General Electric (GE) used to be a prestigious conglomerate. It was well known as a place whose senior management was often recruited to become CEOs at other companies. More recently, however, GE has been struggling and has announced that it will be breaking up into three separate companies. It has been said that huge diversified conglomerates are harder to manage than somewhat smaller but far more focused companies.

On November 13, 2021, as the Wall Street Journal online reported on GE’s upcoming breakup, it included a quote about the role of management. The quote said “Management matters a lot, but it doesn’t matter as much as you think (especially if you are management).” This quote was presented in light of how GE, a company that was once the epitome of a training ground in managerial excellence, now struggled as pandemic/economic conditions negatively impacted GE’s businesses.

In some situations, including industries where GE is a player, the recent harsh conditions may have been difficult to foresee in advance. In addition to arriving unexpectedly, these conditions can leave companies struggling until things improve, since management often can’t do much to remedy devastating situations like pandemic related shutdowns. Thus, for many companies, managing their way out of the severe downturn might not be doable. In such dire situations, management really may seem not to matter as much as many managers would like to think it does.

Despite this, there are some pandemic devastated situations where management can have some impact. Although management can’t bring pandemic affected airline and tourism industries back to pre-pandemic performance, there are still ways management can matter in those dire situations. For example, management can matter by keeping costs down to help a company survive. Also in these downturn situations, management can matter by steering the company a bit more toward parts of the business that might not be completely paralyzed by the downturn. For instance, management of a pandemic stricken airline could focus more heavily on air cargo when passenger traffic has almost dried up. Finally, during a harsh downturn, management can decide not to panic and to avoid the sometimes tempting, drastic, but inappropriate, changes that can easily turn into expensive, failed detours for the company.

Nonetheless, up to this point, the quote about how much management matters is presented in the context of dire pandemic related conditions. As described in the paragraphs above, the general impression is that management matters, but there is really a lot that is beyond management’s control.

Yet, it’s important to view the quote about management in a broader context and consider what the quote means when conditions are not so dire. Even when times are not as bad, there may be some things beyond management’s control, in other words, things where management might not matter. However, based upon my research into business success and failure patterns, there are many instances where the right strategic choices make a huge difference in how well a company performs. When these decisions are made, management can matter a great deal. These decisions can cover areas such as dealing with disruptive technologies or identifying new areas for growth. Correctly making these choices are a win for the company. Management can have tremendous influence on how well a company does in these areas, as well as in making sure corporate culture meshes with strategic direction.

Thus, when looking at the above quote about how much management matters, it’s important not to get bogged down with the negativity of how little management matters in dire situations that are beyond control. Even in dire times, there are some things that management can impact. And, especially when not in an unprecedented, dire, pandemic related situation, management can have a tremendous impact on the company.