1.

Management’s New paradigms

The basic assumption about reality is the paradigms. Science deals with objects where as
management deals with people and organization. Old assumptions do not work in modern
times. They have to change with the times. Two sets of assumptions regarding management
have been held by most scholars, writers and practitioners. One set underlines discipline and
the other practice of management.

Under Discipline Comes

1. Management is Business Management.

2. There must be one right organizational structure.
3. There must be one right way to manage people.
The first application of management theory did not take place in a business but in non-profit and
government agencies. Taylor was the one who coined the term ‘management’ and consultant in
the present meaning. Management is the specific and distinguishing organ of any and all
organizations.

2. The one right organization

There is not only one right organization. The right organization is the organization that fits the
task.

3. The one right way to manage people

One does not manage people. The task is to lead people. And the goal is to make individuals
productive with the specific strengths and knowledge.

4. Technological and end user are fixed and given

Neither technology nor end-user is a foundation of management policy. The foundation is based
on customer value and customer decision which again is dependent on their incomes.

5. Management’s scope is legally defined

The new assumption on which management has to base itself is that the scope of management
is not legal. It has to be operational it has to embrace the entire process. It has to focus on
performance and results across the entire economic chain.

6. Management’s scope is politically defined

National boundaries are important for any company but management has to be operational
rather than political.

7. The inside is management’s domain

Management exists for the sake of institution’s results. It is the organ which is capable of
producing results outside of its self.

2. Strategy-The New certainties

Strategy converts an organization's set of assumptions into performance by allowing it to be
purposefully opportunistic. According to Drucker, strategies must consider the following five new
certainties that are more social and political, rather than economic.

1. The Collapsing Birthrate in the Developed World

The birth rate is falling drastically in western countries making the proportions of older younger
generations uneven and there by affecting the business.

2. Shifts in the Distribution of Disposal Income.

Shifts in the shares of disposable income are just as important as shifts in population but usually
less attention is paid to them. They are likely to be as dramatic as the demographic changes
during the first decade of 21st century

3. Defining Performance.

Performance means balancing of the results. If the results are bad we have to develop new
concepts of what performance

4. Global Competitiveness.

All institutions have to make global competitiveness a strategic goal. No institution can survive
unless it measures up to the standards set by the leaders in its field any place in the world.

5. The Growing Incongruence between Economic reality and Political reality.

This point is not suggesting any solution it is only raising questions and asking the institutes to
formulate a strategy to face new challenges that are going to occur in future, unless these are
met they cannot sustain them self.
 3. The Change Leader
Change is the norm in our present situation - "But unless it is seen as the task of the
organization to lead change, the organization - whether business, university, hospital and so on
- will not survive. In a period of rapid structural change, the only ones who survive are the
Change Leaders.”  Drucker give four requirements for change leadership.

1. Polices to make the future.

2. Systematic methods to look for and to anticipate change.
3. The right way to introduce change, both within and outside the organization.
4. Policies to balance change and continuity.

Neither studies nor computer modeling are a substitute for the test of reality,' according to
Drucker. So what he recommends as the right way to introduce change is the piloting of new or
improved systems. Drucker see change and continuity as two poles rather than mutually
exclusive opposites. In order to be a change leader it is necessary to have internal and external
continuity.

4. Information Challenges
Drucker describes the new information revolution that is gaining momentum as follows.

So far, for fifty years, Information Technology has centered on data -their collection, storage,
transmission, presentation. It has focused on the ‘T' in ‘IT'. The new information revolutions
focus on the ‘I'. They ask, ‘what is the meaning of information and its purpose?' And this is
leading rapidly to redefining the tasks to be done with the help of information and, with it, to
redefining the institutions that do these tasks." 

It is now necessary to define information, new ideas, and new paradigms. More data, more
technology, and more speed is not needed from IT. Data is not information until it is organized in
meaningful patterns. Drucker gives some popular methods of organizing management data. 

1. Foundation Information
This information is the oldest and most widely used set of diagnostic tools, such as cash flow or
sales. If they are normal they do not tell us much, if they are abnormal they indicate a problem
to be identified and addressed

2. Productivity information
This information deals with the productivity of key resources. Economic Value Added Analysis
(EVA) is popular because it measures, in effect, the productivity of all factors of production. With
benchmarking, comparing one’s performance with the best performance in the industry, EVA
provides tools to measure and manage total factor productivity.

.
3. Competence Information

Companies are developing the methodology to measure and manage core competencies. Every
organization needs one core competence: innovation.

5. Knowledge Worker Productivity

The most important contribution of management in the 20th century was the fifty-fold increase in
the productivity of the manual worker in manufacturing. The most valuable assets of a 20th
century company were its production equipment. The most valuable asset of a 21st century
institution will be its knowledge workers and their productivity.

After looking at the measures for manual labor productivity, Drucker offers six major factors that
determine knowledge worker productivity.

1. What is the task?

Knowledge work unlike manual work does not program the worker. Work on knowledge worker
productivity begins with asking the knowledge worker: What should you be expected to
contribute? And what hampers you in doing your task and should be eliminated?

2. Knowledge workers have to manage themselves. They have to have autonomy .

This entails responsibility for their own contribution and accountability in terms of quality,
quantity, time and cost.

3. Continuing innovation has to be part of the work, the task and the responsibility of the
knowledge worker.

4. Knowledge work requires continuous learning and teaching on the part of the knowledge
worker.

5. Productivity of the knowledge worker is not primarily a matter of quantity. Quality is at

least as important.

Defining quality and productivity is a matter of defining a task, requiring the difficult, risk taking
and controversial definition as to what “results” are. To answer it requires controversy, requires
dissent.
 6. Managing Oneself
As the rest of the book deals with changes in society, economy, politics and technology, this
chapter deals with the new demands on the individual.

Drucker coined the term “knowledge worker” thirty years ago. In this chapter, he describes a
practice of feedback analysis to assess our strengths.

He sums up the drastically new demands the knowledge worker faces:

1. They have to ask: Who am I (What are my values)? What are my strengths? How do
I work?

Drucker recommends concentrating on your strength. Place yourself where your strengths can
produce performance and results. Secondly, work on improving your strengths. Thirdly, watch
for intellectual arrogance, areas that you do not believe you need to have any knowledge or
being contemptuous of knowledge outside one’s own specialty. Fourth, eliminate bad habits.
Fifth, have good manners. Sixth, identify where you shouldn’t do anything and seventh, waste
as little effort as possible on improving areas of low competence.

2. They have to ask: Where do I belong?

After answering the questions above, the knowledge worker can decide where they belong or
where they don’t belong. Knowing the answers to the questions enables people to say to an
opportunity, an offer, to an assignment: Yes, I’ll do that. But this is the way I should be doing it.
This is the way it should be structured. These are the kind of results you should expect from me,
and in this time frame, because this is who I am.

3. They have to ask: What is my contribution?

This question is new in human history. Traditionally, the task was given. To ask it means moving
from knowledge to action. To know our strengths we can also answer this question by
answering, where and how can I have results that make a difference?

4. They have to take relationship responsibility.

To manage one requires taking relationship responsibility. First, accept that others are
individuals and have their own strengths. Find out how others work and adapt to the way they
are effective. The second thing to become effective is to take responsibility for communication.
A knowledge worker should request of people with whom they work that they adjust their
behavior to the knowledge worker’s strengths and the way he works.

In summary, Drucker confesses that while he has confined this book to management
challenges, the changes discussed in this book “go way beyond management. They go way
beyond the individual and his or her career. What this book actually dealt with is: the future of
society.”

E…N...D