All rights are retained by The Drucker Institute. For permission to use this item, contact The Drucker Institute, https://www.drucker.institute/about/drucker-archives/
During Peter Drucker’s lecture regarding new demands on the executive he begins by discussing the company Rainbird and its basic assumptions that the state of California is a desert populated with residents who desire to maintain a high pattern of settlement similar to that of the Northeast. He then discusses the unique land settlement patterns in America versus abroad. He also explains the creation of the first suburb in Montclair, New Jersey and the emergence of the suburb, which was brought about by the development of the railroad. Drucker then shares the history of the settlement of California by Americans and the struggles the settlers faced with developing a sustainable supply of water. Later Drucker explains that a business should not have any more then two or three basic assumptions because then it would be unmanageable. However, as long as these basic assumptions are valid then the business is valid and can survive several mistakes. Later Drucker discusses General Motors and how in 1928 they asked themselves the question: “What determines automobile demand?” The answer to the question was multi-faceted and involved the number of people reaching the age of driver license eligibility, the gap between used car sales and new sales, and the average amount of time a person waits before they trade in their car.