One of the most famous lines in all his publications is found in THE PRACTICE OF MANAGEMENT: “There is only one valid definition of the purpose of business: to create a customer. Markets are not created by God, nature, or economic forces, but by businessmen.”
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Brief summary of the book “Administration and the Work of the World”:
Management is not limited to business, it applies to any human endeavor that brings together people with diverse knowledge and skills in an organization. It has had a great impact on man's way of life. It has allowed large numbers of educated people to be employed in the production process. Advanced knowledge is always highly specialized and produces nothing by itself, but management allows these tasks to be integrated toward a common good. Management has transformed knowledge from being a social ornament and a luxury into the true capital of every economy, the center of capitalist investment.
Management evolution began with the command model, which gave rise to departmentalization by function and training (which eliminated the previous need for hundreds of years to develop a tradition of labor and experience in manual and organizational skills). In the 1920s and 1930s, decentralization appeared, which combines the advantages of large and small within a single company . Then it was discovered that the assembly line sacrificed the long term in the name of the short term, giving rise to the line of thought that made automation the way to organize the manufacturing process. Thus, Theory Y, teamwork, quality circles, and information-based organization emerged as a way to manage human resources. These managerial innovations represent the application of knowledge to work, the substitution of improvisation and brute force by system and information.
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Management knowledge is incomplete, and its very success makes that knowledge obsolete by accelerating the shift from manual to knowledge work within organizations.
In the past, world economic prominence was based on leadership in technological innovations, but Japan's emergence as a great economic power in this century was not due to technological leadership, but to leadership in management, which could be called "social technology." Japan understood that the economic landscape had changed. The mechanical model of organization and technology that emerged at the end of the 17th century with the steam engine had died in 1945 with the atomic bomb, giving way to a biological model: interdependent, knowledge-intensive, and organized by the flow of information.
Education is the greatest managerial challenge for developing countries, since the triad countries (Europe-USA-Japan) are essentially self-sufficient except for oil. Because of advanced automation technology, and mainly because of the demand for skilled people in all areas of management, development requires a knowledge base that few underdeveloped countries have or can afford. How to rapidly create an adequate managerial knowledge base is the vital question for current economic development, and as yet it has no solution.
Today's management challenges include finding structures that work for information-based organizations; ways to increase the productivity of knowledge workers; techniques for managing existing businesses while simultaneously developing very different new ones; ways to create and manage truly global businesses; and more.
The most important problems of management in developed countries are those related to “pension fund socialism”. This refers to the fact that wage earners are now the main providers of capital in developed economies, since they receive around 90% of GDP. Countries require enormous amounts of capital to maintain and create new industries, and the rich can no longer afford to supply it. Workers have become “capitalists” and owners of the means of production. Modern society requires an identity of interests between the company and the employee, but it also requires management to be autonomous from employees or owners.
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Workers' ownership of the means of production is healthy and inevitable. Power follows ownership, and employees have ownership, so power must come with it. However, pension fund socialism maintains the autonomy and responsibility of enterprise and administration, the freedom of the market, competition and the ability to change and innovate. It is a socialism that is not yet fully functional.
Modern enterprise , especially very large ones, can perform its economic task (including making profits for shareholders) only if it is managed for the long term. Too much in society depends on the economic future of enterprises for it to be completely subordinated to the interests of any group, even the shareholders.
The issue for pension fund socialism is to make the interests of shareholders compatible with the needs of the economy and society. Management must be held accountable and at the same time allowed to manage for the long term.
Management is a few essential principles:
Management deals with human beings. Its task is to integrate p chile phone number list eople so that they can function together, making their strengths effective and their weaknesses ineffective. The ability to contribute to society depends as much on the management of the companies in which the individual works as on his or her own efforts, skills and dedication.
Because management seeks to integrate people into a common enterprise, it has deep roots in culture. What managers do anywhere in the world is exactly the same, itvaries. One of the basic challenges facing managers in a developed country is to find and identify those parts of culture, history and tradition that can be used in their own cultural domain.
Management's job is to think through, set and exemplify objectives, values and goals. Every company requires simple, clear and unifying objectives. Its mission must offer a common vision. Goals must be clear, firm and frequently reaffirmed. An organization's culture is the company-wide commitment to certain common goals and values, a commitment that distinguishes the company from the crowd.
Every company is a learning and teaching institution; training and development must be included permanently to adapt as changes occur and take advantage of opportunities.
A company must be built on communication and individual responsibility, since every company is made up of people with different knowledge, skills and goals, who perform different jobs. Each person must think about what he or she owes to others and what he or she needs from them, as well as what is expected of each person.
Performance has to be embedded in the company and its management; it has to be measured (through various evaluation methods) and continuously improved. Market position, innovation, productivity, staff training, quality and financial results are crucial to a company's performance and
