Price:
$13.00
Binding: Paperback
ISBN: 0887306144
256 pages
Description:
The effective
business, Peter Drucker observes, focuses on opportunities
rather than problems. How this focus is achieved in order
to make the organization prosper and grow is the subject of
this companion to his classic, The Practice of Management.
The earlier book was chiefly concerned with how management
functions; this volume shows what the executive decision-maker
must do to move his enterprise forward.
One of
the notable accomplishments of this book is its combining
specific economic analysis with a grasp of the entrepreneurial
force in business prosperity. For though it discusses "what
to do" more than Drucker's previous works, the book stresses
the qualitative aspect of enterprise: every successful business
requires a goal and spirit all its own. Peter Drucker again
employs his particular genius for breaking through conventional
outlooks and opening up new perspectives--for profits and
growth.
Excerpt:
Business
Realities
That executives
give neither sufficient time nor sufficient thought to the
future is a universal complaint. Every executive voices it
when he talks about his own working day and when he talks
or writes to his associates. It is a recurrent theme in the
articles and in the books on management.
It is
a valid complaint. Executives should spend more time and thought
on the future of their business. They also should spend more
time and thought on a good many other things, their social
and community responsibilities for instance. Both they and
their businesses pay a stiff penalty for these neglects. And
yet, to complain that executives spend so little time on the
work of tomorrow is futile. The neglect of the future is only
a symptom; the executive slights tomorrow because he cannot
get ahead of today. That too is a symptom. The real disease
is the absence of any foundation of knowledge and system for
tackling the economic tasks in business.
Today's
job takes all the executive's time, as a rule; yet it is seldom
done well. Few managers are greatly impressed with their own
performance in the immediate tasks. They feel themselves caught
in a "rat race," and managed by whatever the mailboy dumps
into their "in" tray. They know that crash programs which
attempt to "solve" this or that particular "urgent" problem
rarely achieve right and lasting results. And yet, they rush
from one crash program to the next. Worse still, they known
that the same problems recur again and again, no matter how
many times they are "solved."
Before
an executive can think of tackling the future, he must be
able therefore to dispose of the challenges of today in less
time and with greater impact and permanence. For this he needs
a systematic approach to today's job.
There
are three different dimensions to the economic task: (1)The
present business must be made effective; (2) its potential
must be identified and realized; (3) it must be made into
a different business for a different future. Each task requires
a distinct approach. Each asks different questions. Each comes
out with different conclusions. Yet they are inseparable.
All three have to be done at the same time: today. All three
have to be carried out with the same organization, the same
resources of men, knowledge, and money, and in the same entrepreneurial
process. The future is not going to be made tomorrow; it is
being made today, and largely by the decisions and actions
taken with respect to the tasks of today. Conversely, what
is being done to bring about the future directly affects the
present. The tasks overlap. They require one unified strategy.
Otherwise, they cannot really get done at all.
To tackle
any one of these jobs, let alone all three together, requires
an understanding of the true realities of the business as
an economic system, of its capacity for economic performance,
and of the relationship between available resources and possible
results. Otherwise, there is no alternative to the "rat race."
This understanding never comes ready-made; it has to be developed
separately for each business. Yet the assumptions and expectations
that underlie it are largely common. Businesses are different,
but business is much the same, regardless of size and structure,
of products, technology and markets, of culture and managerial
competence. There is a common business reality.
There
are actually two sets of generalizations that apply to most
businesses most of the time: one with respect to the results
and resources of a business, one with respect to its efforts.
Together they lead to a number of conclusions regarding the
nature and direction of the entrepreneurial job.
Most of
these assumptions will sound plausible, perhaps even familiar
, to most businessmen, but few businessmen ever pun them together
into a coherent whole. Few draw action conclusions from them,
no matter how much each individual statement agrees with their
experience and knowledge. As a result, few executives base
their actions on these, their own assumptions and expectations.
1. Neither
results nor resources exist inside the business. Both
exist outside. There are no profit centers within the business;
there are only cost centers. The only thing one can say with
certainty about any business activity, whether engineering
or selling, manufacturing or accounting, is that it consumes
efforts and thereby incurs costs. Whether it contributes to
results remains to be seen.
Results
depend not on anybody within the business nor on anything
within the control of the business. They depend on somebody
outside--the customer in a market economy, the political authorities
in a controlled economy. It is always somebody outside who
decides whether the efforts of a business become economic
results or whether they become so much waste and scrap.
The same
is true of the one and only distinct resource of any business:
knowledge. Other resources, money or physical equipment, for
instance, do not confer any distinction. What does make a
business distinct and what is its peculiar resource is its
ability to use knowledge of all kinds--from scientific and
technical knowledge to social, economic, and managerial knowledge.
It is only in respect to knowledge that a business can be
distinct, can therefore produce something that has a value
in the market place.
Yet knowledge
is not a business resource. It is a universal social resource.
It cannot be kept a secret for any length of time. "What one
man has done, another man can always do again" is old and
profound wisdom. The one decisive resource of business, therefore,
is as much outside of the business as are business results.
Indeed,
business can be defined as a process that converts an outside
resource, namely knowledge, into outside results, namely economic
values.
2. Results
are obtained by exploiting opportunities, not by solving problems.
All one can hope to get by solving a problem is to restore
normality. All one can hope, at best, is to eliminate a restriction
on the capacity of the business to obtain results. The results
themselves must come from the exploitation of opportunities.
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