Today it is difficult to believe that the economic system was not always based on capitalist principles, because even in the era of the Soviet Union certain features were traced in economic management. For example, the so-called "managers" who exercise control over the work of state-owned enterprises can be compared with top managers who now manage corporations. The managerial revolution that came during the era of great industrial discoveries contributed to the formation of top managers as a special class of society.
However, it should be noted that when the term “managerial revolution” is mentioned, one should bear in mind not only the events that marked the emergence of top managers, but also a number of other events that influenced the formation of modern management. In fact, these latter events are more correctly referred to as the fifth managerial revolution, although sometimes the word “fifth” is omitted to simplify terminology.
Let's take a short digression into history and see how the formation of the managerial class took place, and what managerial revolutions in management existed. As a result of the first revolution, writing first appeared, which means that economic operations began to be documented, which allowed them to be analyzed and recorded. The second revolution, also dating back to distant BC, gave rise to the first set of laws regulating commercial relations, giving them a systematic approach, and thus simplifying the decision-making process.
The third revolution strengthened the role of the state in governance. As a result, there appeared institutions involved in planning and management, and this can be considered a breakthrough of mankind on the way to building a single economic system. After that, nothing changed for a long time, and the fourth revolution came to us with the end of the Middle Ages and the heyday of capitalism. As a result, the entrepreneurial class flourished, which became the core of the economy, as well as the source of all its achievements and problems. In those days, entrepreneurs independently made management decisions.
However, as economists of the time predicted, such as Smith, this could not continue for a long time, so the fifth managerial revolution was more likely not a revolution, but an evolutionary development of the already existing economic system. As a result, a class of professional managers was formed, as already mentioned.
Thanks to this, entrepreneurs were able to relieve themselves of the responsibility of managing the enterprise, ceasing to play a significant role in its development. Thus, capitalism moved to the phase when the role of the owner ceased to have significant significance in economic processes. Today, if owners are completely excluded from the economic system, while maintaining other sources of financing, the economic model will not be affected in any way.
Certain advances in this direction are already taking place. Today, financial institutions play a dominant role in management, since the fate of the company and the direction of its development largely depend on their decisions, while the company takes the form of a self-governing structure. If previously the owner’s income was a priority, today it is the company's profit, regardless of how it is distributed.
Thus, the fifth administrative revolution significantly changed the world, despite the fact that the formal economic system has not changed, we are still talking about capitalism, in fact, its essence has undergone major changes.