Peter F. Drucker symposia and question and answer session on personnel management, strategic planning and strategic business units, codetermination and unions, future managerial development, and economics now and in the future
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Drucker continues the question and answer portion of the symposia discussing how the personnel function will become a line function, rather than a staff function. Hawkins begins his discussion agreeing with Drucker that the most effective personnel manager is one that has come from operations. They move on to discuss where the locus of strategic management and planning should be located in an organization, with Drucker stating that historically, the focus has been on doing what we already do, which may no longer work. Abandoning yesterday is part of planning for the future, and thinking about the future is best done with one person contemplating in solitude--it is not done best at a management conference. Hawkins agrees with Drucker and adds that perspective is needed that exceeds that of a divisional manager. Drucker and Hawkins then consider what should be done when a chief executive officer (CEO) will not set strategic goals and the Board will not act, with both advising that the job and organization should be abandoned, before moving on to consider whether organizing companies into strategic business units (SBUs) is likely to be effective. Hawkins responds that it depends a great deal on the nature of the business and the organization, while Drucker asserts that SBUs were an attempt to create a locus for the fundamental thinking, planning, and management that would reduce the number of units to get to the manager without providing multiple levels of command/bureaucracy between the chief executive and where the business activity is occurring. Drucker continues on to emphasize that he judges organizations by three criteria; first, length and frequency of executive meetings (the fewer, the better and more efficient the organization); second, whether the secretary always knows where everyone is in an organization’s management; and, third, how many people sit in an anteroom with Drucker during meetings with the organization president--if it’s more than three then too many are reporting to him/her. Both Drucker and Hawkins move on to consider the potential utility or value of foreign management practices and styles in the U.S. Drucker contends that codetermination is the last desperate attempt of a dying union movement to cement itself in a power structure. Labor unions are institutions whose time has passed, and labor unions, today, are not feasible. The unions are headed by the undesirables, according to Drucker, and the moment a union leader is in management, he can either do nothing or do harm, since he can no longer represent. The question then becomes one of ownership, and how the new ownership can be built into the decision-making structure. If power follows property, and property is in the hands of the employees, then power has to shift to where the property is, and revolution must eventually occur. Hawkins adds that unions do not, in most cases, have different goals from management in Germany. However, in other professional sectors in Europe, where union representation is professional as opposed to worker representation, great difficulty and gross inefficiencies arise. As for the U.S., Hawkins questions whether the present union leadership has real interest in codetermination. The essence of the Japanese style of decision making, Drucker states, is the imitation of IBM. Therefore, Japanese traditions are not very old at all and based on American models of enterprise. Drucker then comments that there is no country with a worst tradition of labor relations than Japan. A question is then posed regarding a role for the Machiavellian manager in today’s modern organization, and Drucker responds that he does not know what the Machiavellian style is. He states that if such a manager is someone who thinks before he/she acts, then yes; however, if it means manager rule by fear, Drucker states that that is not a suitable quality to have. Hawkins adds that whatever style one follows, one should just stick with it and not be guided by trends. They then consider if government is going to go away, and Drucker states that government will always be present and will more than likely become stronger and larger. Hawker stresses that developing interpersonal competency is necessary for future business leaders heading into the twenty-first century, while Drucker states that the present business school’s weakest point, production management, will become a tremendous defect in business education. He proceeds to argue that the manager of tomorrow must determine where he/she belongs, encourages executives to build prowess in production management because it will be badly needed, pushes people to learn how politicians behave like politicians, what that means, and how other groups of people see the world, and, last, learn to ask questions about one’s status, how to obtain feedback, and how to measure one’s self. The symposia proceeds to consider the future of economics, and Drucker begins by first introducing NYU business school dean Joseph H. Taggart. He proceeds to begin discussing the present Reagan administration and why people think it makes so much of a difference. Drucker then develops the distinction between Reagan’s and Carter’s economic policies, and argues that, despite supply-side economics, most people realize they have lost a working economic theory. He then identifies three things in Keynesian economics, the discredited theory being the macroeconomic model. The difference, Drucker says, between Keynes and Friedman is a minor one--Keynes stresses interest rates, while Friedman stresses money supply. Drucker says that one can learn tools, but one cannot learn basic concepts, and what is needed is an economics that integrates the real economy and the money economy. Economics assumes the national state to be the local economics, and Drucker states that there is no way of integrating the world economy. The two economies which have been most traditional to Keynesian economics--the U.S. and Great Britain--have done the worst. Moreover, the companies that have disregarded both the U.S. and Great Britain have done the best. Drucker also declares that tomorrow’s economics will have to integrate today and tomorrow. The sooner people stop talking profit and stop talking costs of tomorrow, the sooner there will be an understanding of his outlined economic dynamics. Supply and demand could then be integrated in a meaningful relationship, in which both are dependent variables. He concludes that basic economic policy can only be made by looking at what happens when we do something, and, when it does not work, to try something else.
Drucker, Peter F. (Peter Ferdinand), 1909-2005 New York University New York University. Graduate School of Business Administration Personnel management Strategic planning Strategy & management Meetings Secretaries IBM computers Japan Business Japan Machiavellianism (Psychology) Interpersonal relations Production management Business education Politicians Evaluation Economic development Economic history Economic Theory Economics Economists Economy and society Taggart, Joseph H Reagan, Ronald Carter, Jimmy, 1924- Supply-side economics Keynesian economics Keynes, John Maynard, 1883-1946 Macroeconomics Friedman, Milton, 1912-2006 Interest rates Money United States United Kingdom Supply and demand Economic policy Symposia Strategic business units (SBUs) Management styles Codetermination, Worker Reaganomics Friedmanomics World economy
Original recording, April 22, 1981; Drucker Archives; Box 68