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Peter F. Drucker course lecture on entrepreneurship and innovation. Drucker begins the lecture discussing the program’s justification for taking place on weekends, how its principles should be implemented during the work week, and what the course entails. He goes on to use several business cases to explain how an organization might not be running efficiently and smoothly, and how it results in time and money wasted. The best sign that an organization is not running smoothly--that it is degenerative--is spending a bulk of the day in meetings. Ideally, an organization should not require a single meeting--all employees should know what their job is and what the expectations are for their position, and should not have to consult each other. Therefore, social organizations need organs that establish an interchange of information. If it is found that the great majority of people that should be doing work spend the majority of their time in meetings, the organization is degenerative. Drucker goes on to highlight that where an organization puts product development is one of the most controversial--and irresolvable--issues in organizational theory. The matrix organization is what one goes into because they have no choice. If an organization has been outgrown, a crisis develops, whereas nothing happens in a well-managed firm. Cleanliness is also part of a successfully-managed business, in addition to taking care of one’s appearance. Alliances do not work with more than one partner, Drucker states, because, when alliances consist of arrangements with more than one partner, two in such an alliance will always gang up on the third. There is no system in which one can continue to get the same ratio of input to output. The vulnerability in a system must be considered alongside issues of redundancy, and this translates to organizational operation. The secret to keeping a machine running is to run it at the same speed, temperature, and bandwidth. The question in cases is always, what is the situation? Drucker suggests that the class should not become arrogant--because of traditional schooling, they have all been trained not to give answers, so that questions matter. Drucker states that this is inaccurate thinking, as answers really do matter. The right question, Drucker states, can tease out the wrong answer, but if one has the right answer to the wrong question, one is stuck with it. Above all, the students should use case studies in order to think through alternatives. In real-world situations, one must not be afraid of conflict; instead, one must use dissent constructively as a means to understand problems. Management has an engineering root and a psychological root. Engineers normally start out on a quest for the one right answer, while psychologists always talk about adjustment, and conflict, to psychologists, is a sign of maladjustment. Drucker highlights the idea that when two people disagree, one does not say who is right and/or what is right. Instead, one should say that there is a presumption that they disagree because they give the right answer to different questions--this may be a difference in priorities, or a tactical decision, but to recognize this is to engage in conflict resolution. Drucker recommends that students do not argue with a case--a case must be taken at face value. The people to listen to, Drucker states, are the people one does not agree with. Shifting topics to opportunity cost, within time, all costs are fixed, and the only way one can ever benefit is by getting more yield out of a given time unit. The first question in market segmentation is, to whom does an organization sell? Market segmentation is basically an attempt to fit in with the way the customer wants to shop and how he wants to shop. Drucker uses the example of department stores to highlight how product layouts and floor plans differ based on differing gender habits, as well as ethnic culture, and says this is a form of primitive market segmentation. Market segmentation must be based on clear principles, he says, and it may be based on age, lifestyle, etc. Drucker then highlights how one of the problems in microeconomics is that the only thing that can be quantified is price; however, according to Drucker, price is very rarely a motivation for buying. Often, price is a constraint rather than a motivation in an affluent society.
Drucker, Peter F. (Peter Ferdinand), 1909-2005 New York University Entrepreneurship Innovation Case studies Business Business students Degeneration Meetings Matrix organization Cleanliness Alliances Conflicts Conflict management Conflict Resolution Opportunity costs Department stores Gender, society & development Gender, space and society Gender Culture Market segmentation Age distribution (Demography) Age Lifestyle Microeconomics Prices Pricing Price Affluent consumers Implementation Product development Organizational theory and research Affluence Affluent people
Original recording, January 27th, 1990; Drucker Archives; Box 68