Introductory Analogy: The Kruger National Park has hundreds of thousands of animals. Within reason dictated by the artificially imposed boundaries of the park, no systems are needed to control it. It is natural, and as such, it finds its own equilibrium. Much like Adam Smith’s notion of the invisible hand of the market it is self-regulating. Zoo’s and circuses on the other hand have far fewer animals but require far more management input to ensure survival of the animals, the socialization of individuals, as well as productive social groupings of animals. The environment is not natural and due to externally imposed restrictions it cannot self-regulate.
The Industrial Revolution was one of the most significant shifts in human production and has greatly impacted human social life. As always technological advancements outpace the cultural advancements required to balance the potential impacts wrought by technological change. This is called cultural lag. Clearly seen in the fact that early classical management theory begins with seeing the worker as no more than a productive unit; which through task specialization and time-motion applications can be reduced to an automaton that can produce more output (when organized into groups with other automatons) that an individual could under the old craft-production system.
What this approach fails to take into account is the correlation between increasingly productive systems and increasing human alienation. Alienation from the product as a whole (task specialization); alienation from society (9-5 in a controlled environment without being able to choose the other individuals in the environment; and being curtailed by rules as to how you may or may not interact with them) and; alienation from the customer, the end-user. The human condition is disrupted by the requirements of the industrial system. It is not able to self-regulate because the achievement of “balance” would not result in the achievement of maximum profit.
Hence the X and Y model can be tweaked. X and Y can be re-worded, and once reworded it applies to all workers:
It is not the natural state of man to undertake repetitive tasks day in and day out towards an indirect goal; the entirety of which he is largely alienated from; in an environment where social relationships are externally imposed. This is an unbalanced condition/system and behavior will tend towards actions or inaction that will seek to restore equilibrium.
If you then manage in the X-prescribed ways you reinforce the alienation and imbalance mentioned above.
But, based on this new assumption, if you manage in the Y-prescribed ways the manager becomes a contributing agent of equilibrium. Less energy (conscious or subconscious) will be spent on seeking equilibrium and more energy will be available for productivity.
You find the extreme examples of this in companies like Netflex and Oticon in management textbooks. These “Spaghetti-organisations” allow the workers to interact, live and be productive from 9-5 (or whenever really) in a more natural way. It is closer to equilibrium. (Obviously with profit as a bottom line manufacturing industries will be impacted differently than creative industries by this approach. But then again, look at the introduction of women during Wartime Manufacturing. One gets the sense of a deal of fulfillment through these roles due to very tangible shared common goal – fulfillment brings equilibrium.)
But what happens when the founding head of a spaghetti-organisation leaves? The spaghetti-organisation becomes more routinsed. The leader is replaced but his charisma was lost. Whilst management can be learnt charisma (leadership?) cannot. And if the manager cannot be a contributing agent of equilibrium in his workers 9-5 lives through natural leadership he/she will increasingly have to rely on routinised interactions, monitoring and controlling activities, and ultimately “routinised leadership”. (Possibly why we need the interpersonal aspects of Human and Organisational Studies to provide “routinised leadership” when a leader is not available.)
So, to answer the question of “why we need managers?”: The industrial organization of human beings and production is in opposition to the natural condition of man, and as such will be assailed by forces seeking equilibrium. The job of the manager is to a) keep those forces at bay through an X-type approach or to b) Be cognizant of this and to, within the realms of what is possible, be a contributing agent of equilibrium whilst still leading a team to deliver outputs. If the manager posses a natural un-routinised charisma and leadership quality these will have multiplying effects on his/her efforts to be a contributing agent of equilibrium.