Peter F. Drucker symposia question-and-answer session on business size, leadership innovation, American populism and democratic politics, entrepreneurship, and how bigness in business is a sign of decline
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Peter F. Drucker continues his lecture series on the profound differences between business and bigness, giving the example of GM and its ability to acquire businesses as the exception to his previously stated rule regarding the undesirability of acquisition. Successful existing businesses that innovate successfully also compensate very differently. The business unit, Drucker argues, is an attempt to build a viable, large business that can have all the staff functions necessary, and has a specific technical or market cohesion. He goes on to state that, today, any business of any importance requires leaders to be factors in major markets in every part of the developed world. Drucker ultimately recommends looking at what others are doing, but not copying them. Instead, it is important for organizations to determine what their particular strategy, mission, and temperament are. The symposium is then opened up to people in the audience for their respective questions, and Drucker responds to a question concerning how many Japanese levels of management there are, stating that, fundamentally, the Japanese do not like levels of management. Instead, they like assistants, and the Japanese management structure itself is fairly flat--it depends more on the informal relationship and the line of command, while the Japanese have moved the tribal organization into modern institutions. This is their strength, and also why they find it difficult to work with non-Japanese. Drucker then responds to another question concerning the growth of companies, and whether companies have grown faster than executives’ ability to manage them, stating that institutions have become more complex, and that it is the complexity of the institutions, rather than their size, that has made them difficult to manage. One of the goals, according to Drucker, should concern how to reach a new level of simplicity in organizations. A question is then presented on Drucker’s new populism comments and whether he would like to update his stance. Drucker responds that he wishes to maintain his position, contending that the conservatism, which has come into vogue, is not traditional conservatism but a populist streak. Looking back on the last election, Drucker identifies two important things that warrant attention, namely, the two personages that became non-persons (Jesse Jackson and Michael Dukakis). Drucker states that the Democratic Party will no longer be able to postpone the question of the new coalition it has to forge to have any chance. The attempt of either side to pretend that there is no middle-class in America (Jackson) and the attempt of the middle-class to pretend there are no poor in the nation (Dukakis) is not going to work. Drucker then receives a question on bigness in business, and he clarifies that he is not in favor of bigness for the sake of bigness. For Drucker, industries in decline tend to go in for bigness, and merger waves in industry is not a sign of health--on the contrary, it is a sign that an industry is in some trouble. As for European firms, Drucker argues that the Europeans have been powerfully stimulated by changes in America and are thinking very effectively about the size of their organizations, emphasizing that, for European companies, creating enough flexibility in smallness and partnerships should be their end goal.
Drucker, Peter F. (Peter Ferdinand), 1909-2005 New York University New York University. Graduate School of Business Administration General Motors General Motors automobiles General Motors Company General Motors Corporation Acquisition Strategic planning Strategy Strategy & management Business planning Mission statements Populism Populism--United States Populism--United States--History Conservatism Liberalism Jackson, Jesse, 1941- Dukakis, Michael S. (Michael Stanley), 1933- Democratic Party Merger Europe Symposia Simplicity in organizations
Original recording, April 12, 1989; Drucker Archives; Box 68