Management: Tasks, Responsibilities, Practices (by Peter Drucker)

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Management: Tasks, Responsibilities, Practices by (Peter Drucker)

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Preface: The Alternative to Tyranny

The role of management in keeping society free

It is fashionable today to talk of a revolt against authority and to proclaim that everybody should "do his own thing." This, then, I have to admit, is a most unfashionable book. It does not talk about rights. It stresses responsibility. Its focus is not on doing one's own thing but on performance.

Our society has become, within an incredibly short fifty years, a society of institutions. It has become a pluralist society in which every major social task has been entrusted to large organizations—from producing economic goods and services to health care, from social security and welfare to education, from the search for new knowledge to the protection of the natural environment.

It is understandable that the sudden realization of this change in the crystal structure of society has evoked an angry response, "Down with organization!" But it is the wrong response. The alternative to autonomous institutions that function and perform is not freedom. It is totalitarian tyranny.

Our society is neither willing nor able to do without the services that only the institutions can provide. And the most vocal among our modern Luddites, the would-be institution wreckers, the highly educated young people, are even less able to do without the large organizations than the rest of us. For it is only in the large organizations that there exist plentiful opportunities to make a living through knowledge, to make a contribution through knowledge, and to achieve through knowledge.

If the institutions of our pluralist society of institutions do not perform in responsible autonomy, we will not have individualism and a society in which there is a chance for people to fulfill themselves. We will instead impose on ourselves complete regimentation in which no one will be allowed autonomy. We will have Stalinism rather than participatory democracy, let alone the joyful spontaneity of doing one's own thing. Tyranny is the only alternative to strong, performing autonomous institutions. Tyranny substitutes one absolute boss for the pluralism of competing institutions. It substitutes terror for responsibility. It does indeed do away with the institutions, but only by submerging all of them in the one all-embracing bureaucracy of the apparat. It does produce goods and services, though only fitfully, wastefully, at a low level, and at an enormous cost in suffering, humiliation, and frustration. To make our institutions perform responsibly, autonomously, and on a high level of achievement is thus the only safeguard of freedom and dignity in the pluralist society of institutions.

But it is managers and management that make institutions perform. Performing, responsible management is the alternative to tyranny and our only protection against it.

About this book—its aim, its approach and content

Management is work, and as such it has its own skills, its own tools, its own techniques. A good many skills, tools, and techniques ate discussed in this book, a few in some detail. But the stress is not on skills, tools, and techniques. It is not even on the work of management. It is on the tasks.

For management is the organ, the life-giving, acting, dynamic organ of the institution it manages. Without the institution, e.g., the business enterprise, there would be no management. But without management there would also be only a mob rather than an institution. The insti:ution, in turn, is itself an organ of society and exists only to contribute a needed result to society, the economy, and the individual. Organs, however, are never defined by what they do, let alone by how they do it. They are defined by their contribution.

Most books on management are books on the work of management. They look at management from the inside. This book starts with the tasks. It looks at management first from the outside and studies the dimensions of the tasks and the requirements in respect to each of them (Part One). Only then (in Part Two) does it turn to the work of the organization and the skills of management, and (in Part Three) to top management, its tasks, its structures, and its strategies.

I myself have for many years been deeply interested in the management sciences, that is, in the manager's logical and analytical tools. But there are no equations in this book, no graphs, no mathematical formulas, not even a table. The stress throughout the book is not on how to do, let alone on how to make the tools to do it. Even when discussing skills, even when discussing the management sciences themselves, the stress is on accomplishments and results. This book is task-focused throughout.

This book is also manager-focused. The starting point was the question, What does the manager have to know, or at least to understand, to be equal to his task?

The many, many books on management are skill-focused, disciplinefocused, or functionfocused. They deal with one aspect of a manager's task. They may deal with managing a business or a hospital or with managing people, with tools, e.g., controls, or with specific problems. They deal with the author's particular area of concern or expertise, rather than with the tasks of the manager.

This book was designed to be different. It was designed to take as starting point and as principle that informs the entire work the manager's needs rather than the author's own knowledge or special areas of interest. This explains what is included and what is left out.

This is a long book—though I dislike long books. And yet it is not a comprehensive book, but highly selective. A good many readers, I am sure, will complain that this or that important topic is not even mentioned; many more will undoubtedly criticize the author's decision to stress one topic while playing down another.

Undoubtedly the author's own judgment and his own preferences played a part. But I have at least tried to decide what belongs in this book and how much importance to give to it by an objective set of criteria, developed as the result of years of working closely with managers on all levels, with managers in large and small businesses, and with managers in business and in nonbusiness service institutions. What every manager needs to know has been included in this book. What not every manager needs to know, however important or interesting, has been excluded, or at least given only cursory treatment. This explains why such topics as "Managing Money in the Business" or "From Selling to Marketing"—to name two chapters I had in my first draft—are not to be found in the book, or why, to give another example, the management sciences are treated in one short chapter only. It explains, however, why a good deal of space has been devoted to top management and to the relationships between structure and strategytopics that are not commonly considered in a book on management.

It was not my intention to include every problem any manager might conceivably have to face. But it was my intention to include those areas of concern with which all managers can expect to deal and in which all managers have to be literate regardless of their functional background, the mission and purpose of their institution, or the size of their organization. And this, then, meant a big book, since the manager's job is big, and the management tasks demanding.

Management, the book maintains throughout, is a discipline, or at least is capable of becoming one. It is not just common sense. It is not just codified experience. It is at least potentially an organized body of knowledge. This book tries to present the little we know so far. But it also tries

But the book always tries to integrate man and task. It tries to deal with objective and impersonal tasks but also with the human requirements, skills, and basic attitudes needed to perform these tasks. "Le style c'est l'homme" may apply to a writer. But in other pursuits style tends to be manner rather than substance. There is not much talk of style in this book. But there is stress on character.

In the last analysis management is practice. Its essence is not knowing but doing. Its test is not logic but results. Its only authority is performance. This is therefore not a philosophical book even though it deals with fundamentals. It grew out of practice. And it centers on practice.

"From Management Boom to Management Performance" is the title of the introductory section of this book. It could have been the title of the book itself. In the next decades managers will have to meet far greater performance demands than most of them can envisage, and in all areas. A great deal more will depend on their performance than the prosperity or even the survival of their own company or institution. For, to repeat, performing management of our institutions is the only alternative to tyranny in our pluralistic society of institutions.

And the aim, the motive, and the purpose of this book are to prepare today's and tomorrow's managers for performance.

In its aim, its scope, and its approach this book differs from my earlier management books:

A word might be said about the use of cases and examples in this book.

Wherever a company (or a public-service agency) is identified by name in the book, everything in the example or illustration is taken from published and universally accessible sources, whether the company's own statements and reports or reports on it in the public press. The interpretation in every case is, of course, mine; but the facts are in the public domain. Wherever a company—Or an industry—is not specifically identified by name I have used—always with the company's knowledge and consent—private information, whether obtained in the course of consulting work or, more often, through personal acquaintance, discussions in management meetings and seminars, or private correspondence. In every such case the company (or industry) has been so carefully camouflaged that even people in the company itself will probably not recognize it. The one thing the reader can be sure of if he reads of a "hardware manufacturer in the American Midwest" is that the company is not a hardware manufacturer and is not located in the Midwest. The facts given in the illustration are reported faithfully and accurately; the specific company where they occurred is carefully concealed.

Management

Introduction: From Management Boom To Management Performance

The emergence of management in this century may have been a pivotal event of history. It signaled a major transformation of society into a pluralist society of institutions, of which managements are the effective organs. Management, after more than a century of development as a practice and as a discipline, burst into public consciousness in the management boom that began after World War II and lasted through the 1960s. What has the boom accomplished? What have we learned? And what are the new knowledges we need, the new challenges we face, the new tasks ahead, now that the management boom is over?

The Emergence of Management

The Society of Institutions

From 1900 to 1970

The Employee Society

The Need for New Social and Political Theory

Management: The Organ of Institutions

Responsibility the Essence

From Business Society to Pluralist Society

Why Business Management Has to Be the Focus

Business Management the Exemplar

Business Management the Success Story

The Emergence of Management a Pivotal Event

The Management Boom and Its Lessons

The Management Boom

How the Management Boom Began

Its Spread

Its End

What Have We Learned?

Management a Generic Function

Management a Discipline

But Not "Technocracy"

Management Is Culturally Embedded

Management Is Polycentric

The Changed Management World

The Roots and History of Management

The New Challenges

The Management Boom and Its Conceptual Foundations

The Need for New Knowledge in the Foundation Areas

The Productivity Need

Beyond Decentralization

The Need for a New Model

From Personnel Management to the Leadership of People

The New Demands

The Entrepreneurial Manager

Multi-Institutional Management

Knowledge and Knowledge Worker

Multinational and Multicultural Management

Management and the Quality of Life

Management's New Role

PART ONE: THE TASKS

Management is an organ of an institution; and the institution, whether a business or a public service, is in turn an organ of society, existing to make specific contributions and to discharge specific social functions. Management, therefore, cannot be defined or understood let alone practiced except in terms of its performance dimensions and of the demands of performance on it. The tasks of management are the reason for its existence, the determinants of its work, and the grounds of its authority and legitimacy.

The Dimensions of Management

Management Is an Organ

It Exists Only in Contemplation of Performance

The Three Primary Tasks:

Economic Performance;

Making Work Productive and the Worker Achieving;

Managing Social Impacts and Social Responsibilities

The Time Dimensions

Administration and Entrepreneurship

Efficiency and Effectiveness

Optimization and Innovation

The Specific Work of Management: Managing Managers

Focus on Tasks

Business Performance

We do not yet have a genuine theory of business and no integrated discipline of business management. But we know what a business is and what its key functions are. We understand the functions of profit and the requirements of productivity. Any business needs to think through the question What is our business and what should it be? From the definition of its mission and purpose a business must derive objectives in a number of key areas; it must balance these objectives against each other and against the competing demands of today and tomorrow. It needs to convert objectives into concrete strategies and to concentrate resources on them. Finally, it needs to think through its strategic planning, i.e., the decisions of today that will make the business of tomorrow.

Managing a Business: The Sears Story

There are hundreds, if not thousands, of books on the management of the various functions of a business—production, marketing, finance, engineering, purchasing, personnel, public relations, and so forth. But what it is to manage a business, what management is supposed to do and how it should be doing it, are subjects which are rarely discussed.

This oversight is no accident. It reflects the absence of both a tenable theory of business enterprise and an adequate discipline of management. Therefore, rather than theorizing, we shall first look at the conduct and behavior of an actual business enterprise. There is no better illustration of what a business is and what managing it means than one of America's most successful enterprises: Sears, Roebuck and Company.

What Is a Business and How Is It Managed?

How Sears, Roebuck Became a Business

Rosenwald's Innovations

Inventing the Mail-Order Plant

General Wood and Sears's Second Phase

Merchandise Planning and Manager Development

Sears's Third Phase: From Selling to Buying to Procurement

Class Markets and Mass Markets

The Challenges Ahead

What is a Business

Business Created and Managed by People, Not by Forces

The Fallacy of Profit Maximization

Profit: An Objective Condition of Economic Activity, Not Its Rationale

The Purpose of a Business: To Create a Customer

The Two Entrepreneurial Functions: Marketing and Innovation

The Marketing Revolution in America, Europe, and Japan

Marketing Not a Specialized Activity

IBM as an Example

Consumerism, the "Shame of Marketing"

From Selling to Marketing

The Enterprise as the Organ of Economic Growth and Development

Innovation as an Economic Function

As a Dimension of the Total Business

The Productive Utilization of All Wealth-Producing Resources

What Is Productive Labor?

Knowledge, Time, Product-Mix, Process Mix, and Organization Structure as Factors in Productivity

Making Knowledge Productive

The Functions of Profit

Profit as a Social Responsibility

How Much Profit Is Required?

Business Management a Rational Activity

Business Purpose and Business Mission

The Theory of the Business

The Fallacy of the Unternehmer

Why a Theory of the Business Is Needed

Especially in Today's Knowledge Organization

"What Is Our Business?" Neither Simple nor Obvious

Theodore Vail and the Telephone Company

Top Management's First Responsibility

Failure to Define Business Purpose and Business Mission a Major Cause of Business Frustration and Business Failure

Why "What Is Our Business?" Is So Rarely Asked

The Need for Dissent

The Customer Defines the Business

Who Is Our Customer?

Customer and Consumer

The Carpet-Industry Story

Where Is the Customer?

What Does He Buy?

What Is Value to the Customer?

There Are No Irrational Customers

The Economist's Concept of Value

What Is Price?

When to Ask, "What Is Our Business?"

Most Important: When a Business Is Successful

"What Will Our Business Be?"

The Importance of Population Trends

Changes in Economy, Fashion, and Competition

Anticipating Innovation

The Consumer's Unsatisfied Wants

"What Should Our Business Be?"

The Need for Planned Abandonment

The Power and Purpose of Objectives: The Marks & Spencer Story and Its Lessons

Social Revolution as Business Purpose and Mission

The Concentration Decision

The Objectives: Marketing; Innovation; Key Resources; Productivity, Social Responsibilities

Profit as Result Rather Than as Goal

Converting Objectives into Work Assignments

The Lessons

Specifications for Objectives

Objectives Needed in All Survival Areas

The Eight Areas of Objectives

The Basis for Work and Assignments

Objectives and Measurements

The Use of Objectives

Strategies, Objectives, Priorities, and Work Assignments

The Foundation Areas: Marketing and Innovation

The Concentration Decision

The Market-Standing Decision

Innovation Objectives

Resources, Their Supply, Utilization, and Productivity

Marketing Objectives in the Resources Areas

The Bell System's Capital-Market Planning

Union Relations as an Objectives Area

Productivity: The First Test of Management Competence

The Danger of the Wrong Trade-Offs

Contributed Value as an Indicator of Productivity

The Social Dimension

Profit as a Need and a Limitation

Why Profit Maximization Leads to Inadequate Profitability

What Is the Minimum Profitability Needed?

The Japanese Example

Profitability and the Cost of Capital

How to Compute and Measure ProfitabilityProfitability as a Limitation

Balancing Objectives

The Time Span of Objectives

The Role of Budgeting

Managed and Capital Expenditures

Priorities

From Objectives to Doing

A Note on Inflation

Strategic Planning: The Entrepreneurial Skill

The Surge in Long-Range Planning

The Time Spans of Planning

Strategic Decision-Making Rather Than Long-Range Planning

What Strategic Planning Is Not

Not a Bag of Tricks

Not Forecasting

The Importance of the Unique Event

The Futurity of Present Decisions

Planning Is Purposeful Risk-Taking

What Strategic Planning Is

Sloughing Off Yesterday

What New Things Do We Have to Do When?

Everything Degenerates into Work

People Assignments, the Test of Planning

The Need for Measurement and Feedback

Performance in the Service Institution

The public service institutions government agency and hospital, school and university, armed service and professional associations have been growing much faster than businesses in this century. They are the growth sector of a modern society. And within business, the service staffs have been growing much faster than the operating units. Yet performance has not kept up with growth or importance. What explains the lag in or absence of performance in the service institutions? What is needed to manage service institutions for performance?

The Multi-Institutional Society

Service Institutions Society's Growth Sector

Service Institutions within Business

Society, Including Business, Depends on the Performance of Service Institutions

Are Service Institutions Managed?

Are They Manageable?

Performance and Results the Exceptions in Service Institutions

The Importance of the Exceptions

Making the Service Institution Perform as a Central Managerial Challenge

Why Service Institutions Do Not Perform

The Three Popular Explanations

They Are Not Businesslike

They Need Better Men

Results Are Intangible

All Three Are Alibis Rather Than Explanations

What Makes the Service Institution Different

Misdirection by Budget

What Performance and Results Mean in the Budget-Based Institution or Staff

Earning One's Way versus Deserving It

The Exceptions and Their Lessons

The Exceptions:

Bell Telephone;

the Nineteenth Century American University;

TVA;

Meiji Japan

The Market Approach and "Socialist Competition "

The Limits of the Market

"Public Policy" Is Not Enough

The Special Problem of the Old, Obsolete, and Unproductive

The Danger of Yesterday's Success

Managing Service Institutions for Performance

Principles of Effectiveness in Service Institutions

How to Apply the Principles

The Three Kinds of Service Institutions and Their Specific Needs

Auditing Objectives and Activities for Organized Abandonment

Managing Service Institutions for Performance

Productive Work and Achieving Worker

Making work productive and the worker achieving is the second major dimension of the management task. We know little about it. Folklore and old wives' tales abound, but solid, tested knowledge is scarce. We do know that work and the work force are undergoing greater changes today than at any time since the beginning of the industrial revolution two centuries ago. We do know that, at least in the developed countries, radically new approaches are needed to the analysis, synthesis, and control of work and production; to job structure, work relationships, and the structure of economic rewards and power relations; to making workers responsible. We do know that we have to move from "managing personnel" as a "cost center" and a "problem" to the leadership of people.

The New Realities

Work and Its Ambivalence

"Work" and "Working"

Work and Worker in Rapid Change

The "Employee Society"

The Shift to the Knowledge Worker

The Crisis of the Manual Worker

"Hard Hats" versus "Liberals"

The Crisis of the Labor Union

Managing the Knowledge Worker; the New Challenge

What Is Productivity in Knowledge Work?

And What Is Achievement?

The Segmentation of the Work Force

The Fallacy of the "One Personnel Policy"

The "New Breed"

What We Know (and Don't Know) About Work, Working, and Worker

The Primitive State of Our Knowledge

The Three Requirements of Productive Work

Taylor's Analysis, Its Contribution, and Its Limitations

Synthesis and Control of Work

The Five Dimensions of Working:

Physiology:

Psychology;

Community;

Economics;

Power

Machine Design and "Human Design "

Work as Curse and Blessing

Work as Social and Community Bond

"Wage Fund" and "Capital Fund"

Work as Living and Work as Cost

The Mirage of Worker Ownership

The Power Dimension of Working

Organization Is Alienation

The Sixth Dimension: Power in the Economic Sphere

Organization as a Redistributive System

The Fallacy of the Dominant Dimension

Wants as Hierarchy and as Configuration

Wants Change in the Process of Being Satisfied

What Can the Manager Do?

Making Work Productive: Work and Process

Work Is Generic

Skill and Knowledge Are in the "Working," Not in the Work

The Four Steps Toward Productive Work

The Analysis of Work

Taylor and His Disciples

What Industrial Engineering Is and Is Not

Focus on the End Product

Laying out "Jobs" Not Part of Work Analysis

Work Analysis Only the First Step

The Principles of Production

Unique Product Production

Rigid and Flexible Mass Production

Process Production

What Each Principle Demands

Making Work Productive: Controls and Tools

Control of Work and Process

Control Must Be a Tool of the Worker

Control a Principle of Economy, Not of Morality

Inspection Is Not Control

Routines and Exceptions

The Patterns of Routines

Work and Tools

Bigger Is Not Better

Modernization and Automation

Tools as the Bridge Between Work and Working

Men Are Poor Machine Parts

The Principles of Automation

Beyond Manual Work

Processing Information

Application and Learning of Known Knowledge

What about the Generation of New Knowledge?

The Challenge

Worker and Working: Theories and Reality

McGregor's Theory X and Theory Y

The Evidence for "Theory Y"

And Its Weaknesses

Maslow's Criticism

What Is the Manager's Reality?

Why "the Stick" No Longer Works

"Big Fear" and "Little Fears"

The Overly Potent "Carrot"

The Myth of Antimaterialism

The Demand for "Much More"

And Its Toxic Side Effects

From Master to Manager

Can We Replace Carrot and Stick?

Enlightened Psychological Despotism

Why It Will Not Work

What Then Can Work?

Success Stories: Japan, Zeiss, IBM

Industrial Engineering in Japan

Continuous Training; Zen versus Confucius

Lifetime Employment

But Flexible Labor Costs

To Each According to His 'Needs; the Benefit System

The Godfather System

Upward Responsibility

Ernst Abbé and the Zeiss Optical Works

The IBM Story

The Lessons

Not Permissive Management but Organized Responsibility

The Responsible Worker

Focus on the Job

The Prerequisites of Responsibility

The Fallacy of "Creativity "

Feedback Information for Self Control

Continuous Learning

Planning and Doing

The Worker as a "Resource" in "Planning"

The Need for Clear Authority

Responsibility for Job and Work Group

Assembly Line and Job Enrichment

Worker Responsibility and the "New Breeds "

The "Rejected'!

The "Pre-Industrials"

The Knowledge Workers

Saving the Supervisor

Plant and Office as Communities

And as Power Structures

The Needs and Limits of Governance

The Need for Leadership Opportunities

Work-Community Activities

The Self-Governing Work Community

From "My Workers" to "Fellow Employees" to "Fellow Managers"

Employment, Incomes, and Benefits

Job Security and Income Stability

Resistance to Change and Job Insecurity

American Job Mobility: Myths and Reality

The Shortcomings

The Rehn Plan

Needed: Organized Placement

Profits, Productivity, and Benefits

Making "Benefits" Benefit

What Benefits Should Be

Benefits and the Work Community

"People Are Our Greatest Asset"

The Confusion of Authority with Power

The Lesson of Decentralization

The Demands on Management

Leadership of People

The Traditional Approaches

Welfare Paternalism

The Krupp Example

Personnel Management

People as a Cost and as a Threat

"Our Greatest Resource Is People"

The Practices of People Management

Treating People as a Resource

Placement—the Leadership of People

Social Impacts and Social Responsibilities—The quality of life is the third major task area for management. Managements of all institutions are responsibile for their by products, that is, the impacts of their legitimate activities on people and on the physical and social environment. They are increasingly expected to anticipate and to resolve social problems. They need to think through and develop new policies for the relationship of business and government, which is rapidly outgrowing traditional theories and habits. What are the tasks? What are the opportunities? What are the limitations? And what are the ethics of leadership for the manager who is a leader but not a master?

Management and the Quality of Life

The Changed Meaning of "Social Responsibility"

What Explains It? The Price of Success

The Disenchantment with Government

The New Leadership Groups

Why Public Relations Are Inadequate

Three Cautionary Tales

Union Carbide and Vienna, West Viginia

Swift do Argentina and Deltec

Civil Rights and the Quaker Conscience

Social Responsibilities Have to Be Managed

Social Impacts and Social Problems

Responsibility for Impacts

The High Price of Neglect

Anticipating Impacts

"Technology Assessment" or "Technology Monitoring"

How to Deal with Impacts

Their Elimination as a Business Opportunity

When Regulation Is Needed

The Trade-Offs

Impacts as Business Responsibility

Social Problems as Business Opportunities

Solving a Social Problem—Sears, Ford, IBM

Second Careers for the Middle-Aged Knowledge Worker

The "Degenerative Diseases" of Society

Are There Limits to Social Responsibility?

The Limits of Social Responsibility

Management's First Responsibility: Its Own Institution

The Need to Know Minimum Profitability Requirements

To "Do Good" and to "Do Well"

The Limits of Competence

The Limitations of One's Value SystemThe Areas of Incompetence

The Limits of Authority

No Responsibility without Authority

When to Say No

The Commitment to Working Out Alternatives

The Limits of Social Responsibility as a Central Problem to Management and to the Society of Organizations

Business and Government

A Crucial Social Responsibilities Area

The Need for New Political Theory

The Historical Models

Mercantilism or Dirigisme

Constitutionalism

Models and Reality

The New Problems

Guidelines

Autonomy and Accountability of Business and Managers

The Open-Ended Economy

A Healthy and Functioning Government

The Multinational business

Government Relations as an Area of Social Responsibility

Primum Non Nocere: The Ethics of Responsibility

The Ethics of Businessmen: The Wrong Question?

Leadership Groups but Not Leaders

What Being a Professional Means

An Ethic of Responsibility

Primum non nocere

Social Responsibility vs. "Club Membership"

Executive Compensation and Income Inequality

The "Golden Fetters"

The Rhetoric of the Profit Motive

Private Function and Public Character

PART TWO: THE MANAGER: WORK, JOBS, SKILLS, AND ORGANIZATION

Managers do not hold their jobs by "delegation." They are thus autonomous and grounded in the needs and realities of enterprise. There are thus managerial jobs: there is managerial work; there are managerial skills; and there is distinct managerial organization.

Why Managers?

Managers, the Basic Resource of a Business, the Scarcest, Most Expensive, and Most Perishable

The Ford Story: A Controlled Experiment in Mismanagement

Siemens and Mitsubishi as Examples

Ford and Lenin

The Lesson of the Ford Story

Management Precedes Ownership

The "Management Lag" of British Industry

Management. "Change of Phase" Rather Than Adaptation

Management an Autonomous Function, Not a Delegated One

The Manager's Work and Jobs

What makes a manager is responsibility for contribution to the results of the enterprise rather than "responsibility for the work of others." It is responsibility for his own work; and there is a distinct "work of the manager," there are distinct "managerial jobs." There is a distinct way to manage managers: by objectives and self control. There are also new requirements as we move from "middle management" to the "knowledge organization." Finally, managers have to be managed so as to engender in them a spirit of performance.

What Makes a Manager?

The Traditional Definition

Its Inadequacy

Manager and Member of Management

The Career Professional

Defining a Manager by Function Rather Than Power

Title, Function, and Pay of the Career Professional

The Manager and His Work

How Does the Manager Do His Work?

The Work of the Manager

Information: The Tool of the Manager

Using His Own Time

The Manager's Resource: Man

The One Requirement: Character

Design and Content of Managerial Jobs

The Indian Civil Service

Managers Must Manage

The Common Mistakes

The Job That Is Too Small to Grow In

Satisfaction through Promotion Rather Than Performance

The Importance of Age Balance

The Nonjob of the "Assistant to"

The Busy Nonjobs of "Meeting" and "Traveling"

Titles in Lieu of Function

The "Widow-Maker" Job

Should a Job Fit the Person or the Person Fit the Job?

''Style" and Substance

The Span of Managerial Relationships

The Four-fold Definition of a Manager's Job

The Manager's Authority

The Manager, His Superior, His Subordinates, and the Enterprise

Developing Management and Managers

The Management Development Boom

Why Management Development and Manager Development are Needed

What They Are Not

The Two Dimensions of Development

Designing the Jobs and Skills for Tomorrow

Self-Development of the Individual

The Role of Company and Superior in Self-Development

Management by Objectives and Self-Control

The Forces of Misdirection

Workmanship: A Necessity and a Danger

Misdirection by the Boss

Misdirection by Compensation

What Should the Objectives Be?

Management by Drives

How Should Managers' Objectives Be Set and by Whom?

Self-Control Through Measurements

Does It Demand Too Much of the Individual?

A Philosophy of Management

From Middle Management to Knowledge Organization

Middle Management's Predicted Demise

And the Middle Management Boom

The Needed Correction

The Danger of Overstaffing

The Need for "Weight Control"

Sloughing Off the Old

Where the Growth Occurred

The Emergence of the Knowledge Professional

The Social Structure of Traditional Middle Management

The European Tradition

The New Middle Manager: Middle Rank but Top-Management "Impacts"

The Knowledge Organization

Middle-Management Job Design

The Need for Clear Decision Authority

Top Management's Role in the Knowledge Organization

Middle Managers: "Juniors" and "Colleagues" Rather Than "Subordinates"

The Spirit of Performance

To Make Common Men Do Uncommon Things

The Test Is Performance, Not Good Feelings

Focus on Strength

Practices, Not Preachments

The Danger of Safe Mediocrity

What "Performance" Means

What to Do with the Nonperformer

"Conscience "Decisions

Focus on Opportunity

"People" Decisions: The Control of an Organization

Integrity, the Touchstone

Managerial Skills

Managing is specific work. As such it requires specific skills. Among them are: making effective decisions; communications within and without the organization; the proper use of controls and measurements; the proper use of analytical tools, that is, of the management sciences. No manager is likely to master all these skills. But every manager needs to understand what they are, what they can do for him, and what, in turn, they require of him. Every manager needs basic literacy with respect to essential managerial skills.

The Effective Decision

The Japanese Way

The Essentials

Facts or Opinions?

What Is the Appropriate Measurement?

The Need for Dissent and Alternatives

The Trap of "Being Right"

Is a Decision Necessary?

Who Has to Do the Work?

The Right and the Wrong Compromise

The Feedback

Decision-making Is Effective Action

Managerial Communications

More Talk; and Less Communication

What We Have Learned

The Fundamentals

Communication Is Perception

Communication Is Expectation

Communication Makes Demands

Communication and Information Are Different

Information Presupposes Communication

Why Downward Communications Cannot Work

The Limitations of "Listening"

The Demands of the Information Explosion

What Can Managers Do?

Management by Objectives, Performance Appraisal and Management Letter as Communications Tools

Communications, the Mode of Organization

Controls, Control, and Management

Controls and Control

The Characteristics of Controls

Controls Are Goal-Setting and Value-Setting

Controls Needed for Measurable and for Non measurable Events

The Specification for Controls

Economy

Meaning

Controls Follow Strategy

Appropriateness

Congruence

Timeliness

Simplicity

Controls Must Be Operational

The Ultimate Control of Organizations

Controls and the Spirit of an Organization

The Manager and the Management Sciences

Management Sciences: Promise and Performance

Why Management Sciences Do Not Yet Perform

How the Management Sciences Originated

Why They Tend to Be Unscientific

The Basic Postulates

The First Need of the Management Sciences

The Fear of Risk-Taking

What Managers Should Expect

Testing Assumptions

Right Questions, Not Answers

Alternatives, Not Solutions

Understanding, Not Formulae

What the Management Sciences Should Work On

From Potential to Performance

Managerial Organization

Organization structure is the oldest and most thoroughly studied area in management. But we face new needs in organization which the well known and well tested structural designs of "functional" and "decentralized" organization cannot adequately satisfy. New structural designs are emerging: "the task force team"; "simulated decentralization"; "the systems" structure. We have learned that organization does not start with structure but with building blocks; that there is no one right or universal design but that each enterprise needs to design around the key activities appropriate to its mission and its strategies; that three different kinds of work, operating, innovative, and top management, require being structured and lodged under the same organizational roof and that organization structure needs to be both task focused and person focused and to have both an authority axis and a responsibility axis.

New Needs and New Approaches

The Emphasis on Organization Structure in the Management Boom

And the Reasons for It

The Danger of the Wrong Structure

The Importance of Organization for the Small Business

Yesterday's Final Answers

Fayol's "Functions" and Sloan's "Federal Decentralization

"Traditional Assumptions and Current Needs

What We Have Learned

The First Step: Identifying the Building Blocks

"Structure Follows Strategy"

The Key Activities

The Three Kinds of Work: Operations, Top Management, Innovation

What We Need to Unlearn

"Task Focus" versus "Person Focus"

"Hierarchy" versus "Free Form "

"Constitutional Lawyer" versus "Educaror"

From "Simple-Axis" to "Multi-Axis" Organization"

"There Must Be One Final Answer"

The Building Blocks of Organization

The Four Tasks of the Organizer

Finding the Key Activities

Key Vulnerabilities

Values

When Key Activities Have to Be Reanalyzed

The Contributions Analysis

Revenue-Producing Activities

Result-Producing Work

Support Work

The "Conscience" Areas

Making Service Staffs Effective

The Two Faces of Information

Information: An Unanswered Organization Problem

Hygiene and Housekeeping

Contribution Determines Function

... And How They Join Together

Decision Analysis

Where Does Certain Work Belong?

Relations Analysis

Where Does a Particular Unit Belong?

Keeping Relationships to a Minimum

But Making Each Count

Malorganization, Its Symptoms and Its Causes

Too Many Levels

Recurrent Organization Problems

Meetings

Overconcern with "Feelings "

Reliance on Nonjobs

"Organizitis" as a Chronic Affliction

Design Logics and Design Specifications

The Five "Design Principles"

Is an Additional One Still Unknown?

Limitations and Requirements

Formal Specifications

Clarity

Economy

The Direction of Vision

Understanding of Task

DecisionMaking

Stability and Adaptability

Perpetuation and Self-Renewal

Operating, Innovative, Top-Management Structures

Work and Task Focused Design: Functional Structure and Team

The Three Ways of Organizing Work and Task

The Functional Structure

Its Strengths and Its Limitations

Can the Weaknesses Be Offset?

Vail's "Bogeys"

GE's "Functional Objectives"

Their limited Scope

Where Functionalism Works

The Team

Examples: The Hospital; the Plastic-Mold Company

Their Lessons

Requirements for Effective Teams: Continuing Mission; Clear Objective; Leadership; Group Responsibility

The Team Leader's First Job: Clarity

The Limitations of the Team Principle

How Large Can a Team Be?

The Scope of Team Organization

Top-Management Teams

Innovating Teams

Team Design and Functional Structure

Team Design and Mass-Production Work

Team Design and Knowledge Organization

Result-Focused Design: Federal and Simulated Decentralization

Decentralization and Functional Organization

The Strengths of Federal Decentralization

Federal Decentralization and Manager Development

Its Application to Nonbusiness Organizations

The Requirements of Federal Decentralization

A Strong Top Management Doing Top-Management Work

The "Reserved" Areas

The Need for Centralized Controls and Common Measurements

The Demands on the Autonomous Business

Size Requirements

What Is Too Big and What Is Too Small?

The Role of Service Staffs

What Is a "Business"?

The Innovative Component

Simulated Decentralization

The "Materials" Business

IBM

The Commercial Bank

The Problems of Simulated Decentralization

Its Limited Scope

Simulated Decentralization a Last Resort

Its Future

Relations-Focused Design: The Systems Structure

NASA

The Japanese Systems Designs and the 'Multinational"

Diversity of Cultures and Values

The Difficulties of the Systems Structure

Its Requirements

Its Importance

Organization Conclusions

"Ideal Organization" or "Pragmatism "?

The Need to Test Assumptions

The Need for Simplicity

Focus on Key Results and Key Activities

The Test: The Performance of People

PART THREE—TOP MANAGEMENT: TASKS, ORGANIZATION, STRATEGIES (notes)

Top Management is the directing, vision-setting, standard-setting organ. As such it has specific tasks. It requires its own organization. And it faces specific top management challenges of structure and strategy with respect to size and complexity, diversity and diversification, growth, change, and innovation.

Georg Siemens and the Deutsche Bank

Top Management: Rank or Function

Georg Siemens and the "Universal Bank "

Top-Management Tasks

Top-Management Team

The "Secretariat "

The Lessons

Top-Management Tasks and Organization

Top-Management tasks differ fundamentally from the tasks of the other management groups. They are multidimensional. They are recurrent but intermittent. They make different and often conflicting demands on personality and temperament. There is, therefore, need so to structure the top management job that both the objective tasks to be accomplished and the personalities of the people available are taken care of. And there is need for providing top management with the stimulation and information it needs for its specific tasks.

Top-Management Tasks

The Dimensions of the Top-Management Task

Specific Needs in Specific Businesses

To "Operate" or Not to "Operate"

The Rules

Recurrent but Intermittent Tasks

Required: A Diversity of Capabilities and Temperaments

Top-Management Tasks and Chief-Executive Styles

The TopManagement Work Plan

Top-Management Structure

Top-Management Team Structures

The "General Director"

The Group Executive

How Many Top-Mangements?

Specifications for Top-Management Teams

Teamwork in Top Management

The "Reserved" Decisions

How to Nourish the Brain

The "Secretariat" and Its Weaknesses

"Business Research"

"The Bottleneck Is at the Head of the Bottle"

Needed: An Effective Board

The Board: Legal Fiction and Impotent Reality

The Push to "Politicize" the Board

The Board in Germany, Sweden, and the U S.

The "Euroboard"

Why Top Management Needs a Board

The Three Functions of the Board

The Board as Review and Appeals Organ

The Board as Safeguard Against Incompetent Management

The Public and Community Relations Function

What Is Needed

Objectives and a "Work Plan "for the Board

Who Belongs on the Board

The "Professional" Director

Designing and Building an Effective Board as a Top-Management Task

Strategies and Structures

The job, task, and responsibilities of worker and foreman in the plant, key punch operator and secretary in the office, metallurgist in the engineering lab, field salesman and branch manager of a bank or insurance company are little affected by size, complexity, growth, or diversity. Even innovation has an effect on most people in an organization only after it has become accomplished fact. But the structure, the behavior, the tasks, and the strategies of top management are profoundly molded by changes in size and complexity, by diversification, growth, and innovation. And, in turn, top management and only top management can make the strategic decisions that lead to growth, diversification, or innovation. The managerial strategies that relate to a company's basic structure have received almost no attention. They may, however, be of greater importance than strategies with respect to finances, product development, or marketing on which the discussion has focused. Size, diversity, complexity, growth, and innovation are, above all, managerial challenges and opportunities to top management and make managerial demands on it.

On Being the Right Size

The Law of Surface and Mass

Size and Complexity

Why Changes in Size Are "Quantum Jumps"

Size and Strategy

Size and Complexity as Top-Management Tasks

Managing the Small, the Fair-Sized, the Big Business

How Big Is Big?

No Measurement Truly Adequate

Size Is a "Configuration "

Management Structure, the One Criterion of Size

The Three Categories: Small, Fair-Sized, and Big

Managing the Small Business

The Need for a Distinct Niche

Structuring the Top-Management Tasks

Making the Top Man Effective

Control and Information in the Small Business

The Fair-Sized Business

The Three Types

Their Specific Requirements

The Danger of Becoming Flabby

The Need for Self-Discipline

The Big Business

An Impersonal Business

The Need for Structure

The Need for Clarity

Organizing "Disorder"

The Role of the "Old Boy Network"

The Role of the Task Force Team

The Danger of Becoming Inbred

The Danger of Exclusive "Promotion from Within "

Size as a Top-Management Challenge

On Being the Wrong Size

Being the Wrong Size

A Serious and Common Disease

Many Causes

But Always the Same Symptoms

What Works and What Doesn't

Changing the Character of the Business

American Motors and Volkswagen

Courtaulds and Celanese

Merger and Acquisition to Cure "Wrong" Size

Sale, Divestment or Systematic Shrinkage

Can a Company Be Too Big to Be Manageable?

The Unmanageable Service Institution

Multinational Business Services

Unmanageably Big Service Staffs

The Optimum Point

The Company That Is Too Big for Its Environment

Why General Motors Should Have Split Itself

The Company That Is Too Big for Its Community

The Company That Is Too Big for Its Economy

Wrong Size Requires Top-Management Action

The Pressures for Diversity

Shoemaker, Stick to Your Last!

The Danger of Complexity

"Diversification": The Myths and the Realities

"Murphy's Law" and "Drucker's Law"

I. G. Farben

The Lesson of Litton

The Fallacy of "Asset Management "

"Investor" vs. "Asset Manager"

Supermen Are Mortal

Why Diversification?

The Internal Pressures

"We Need to Do Something New"

The Danger of Overspecialization

The Musician's Rule

Merck's Example

Backward and Forward Integration

Making a Profit Center out of a Cost Center

J. Lyons and Heineken

External Pressures

The Economy That Is Too Small

Belgium as the Prototype

The California Experience

Diversification through Market Expansion

The Branching of Technology

The Impact of Taxation

W. R. Grace

The New "Mass Markets" of Investment and Job Opportunities

Right and Wrong Diversification

Diversification Must Be Managed

Needed: A Core of Unity

Building Unity Out of Diversity

The Two Cores of Unity: Market and Technology

A Caveat: Customers, Not Manufacturers, Define the Market

The Risks of the Market Definition

The Need for a Business Strategy

GM and British Leyland

Technology as a Common Core of Unity

Some Basic Rules

Technology Must Be Specific

Technology Must Be Distinct

Technology Must Be Essential Strategies for Technology-Based Diversification

The "Extended Technological Family"

Is It Outmoded?

Its Limitations

What Does Not Work

Two-Axes Diversification

"Countercyclical" Diversification

The Illusion of "Financial Synergism "

Diversification for the Sake of Diversification

Diversification to Cure Weakness

The Need for "Temperamental Fit"

Managing Diversity

Managing Successful Diversification

What to Do with the "Misfit'?

The Temptation of the "Partial Fit"

The Four Tools of Diversification

GrassRoots Development vs. Acquisition

The Question of Temperament

The Difference in Approach

What Contribution Can We Make?

Grass-Roots Acquisition Strategy

Divestment of the Misfit: A Marketing Problem

Joint Venture

The Various Kinds

The Gound Rules

The Danger of Success

Who Shall Manage?

When Joint Ventures No Longer Make Sense

A Note on the Family Business

The Multinational Corporation

The Major Social Innovation Since World War II

The Testing Period Still Ahead

What Explains the Multinational?

Not an American Development

Not Confined to Big Business

Not Confined to Manufacturing

Not the Response to Protectionism

The Emerging Common World Market

The New Demands

From "Multinational" to "Transnational" Company

The Split Between Economy and Sovereignty

The "Multicultural" Corporation

Integrating Political and Cultural Diversity into Managerial Unity

The Internal Forces

The Need for Business Strategy and Strategies

The Need to Concentrate

The Top-Management Teams

The Need for Systems Management

The Individual Manager

His Organizational Placement

A Man Needs a Home

How to Pay?

The Multinational and Its Environment

Its Position in Its Host Country

Its Position in Its Home Country

Not an Economic but a Political Problem

The Multinational in the Developing Countries

The Folly of "Import Substitution "

The Wholly-Owned Subsidiary

The Canadian Example

The Problems of Success

The Petroleum Concession

The Multinational Tomorrow

Managing Growth

IBM's Near Miss

Ford, Siemens, AT&T & Sears, Roebuck

The "Identity Crisis"

Why Growth Is Not Automatic

Is Growth Necessary

The Growth Craze of the Fifties and Sixties

Myths about "Growth Companies" and "Growth Industries"

The Turbulence of Zero Growth

Growth in the Public Service Institution

Growth as a Minimum Need

Preparing for Growth

Top Management: The Controlling Factor

Staffing Key Activities

The Symptoms of the Need for Change

The Top Man's Personal Decision

And His Responsibility.

The Innovative Organization

Innovation an Economic or Social Term

Innovation Characteristics

The Dynamics of Innovation

Innovation Strategy and Its Basic Assumption

The Need for Planned Abandonment of the Old

The Need to Aim High

The Batting Average

The Progress of an Innovation

Measurements and Budgets

The Risk of Failures or of "Near Success"

Innovative Attitudes and Practices

Management's Different Role

Focus on Responsibility

Continuous Learning

The Structure for Innovation

The Du Pont Example

Innovation a "Business" Rather Than a "Function"

The Team

The Innovating Unit as an Entrepreneur

The Challenge of the Innovative Organization

CONCLUSION: THE LEGITIMACY OF MANAGEMENT

In this century society has become a society of organizations. Every major social task in this society is being performed in and through large, managed institutions. As a result, the great majority of people in developed countries work as employees. They work as members of managed institutions and within a managerial structure and organization.

In this century society has become a knowledge society. More and more of the members of developed society make their living by putting knowledge to work. More and more acquire their qualifications through long years of formal education. More and more of them are managers themselves or work as knowledge professionals with direct responsibility for performance and results.

The two developments are interrelated. Because of the emergence of the society of organizations, one can now make a living through knowledge work. And because of the availability of large numbers of people with substantial formal education, large institutions are possible and can be managed.

Management is both the carrier and the result of these two developments. It is the organ through which the institutions of the society of organizations can be made to function and to perform their mission. And management itself is such a "knowledge." It is a discipline with its own subject matters, its own skills, its own expertise. Above all, the managers of these institutions in a society of organizations form the leadership groups of the society.

Unless this society of organizations destroys itself, managers as a leadership group and management as a discipline and challenge will remain with us. To repeat the leitmotiv of this book, we are moving from management boom to management performance. It is the task of this management generation to make the institutions of the society of organizations, beginning with the business enterprise, perform for society and economy; for the community; and for the individual alike.

This requires, first, that managers know their discipline. It requires that they know management.

We hear a great deal today about the manager of the future. But the important man is the manager of today. And the first requirement is that the manager know his craft, his tools, his task and responsibility. The first requirement is that he be able to function.

The Limits of Technocracy

The management boom focused on management skills and management competence. But it largely defined the management job as internal. It was concerned with organization and motivation, with financial and other controls, with the management sciences, and with manager development. It was, to use a fashionable term, technocratic in its orientation. This was understandable. It was also right. One has to know one's own craft. There are few things as useless as the man who wants to set right the world because he does not know his own job.

But if the years of the management boom have taught us anything, it is that the technocrat as manager is not enough. It is precisely because in the society of organizations there is no leadership group other than the managers that more is required than technocracy.

The first task of the manager is indeed to manage the institution for the mission for which it has been designed. The first task of the business manager is, therefore, economic performance. But at the same time he faces the tasks of making the work productive and the worker achieving, and of providing for the quality of life for society and individual. And this goes well beyond technocracy.

President Kennedy's administration was the peak of a great wave of technocracy. It was also its tragedy. And Robert McNamara, President Kennedy's Secretary of Defense, personified both the strength and the limitations of the technocrat. In the final analysis McNamara was a failure not because of Vietnam but because "managing" to him was focus on the internal and excluded the external, the value, the people, the social dimensions.

But General Motors also can be seen as the triumph and the failure of the technocrat manager. Indeed the book which the builder of General Motors, Alfred P. Sloan, wrote* shows both the strength of the truly accomplished technocratic manager and his limitations. General Motors has stayed with Sloan's legacy. And in Sloan's terms i.e., in terms of sales and profits, it has succeeded admirably, at least in the North American market. But it has also failed abysmally in terms of public reputation, of public esteem, of acceptance by the public.*

There is great temptation here the temptation for the manager to become a philosopher, the temptation to become "cosmic." Hence it cannot be said too often that the foundation for "doing good" is "doing well." Good intentions are no excuse for incompetence. And the manager who believes that social consciousness is a substitute for managing his business or his hospital or his university so that it produces the results for the sake of which it exists, is either a fool or a knave or both.

The Need for Legitimacy

But a leadership group needs not only to function. It needs not only to perform. It also has to have legitimacy. It has to be accepted by the community as "right."

"Legitimacy" is an elusive concept. It has, in effect, no real definition. Yet it is crucial. Authority without legitimacy is usurpation. And the leadership groups of a society and this means the managers today have to have authority to perform their functions.

At the same time, none of the traditional grounds of legitimacy will do for the managers. Birth or magic are just as unsuitable for them as popular election or the rights of private property. They hold office because they perform. And yet performance by itself has never been sufficient grounds for legitimacy.

What managers need to be accepted as legitimate authority is a principle of morality. They need to ground their authority in a moral commitment which, at the same time, expresses the purpose and character of organizations.

Almost three centuries ago the English pamphleteer Mandeville in a didactic poem "The Fable of the Bees" laid down what became, a century later, the principle of capitalism. "Private vices make public benefit." Blind and greedy profit seeking, Mandeville laid down, advances the public good through the "invisible hand." In terms of performance, history has proven Mandeville remarkably right. But morally his principle was never acceptable. And the fact that capitalism has become the less acceptable the more it succeeded as the great Austro American economist Joseph Schumpeter pointed out repeatedly has been the basic weakness of modern society and modern economy.

This, by the way, is why the rhetoric of "profit maximization" and "profit motive" are not only antisocial. They are immoral.

Although we still talk in De Mandeville's terms, we have long ago shifted to a very different base. We long ago learned that it is the job of the business manager to convert public needs into business opportunities. It is his task to anticipate, identify, and satisfy the needs of market and individual, the needs of consumer and employee.

But these are still inadequate grounds of legitimacy. They explain business activity rationally, but they do not supply it with the justification for authority. To maintain an autonomous management, a management that in serving its institution serves society and community, a principle of morality has to be grounded in the purposes and the characteristics of organization and in the nature of the institution itself.

There is only one such principle. It is the purpose of organization and, therefore, the grounds of management authority: to make human strength productive. Organization is the means through which man, as an individual and as a member of the community, finds both contribution and achievement.

The invention of organization as society's tool for accomplishing social purposes may well be as important to the history of man as was the invention of the specialization of labor for individuals ten thousand years ago. And the principle underlying it is not "private vices make public benefits." It is "personal strengths make social benefits. "This can serve as grounds for legitimacy. This is a moral principle on which authority can be based.

To maintain management as autonomous, and indeed as "private," is an essential need of society. It is essential for keeping society free. It is essential for keeping society performing. The alternative, the "totalitarian" structure in which all activities, all individuals, and all organizations monolithically repeat the same pattern, are managed by one and the same governing group, and express the same values, the same doctrine, and the same orthodoxy, is not only death to the human spirit, it is grotesque. It is also wasteful, rigid, stifling. It is not, above all, business that needs the autonomy of the markets for goods and services, for capital, and for jobs and careers, that is, autonomous and accountable management of autonomous institutions. It is (as Chapter 27 pointed out earlier), the economy, the society, and government itself which require managerial autonomy and "free enterprise."

Yet to have a society of organizations with autonomous managements, each a decision maker in its own sphere, requires that managers, while private, also know themselves to be public. They are private in that they are not subservient to a central political authority which, in turn, is uncontrolled, uncontrollable, and despotic as inevitable result. But they are public in that they consciously, knowingly, openly, strive to make a public need into a private opportunity of their autonomous self governing institution.

The old fights are still being fought and the old slogans still reverberate. Yet even the Soviet Union has had to accept "profit" as a necessary condition of economic activity and as a means to build the "capital fund" without which no economy can survive, let alone advance. Indeed, the profit requirement of a totally planned and therefore rigid economy is, of necessity, many times greater than that of a "market economy." "Ownership" is becoming a secondary issue, especially as the "workers" increasingly are also becoming the "owners" in the most highly developed countries. This does not mean that we cannot be killed by these old fights and issues. The scars fester and are toxic. But nothing can be "solved" by the remedies of the nineteenth century.

What is needed to break out of the straitjacket of old slogans and old issues is management performance. This first requires performance as a technocrat. It requires performance that makes the manager's organization capable of supplying to society and economy the contribution for the sake of which it exists, such as economic goods and services and the capital fund for tomorrow. But it also requires performance beyond the immediate mission, beyond technocracy: performance in making work productive and the worker achieving and performance with respect to the quality of life. But above all, it has to be performance with respect to the role and function of the manager. If he is to remain as he should the manager of an autonomous institution, he must accept that he is a public man. He must accept the moral responsibility of organization, the responsibility of making individual strengths productive and achieving.