Peter F. Drucker symposia continuing question-and-answer session on Japanese versus American companies competing globally, populism and the future of the financial services sector, compensation rates in the workplace, centralization versus decentralization, and quality in business production
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Peter F. Drucker continuing question-and-answer session on the globalization of business, the future of the financial services industry, and general management. Drucker first receives a question concerning Japanese versus American industrial competitiveness, and his supposed championing of the Japanese. He responds that he has not recently championed the Japanese, but did so around 1959 or 1960. He goes on to argue that in the last few years, the competitive position of the American industry has changed dramatically because the U.S. has learned a lot and changed with the times. The Japanese, on the other hand, have fallen behind because they suffer from arrogance, which, Drucker says, afflicted America fifteen years ago. The Japanese, he says, are still putting on and training blue collar workers for the exports that no longer exist--they are at the beginning of reconstruction, whereas Americans are, in most industries, much farther along. Alex D’Arbeloff comments that Americans have a long-term advantage in that, as the new Japanese generation comes in based on wealthy atmosphere and they have to adapt to new economic realities, they will have a big shock on how to handle the new reality. Drucker notes that the best, young Japanese workers are rebellious--they want to be paid for their services based on merit and not seniority, and want to move and leave as they see fit. The panelists then take another question on how to compete globally in a company that does not contain elements of true global thinking or intercultural competence in top management. Drucker responds that the employee should question why he or she works for the company. They move on to discuss a question on financial services competition and its state now and into the future. Drucker states that everyone is going to compete on everyone else’s turf by “putting a different label on the same bottle.” A question is then posed concerning Drucker’s prediction that the financial industry will be the target of the emerging populism movement in the U.S., asking what specific parts of the financial industry will be the targets of the emerging populism. Drucker responds that for the public, in general, there will be no distinction--the public sees financial services as all the same. D’Arbeloff is then given a question concerning why chief executives are paid more than entry-level workers in an organization. He replies that two issues--external competition for the people, and internal equity--are the way he runs his company, and that pay ought to follow a simple plan. He goes on to contend that successful executives of companies that bring in money, stock options, etc., ought to permit some sort of pecking order, because if the top person does not make the most money, then he or she is not worth it. Drucker then responds that there are other ways of compensating people beyond money, and, if the gap between the highest-paid and lowest-paid is too great, an organization creates invidious class and caste distinctions, rather than a team. Drucker then takes a question concerning trends in centralization and decentralization, advising the audience to forget such trends as there are some things that will benefit from centralization and some things that are best left decentralized. Decisions must be made that are contingency-directed rather than theory-directed. D’Arbeloff then responds to commentary on businesses being obsessed with scores but ignoring the “game” of making good products at low cost. Without deadlines nothing gets done, and d’Arbeloff feels people are better today than they were five or six years ago in getting things done. Drucker adds that the assumption of quality sliding because of profitability is a misunderstanding. Quality slides, on the contrary, because people become complacent. Good quality is hard work, and quite cheap, he concludes.
Drucker, Peter F. (Peter Ferdinand), 1909-2005 New York University New York University. Graduate School of Business Administration Japanese Japan--Economic policy Blue collar workers Management Management by objectives Populism Pay equity Decentralization in management Quality and reliability Symposia Arrogance Management incompetency Centralization in management Complacency
Original recording, April 13, 1988; Drucker Archives; Box 68