Dale Zand begins the session welcoming Peter F. Drucker to New York University and briefly relates the procedure for the talk, in addition to providing a synopsis of Drucker’s career. Drucker begins the talk stating that he is happy to be back at NYU, and how the main objective of the talk series is to make complex topics simple. He goes on to talk about the sustained economic prosperity that has become a part of the contemporary world following the introduction of the Marshall Plan and the end of World War II to the 1970s, and the topic of how one strategically creates opportunities. First, Drucker recommends having the willingness and ability to get out of the things that no longer make sense, or at least cut back on resources that contribute to such things. Market, according to Drucker, is the first thing to decide upon in crafting a strategy. He gives the example of Volkswagen Germany to support his claim concerning the importance of finding one’s market niche, and how even a multinational, multibillion dollar company can be marginal. He recommends shifting a focus to where opportunities are or where they could be created, and how the airlines could represent a growth industry, but are past their peak. He then suggests that people look at their own institutions to determine their strengths and weaknesses, and where the new opportunities are. Drucker goes on to discuss the distinction between optimization and specialization, and that specialization can be an uncertain and economically disadvantageous pursuit in today’s financial world. Drucker cautions that one must either manage risks on the downside (for profit stability) or manage opportunities on the upside (for profit optimization)--one cannot do both successfully in the stock market. He then states that the only kind of diversification that is currently tenable is one that has market unity, because of the pressure of technological change. Drucker states that, in planning for the future, one must think through one’s own growth policy, then at the environment and one’s own strengths, and, last, through the methodology of one’s own business--tactics to carry out fundamental strategies. William Guth discusses how market share is the most important variable in an organization’s management scheme. He goes on to advocate creating business units with identifiable product market relationships, the articulation of high goals by the senior management of an organization, strategic investment processes, and effective strategic planning and decision-making. In particular, Guth supports yielding current earnings and allocating a portion of them to entrepreneurial developments.
Drucker, Peter F. (Peter Ferdinand), 1909-2005 New York University Zand, Dale E Guth, William D Marshall Plan World War II Strategy Strategic alliances (Business) Strategic planning Volkswagen automobiles Volkswagen of America, Inc Airlines Specialization Optimization Uncertainty Diversification in industry Technological innovations Technology Market share Management Management by objectives Decision making Entrepreneurship Airline industry Market unity Strategic management Return on investment Symposia
Source
Original recording, April 17, 1979; Drucker Archives; Box 68
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