The lecture begins talking about control and management practices in the case of a community hospital, owned by a membership corporation, which means that the members elect the board and the board appoints the members. Drucker notes that the only way to measure a hospital’s results is by assessing how well they perform the services they offer. They proceed to discuss what a doctor considers a well-managed hospital in America, and what the legal accusation of malpractice entails. In hospital functions, the question is whether or not there is good procedure/behavior--the emphasis is not on results. A hospital can do damage, but it cannot have results, as the outcome is irrelevant. The hospital is a competitive institution in the U.S., Drucker notes, whereas in most of the world it is not. This is because the American hospital came in with population, while the European hospital came in after population, so settlement was largely finished. Also, European hospitals were largely governmental institutions, and part of a local government system. Because hospitals provide a service, what kinds of medical care they provide is determined by the individual physicians. He then states that the major organization today that is mainly procedurally focused, and not results focused, is the Occupational Safety and Health Administration, or OSHA. They then move to the subject of alcoholism and what the safest production facility is, Drucker identifying it as the atomic submarine. He goes on to state that incentives should be used to encourage routine behavior, not discipline, and that good manners are proprietary and the lubricant of human operations. Procedures, proprieties, and protocols are all defensive--their presence does not produce results, but their absence produces damages. The class proceeds to talk about missionary activity, and how human behavior has not changed through the centuries. For the moralist, the absence of results only proves how strong the forces of evil are because he or she starts out with absolutes. Drucker goes on to state that healthcare is not a major concern for the poor because the recipient is incompetent, and that it is a more important concern to those needing healthcare the most, namely, the elderly. He then contends that there is no objective measurement for absolute values, and that there is no evidence for moral absolutes. Drucker then states that every business has two customers, and that A&P is the classic example of grocery store liquidation. Quality, according to Drucker, cannot be totally lacking in grocery chain competitiveness, or any other business sector. He additionally comments that the housewife, the primary consumer, has to be satisfied in order for the grocery chain to be competitive. What the housewife and the grocer consider value, however, is totally different.
Drucker, Peter F. (Peter Ferdinand), 1909-2005 Claremont Graduate University Claremont Graduate School Claremont Graduate University-Faculty Claremont University Center Membership Malpractice Hospitals Hospitals-Administration Physicians Physician and patient Local government Alcoholism Manners & customs Human behavior Poor A&P (Firm) Grocery stores Grocery trade Grocer Groceries Housewives Value Value analysis (Cost control) Management Management by objectives Hospital shared services OSHA Moral absolutism Great Atlantic and Pacific Tea Company
Source
Original recording, 1978; Drucker Archives; Box 68
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