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Drucker continues his question-and-answer session with a discussion of antitrust laws, and how they are infallible in the wrong timing. He proceeds to claim that antitrust suits are a good reason for buying company stocks and defends his statement using the telephone company, which speeded up the antitrust lawsuits tremendously. They then discuss what is needed in innovating products, services, or approaches to markets which tend to cut across the organization lines of existing strategic business units. William Guth states that strategic business units should be restructured so that one does not have the crossing of lines, while Drucker counters that reorganization should only occur when one has to. Drucker states that one should accept that operating people are not going to innovate; instead, they are going to modify for a variety of reasons. He then suggests that one can never reorganize a business unit, and that no genuinely new product or process has ever found its market where the originators thought it would be--new products create their own market. When this happens, the new market should not be defined because it closes the window to the future. Drucker believes that one cannot innovate and run an existing system as the two endeavors require different things to be successful, including different people and different temperaments. Guth then discusses how one gets management development activities that cut across different strategic business units, and states that there is no way--that he knows of--to do that well. He proceeds to state that there has been less restructuring around strategic management perspectives in large business organizations. Drucker then considers whether there might be some factors that limit growth as an objective as part of one’s strategy, and if so, when and why. He responds that growth is not always desirable, and that one has to distinguish between healthy growth--that results in increased productivity--and “fats” and “cancer” growths that are detrimental to an organization. Size, Drucker states, is something that is a strategic management decision, not a natural event. Guth continues on to argue that setting growth as an objective is the wrong philosophical approach. Excess resources from successful businesses should be distributed to shareholders, who will, in turn, find ways of putting such surplus funds back into capital markets; however, this approach, for instance, involves a tax obstacle. He concludes that full utilization of resources, rather than growth, is a desirable and justifiable goal for managers to pursue. Drucker closes with the suggestion that managers should ask the key, simple questions in order to achieve goals, and should not come up with just one strategy for problems--one should have options as one is not in control of the universe. He states that historical analogies are not typically available for this kind of planning, and, echoing Guth’s remarks, that resources must be fully and productively employed to produce results and contributions.
Drucker, Peter F. (Peter Ferdinand), 1909-2005 New York University New York University. Graduate School of Business Administration Zand, Dale E Guth, William D Antitrust law Stock options Innovation Market, culture, and society Markets Management Management by objectives Growth factors Resource focus Resource allocation Shareholders Surplus value Taxation Strategic planning Strategy Strategy & management Reorganization of corporations Management development Resource utilization Symposia
Original recording, April 17, 1979; Drucker Archives; Box 68