The Essential Drucker

(by Peter F Drucker, ISBN ...)

I. Management

1. Management as Social Function and Liberal Art

In less than 150 years, management has transformed the social and economic fabric of the world's developed countries. The truly important problems managers face do not come from technology or politics; they are problems caused by the very success of management itself.

The fundamental task of management remains the same: to make people capable of joint performance through common goals, common values, the right structure, and the training and development they need to perform and to respond to change. But the very meaning of the task has changed, if only because the performance of management has converted the workforce from one composed largely of unskilled laborers to one of highly educated knowledge workers.

Knowledge, especially advanced knowledge, is always specialized. By itself it produces nothing. Yet a modern business employs thousands of highly knowledgeable people who represent up to sixty [or more!] different knowledge areas. None would be effective without the managed enterprise. [Flat-model structures, like Zillow and GitHub, are modern-day examples of the potential failures of a lack of management]

The Origins and Development of Management. [World War I and World War II both required effective management by its belligerents to survive; the Germans had shorter supply lines, better strategists, but the US dominated because it produced more war material than all the other belligerents combined, and put them on distant shores and cities.] By [World War II]'s end, almost all the world had become management-conscious, and management emerged as a recognizably distinct course of work, one that could be studied and developed into a discipline.

Management and Entrepreneurship. Both management and entrepreneurship are always needed and work together. Not to innovate is the single largest reason for the decline of existing organizations; not to know how to manage is the single largest reason for the failure of new ventures.

The Accountability of Management. To whom is management accountable? And for what? On what does management base its power? What gives it legitimacy? These are not business or economic questions; they are political questions. Management has to be accountable for performance. BUt how is performance to be defined? How is it to be measured? How is it to be enforced? And to whom should management be accountable?

What Is Management? Management is, above all else, based on a very few, essential principles:

Management as a Liberal Art. Mangement is what tradition used to call a liberal art--"liberal" because it deals with the fundamentals of knowledge, self-knowledge, wisdom, and leadership; "art" because it is also concerned with practice and application. Managers draw on all the knowledges and insights of the humanities and social sciences--on psychology and philosophy, on economics and history, on ethics--as well as on the physical sciences. But they have to focus this knowledge on effectiveness and results. For these reasons, management will increasingly be the discipline and practice through with the "humanities" will again acquire recognition, impact, and relevance.

2. The Dimensions of Management

Business enterprises exist not for their own sake, but to fulfill a specific social purpose and to satisfy a specific need of a society/a community/individuals. They are not ends in themselves, but means. Management is the organ of the institution.

The question, What is management? comes second. There are three tasks that management has to perform to enable the institution in its charge to function:

3. The Purpose and Objectives of a Business

Asked what a business is, the typical answer is, "An organization to make a profit"; this is not only false, it is irrelevant. The concept of profit maximization, is, in fact, meaningless. The danger in the concept of profit maximization is that it makes profitability appear a myth. Profit and profitability are, however, crucial. If archangels instead of businessmen sat in directors' chairs, they would still have to be concerned with profitability, despite their total lack of personal interest in making profits.

The root of the confusion is the mistaken belief that the motive of a person--the so-called profit motive of the businessman--is an explanation of his behavior or his guide to right action. Whether there is such a thing as a profit motive at all is highly doubtful. There has never been any existence of the profit motive. We do not learn anything about the work of a heart specialist by being told that he is trying to make a livelihood, or even that he is trying to benefit humanity.

In fact, the concept is worse than irrelevant: it does harm. It is a major cause of the misunderstanding of the nature of profit in our society and of the deep-seated hostility to profit.

To know what a business is, we have to start with its purpose: to create a customer.

Markets are not created by God, nature, or economic forces, but by businesspeople. It is the customer who determiens what a business is. It is the customer alone whose willingness to pay for a good or for a service converts economic resources into wealth, things into goods. What the customer buys and considers value is never just a product. It is always a utility, that is, what a product or service does for him.

4. What the Nonprofits are Teaching Business

5. Social Impacts and Social Problems

6. Management's New Paradigms

7. The Information Executives Need Today

8. Management by Objectives and Self-Control

9. Picking People--The Basic Rules

10. The Entrepreneurial Business

11. The New Venture

12. Entrepreneurial Strategies

II. The Individual

13. Effectiveness must be Learned

14. Focus on Contribution

15. Know Your Strengths and Values

16. Know Your Time

17. Effective Decisions

18. Functioning Communications

19. Leadership as Work

20. Principles of Innovation

21. The Second Half of Your Life

We live longer, we generally maximize our careers out somewhere after 20-25 years of work. Second careers are becoming much more commonplace.

Three ways to develop a second career:
* Actually start one. Just go do it.
* Develop a parallel career. Start doing the second thing while still doing the first thing, "on the side".
* Social entrepreneurs. These people love their work, but it no longer challenges them. In many cases they keep on doing what they have been doing all along but spend less and less of their time on it; they often start another activity, usually a nonprofit.

There is one prerequisite for managing the second half of your life: you must begin long before you enter it.

There is another reason to develop a second interest, and to develop it early: No one can expect to live very long without experiencing a serious setback in his/her life or work. At such times, a second major interest--not just a hobby--may make all the difference.

22. The Educated Person

III. Society

23. A Centural of Social Transformation--Emergence of Knowledge Society

24. The Coming of Entrepreneurial Society

25. Citizenship through the Social Sector

26. From Analysis to Perception--The New Worldview

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Last modified 06 April 2022