Peter Ferdinand Drucker is an outstanding American economist and publicist of Austrian origin, a leading theorist in the field of management of the last century and a wonderful professor. In his book, he outlined the challenges that he believes managers will face in this century. Five chapters of this voluminous work are devoted to various problems of organizations, and the final sixth chapter is devoted to the role of management in the life of modern society. Amazing structure, clear examples. This is a beloved book by our entire editorial team.
Management and reality
Throughout the entire book, in plain text and between the lines, one can read the author’s admonition about the connection with reality: you should not rely on archaic foundations – look into the future, explore the objective world, and keep up with the times in matters of management.
Professor Drucker draws the reader’s attention to the fact that “management” and “business management” are not the same thing. This is logical and seems intuitive to everyone, but we should not forget that the author himself was at the origins of modern views on management. In addition, he saw a technological breakthrough at the turn of the century and echoes of previous industrial revolutions. Let us recall that Drucker was born in 1909 in the capital of the Austro-Hungarian Empire, and died in 2005 in California. His time was filled with many trials. And he knew in practice what incompetent management leads to. And not only in business.
“…The idea that management is business management still exists. Therefore, it is important to declare, as loudly as possible, that management is not business management in the same way that, say, medicine is not obstetrics,” Drucker explains with examples.
The two main approaches to management with obvious differences according to Drucker are the theses:
– There is one correct organizational structure and one correct way to manage personnel;
— There is no single correct organizational structure. There are different structures that can (and should) be used for specific results.
As you might guess, the entire book is devoted to arguing for the second approach. “It became obvious that the organizational structure is not an end in itself. This is a tool with which you can increase the productivity of collaborative work among employees. In this capacity, any organizational structure is suitable for solving certain problems in certain conditions and at certain times,” writes Peter Drucker.
And despite the necessary subtleties and differences in the management of companies, there is still something fundamental and common. Open notebooks and write.
90% of enterprise problems are the same
“The heads of all organizations devote approximately the same amount of time to solving the personal problems of their employees, and the personal problems of employees of different organizations also differ little. Generally speaking, about 90 percent of all organizational problems are the same. <...> In every organization – no matter whether commercial or non-profit – management only in these 10 percent reflects the specifics of the organization’s mission, its special culture, history and terminology,” writes the professor, making it easier for everyone to understand management secrets.
Principles of organizations
Again, with all the diversity of tasks, the principles of organizations are also the same. This:
— transparency (employees must understand where they work),
— the presence of a manager who makes final decisions in the area of his responsibilities, and a person who takes leadership in crisis situations,
– Every worker should have only one boss.
To these principles, Peter Drucker adds: “The number of layers should be minimal—in other words, the organization should be as “flat” as possible, if only because, according to information theory, “each additional link doubles the interference and halves the value of the message.” Perhaps everyone should know about this well-known secret of information theory.
The employee’s place in the organization system
According to Drucker’s theory, each specialist should have the opportunity to work simultaneously in several structures of the organization. For example, so that he performs some of his responsibilities as part of a team, and a number of others as part of the governing body. For this, it is important for the employee to be part of something larger: an association, a trade union. All these are tools that a competent manager should use.
What is it for
Business management is about results outside the organization, efficiency inside and… innovation. The world is changing – needs are changing. Behind them are products. This is how humanity has come to the point where intellectual labor has become the main resource for companies.
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