyday life, work and language.

Answer to 4th industrial revolution in management

Everything is changing and we are living in paradoxes: permanent crisis. How do the Companies manage this perpetual movement in the market and mindset?

It’s impossible shortly answer. We can try to split the culture in management in two opposite macro-areas: conservative management and innovation management.
“The fear of breaking balances leads to more complex paths. Human body have to be in balance, the ecosystem that hosts us must be in balance with people. The planet, in fact, cannot change, people must and can. We must not break the balance, we just have to manage those that have excessive forcing in order to be replaced by others, without punishing or penalising anyone. On the contrary, we reward the merit, it will be the strongest trigger for those who have deliberately excluded themselves.”[5]

Conservative management

Conservative management is an approach reactionary to the innovation. The management try to keep on the status quo in process and service. It’s interesting the adjective is common in political field (as conservative party), but not in management or Human resource management. We can also find this expression in the medical literature as a kind of intent to preserve function or body parts[6].

The conservative manager is similar, because someone try to: ignoring the change with some or all stakeholders. This need could become an explicit will to stop every change with reactionary activity. A motto is we always do in this way.

4 characteristics of conservative management

What are the main characteristics of conservative management?

1) Distribution of power

Who is decision maker? It is important understand the effective distribution of power in Company. The Organization chart is not enough, there are managers without power (budgeting for example). Who does decide? In Conservative management the power is in small elite. In some cases, there is a match between the owner and management.

2) Kind of process.

What is the main model of developing in company process? There are 3 kinds of developing process: Top-down, Bottom-up, hybrid.

In the Conservative management there are inflexible and Top-down approach. The organization is based on strong hierarchy. The main decision is in the top and the effect fall to the others. The employees cannot give feedback, pro-active is threat. The best employ is a yes man. The deviance in idea is punish with isolation, psychological violence, change of role, mobbing and so on.

The common mantra is I put the money I decide according with the risk of business.

3) Lack of investment for human resource. The Conservative management consider people numbers. The people should be grateful to work only because they are paid. The main activity to hold people is the fear. There in no focus on training or upskilling. The human management is close administration management.

4) Lack of data driven culture. Perception is all. The data are not considered in decision making process. The only data collect are the revenue and sales. The qualitative and quantitative KPI are ignored as rate of turnover, exit interviews, compliance. There are form of control. In critical cases, there are micromanagement.

We can consider Conservative management a bottle neck for change management. This mindset and culture are alternative and antagonist of Innovation management.

Dario Tatangelo is Adjunct Director for professional development at ENTD – National Body for Digital Transformation and Digital Human Consultant. He is certified Ethical Trendsetter and Human Resources Specialist at ATOS.

[1] Antonio Gramsci, Prison Notebooks, 1935

[2] Peter Busch. “Tacit Knowledge in Organizational Learning“. Tacit Knowledge in Organizational Learning – Academia.edu

[3] The Quaternary sector – Wikepedia

[4] Kellerman, Aharon (1985-05-01). “The evolution of service economies: A geographical perspective 1“. The Professional Geographer. 37 (2): 133–143

[5] Pasquale Aiello, A New Framework for Job and Education, European Commision. 10 March 2021.

[6] “Medical Definition of CONSERVATIVE”. www.merriam-webster.com. Retrieved 2016-04-25.

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