Drucker begins the lecture discussing a case study concerning Bank of America, and the organization issues surrounding Chrysler Automobiles and Sears. They proceed to specifically talk about why banks cannot serve other banks, and the importance of good manners in business dealings, while considering the proper protocol for businesses dealing with direct competitors. The class then reflects on the ownership principle and the alternatives available, which include optimizing their data processing as a business and equalizing price and cost advantages. Drucker contends that treating customers differentially is justified in business decisions, and argues that introductory prices to target customer bases is justified and not discriminatory as long as there is a cost, innovation, or competitive rationale. He then contends that banks deal with data, not with money, and that banks are one of the few institutions good at data processing, before providing an anecdote about European oceans to describe how the invention of springs for carriages revolutionized land transportation. Drucker compares this invention of springs to banks’ invention of credit such that they didn’t have to move cash any longer, and how this is a facet of data processing. Drucker then talks about the history of the word, data, and how interpreting data has been the most important function of banks. He then contends that, in a diagnostic discipline, one does not look things up in a book first, but looks at the symptoms, and that management is a diagnostic discipline because every business and situation is different. Drucker goes on to state that one should not give up the diagnostic until one has three alternatives.
Drucker, Peter F. (Peter Ferdinand), 1909-2005 Claremont Graduate University Claremont Graduate School Claremont Graduate University-Faculty Claremont University Center Bank of America Chrysler automobile - History Chrysler automobile Chrysler Corporation Sears, Roebuck and Company Banks and banking Manners and customs Data processing Springs Carriages and carts Credit Management Management by objectives Data Diagnostics
Source
Original recording, February 14, 1978; Drucker Archives; Box 68
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