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Management Challenges for the 21st Century

Management Challenges for the 21st Century

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by Peter F. Drucker, Mark Blum (Narrated by)

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Peter Drucker, arguably the foremost management theorist in the world, identifies and explores the critical management issues of the next century in his first major book since Post-Capitalist Society. With a sweeping command of the social, economic, and demographic changes already at work, Drucker argues that we are in a period of profound transition, one


Peter Drucker, arguably the foremost management theorist in the world, identifies and explores the critical management issues of the next century in his first major book since Post-Capitalist Society. With a sweeping command of the social, economic, and demographic changes already at work, Drucker argues that we are in a period of profound transition, one that will radically alter management for organizations of all types. Management Challenges for the 21st Century provides an incisive overview of this changing management landscape.

Drucker shows how such inexorable global changes as the collapsing birthrate of developed countries, dramatic shifts in disposable income, and the increasing tension between economic globalization and political splintering will fundamentally alter the environment in which organizations'not only businesses, but also non-profits, universities, and even governmental agencies'seek to survive and thrive. "These environmental changes will require managers not only to develop new strategies and methods," Drucker explains, "but even to rethink basic assumptions about the nature and goals of management itself."

Our current understanding of management, he notes, is governed by a set of assumptions that will no longer be tenable in the 21st century. We must learn to recognize these assumptions in order to see their limitations and replace them with new ideas. We must learn, among other lessons, that "management" is not the same as "business management," but rather is a function of any and all organizations; that there is no single, correct organizational structure or way to manage people, but rather a variety of models and options to be adopted as appropriate; that the scope of management is defined neither legally nor politically, but operationally; and that management's domain is not limited to within the organization, but extends beyond it, enabling the organization to produce results outside of itself.

With sharp insight founded on his years of experience, Drucker identities specific challenges that management will face:

  • The necessity to embrace change and become a "change leader"
  • The need to develop new kinds of information resources for effective decision making (such as the shift already underway from cost accounting to activity-based accounting)
  • The need to develop tools and methods to measure and enhance the productivity of knowledge workers (in the same way that the 20th century saw the productivity of manual workers dramatically improved)
  • The need for individual knowledge workers to assume an unprecedented level of responsibility for managing their own careers

As his last chapter shows, with the shift of the economy's foundation from capital to information, Drucker argues that even the individual knowledge worker will have to become concerned with issues of management.

Drucker's ability to question assumptions and see connections among disparate forces and data has made him a visionary thinker in the field of management. In Management Challenges for the 21st Century, he offers a head start on fundamental issues to anyone who will be working with any sort of organization in the next century.

About the Author:

Peter F. Drucker has been Clarke Professor of Social Science at Claremont Graduate School in California since 1971. He is the author of 14 management books and 13 books on economics, politics, and society, which have been translated into more than 20 languages. He has received more than a dozen doctorates from universities in five countries. He and his wife live in Claremont, California.

Editorial Reviews

Harvard Business Review
His writings are landmarks of the managerial profession.
Fortune Magazine
Drucker's ideas continue to display a force and resonance that leave him pretty much in a class by himself. It is impossible to read the man without learning a lot.
Library Journal
In his 31st work, esteemed sociologist Drucker follows his last major management work, Post-Capitalist Society (LJ 2/15/93), with his ideas on how the concept of management is changing, focusing on the major critical issues, problems, practices, and strategies management faces in the new century. Instead of offering a futurist set of predictions, Drucker discusses major challenges facing management that are already manifest in todays rapidly changing world. In a sweeping macro-level analysis of social, economic, and demographic changes at work across the globe, Drucker outlines the changing role of management, the new realities of strategy, how to lead in times of great change, how to develop new information sources for effective decision-making, and how individual workers must assume responsibility for managing their own careers. With his trademark keen insight and his ability to see connections among disparate forces, this visionary thinker has again produced an essential book for all libraries, especially academic collections.Dale F. Farris, Groves, TX
Kirkus Reviews
The master of management theory (Managing for the Future, 1992, etc.) combines a succinct vision of what's ahead with a condensed training course for weathering the change. Looking toward the future, Drucker analyzes the forces that will impact society and business and describes how the structure of organizations must change in order to deal with them. As a prelude to his outline for managing change (and changing management) he dismisses some concepts—for example, the idea that there is only a single correct organizational structure for a given situation. Drucker suggests considering the modern employee as a "volunteer," motivated to work by a deeper power than the paycheck. Similarly, he states that in the modern workplace a more apt role for a manager is as "leader," not boss. Other changes affecting business are the "crisscross" impact of technologies and the emergence of the "transnational" organization. Like most of Drucker's two dozen or so previous works, this one goes beyond analysis to application. Two of the key arguments in his outline for action: companies need "change leaders" who see change as opportunity, and organizations must learn how to "exploit success." Information technology, a major component of the coming century, is described through the historical perspective of the printing press, then updated with consideration of the Internet, a major new method for the distribution of information in printed form. Drucker believes that, just as traditional management was instrumental in increasing productivity for manual work, modern management must be transformed to play a similar part in the increase in the productivity for "knowledge work," the biggestmanagement challenge of the next century. Finally, he explains that as "individuals can expect to outlive organizations," they must have unique responsibilities in order to survive, if not thrive. Invaluable advice for building a business bridge to the 21st century.

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Chapter One

Management Is Business Management

For most people, inside and outside management, this assumption is taken as self-evident. Indeed management writers, management practitioners and the laity do not even hear the word "management"; they automatically hear BUSINESS MANAGEMENT.

This assumption regarding the universe of management is of fairly recent origin. Before the 1930s the few writers and thinkers who concerned themselves with management -- beginning with Frederick Winslow Taylor around the turn of the century and ending with Chester Barnard just before World War II -- all assumed that business management is just a subspecies of general management and basically no more different from the management of any other organization than one breed of dogs is from another breed of dogs.

The first practical application of management theory did not take place in a business but in nonprofits and government agencies. Frederick Winslow Taylor (1856-1915), the inventor of "Scientific Management," in all probability also coined the terms "Management" and "Consultant" in their present meaning. On his calling card he identified himself as "Consultant to Management" -- and he explained that he had intentionally chosen these new and strange terms to shock potential clients into awareness of his offering something totally new. But Taylor did not cite a business but the nonprofit Mayo Clinic as the "perfect example" of "Scientific Management" in his 1912 testimony before the Congress which first made the United States management-conscious.And the most publicized application of Taylor's "Scientific Management" (though aborted by union pressure) was not in a business but in the government-owned and government-run Watertown Arsenal of the U.S. Army.

The first job to which the term "Manager" in its present meaning was applied was not in business. It was the City Manager -- an American invention of the early years of the century. The first conscious and systematic application of "management principles" similarly was not in a business. It was the reorganization of the U.S. Army in 1901 by Elihu Root (1845-1937), Theodore Roosevelt's Secretary of War.

The first Management Congress -- Prague in 1922 -- was not organized by business people but by Herbert Hoover, then U.S. Secretary of Commerce, and Thomas Masaryk, a world-famous historian and the founding President of the new Czechoslovak Republic. And Mary Parker Follett, whose work on Management began at roughly the same time, never differentiated between business management and nonbusiness management. She talked of the management of organizations, to all of which the same principles applied.

What led to the identification of Management with Business Management was the Great Depression with its hostility to business and its contempt for business executives. In order not to be tarred with the business brush, management in the public sector was rechristened "Public Administration" and proclaimed a separate discipline -- with its own university departments, its own terminology, its own career ladder. At the same time -- and for the same reason -- what had begun as a study of management in the rapidly growing hospital (e.g., by Raymond Sloan, the younger brother of GM's Alfred Sloan) was split off as a separate discipline and christened "Hospital Administration."

Not to be called "management" was, in other words, "political correctness" in the Depression years.

In the postwar period, however, the fashion turned. By 1950 BUSINESS had become a "good word" -- largely the result of the performance during World War II of American business management. And then very soon "business management" became "politically correct" as a field of study, above all. And ever since, management has remained identified in the public mind as well as in academia with "business management."

Now, however, we are beginning to unmake this sixty-year-old mistake -- as witness the renaming of so many "business schools" into "schools of management," the rapidly growing offerings in "nonprofit management" by these schools, the emergence of "executive management programs" recruiting both business and nonbusiness executives or the emergence of Departments of "Pastoral Management" in divinity schools.

But the assumption that Management is Business Management still persists. It is therefore important to assert -- and to do so loudly -- that Management is NOT Business Management -- any more than, say, Medicine is Obstetrics.

There are, of course, differences in management between different organizations -- Mission defines Strategy, after all, and Strategy defines Structure. There surely are differences between managing a chain of retail stores and managing a Catholic diocese (though amazingly fewer than either chain stores or bishops believe); between managing an air base, a hospital and a software company. But the greatest differences are in the terms individual organizations use. Otherwise the differences are mainly in application rather than in principles. There are not even tremendous differences in tasks and challenges. The executives of all these organizations spend, for instance, about the same amount of their time on people problems -- and the people problems are almost always the same. Ninety percent or so of what each of these organizations is concerned with is generic. And the differences in respect to the last 10 percent are no greater between businesses and nonbusinesses than they are between businesses in different industries, for example, between a multinational bank and a toy manufacturer. In every organization -- business or nonbusiness alike -- only the last 10 percent of management has to be fitted to the organization's specific mission, its specific culture, its specific history and its specific vocabulary.

That Management is not Business Management is particularly important as the growth sector of a developed society in the 21st century is most unlikely to be business -- in fact, business has not even been the growth sector of the 20th century in developed societies. A far smaller proportion of the working population in every developed country is now engaged in economic activity, that is, in "business," than it was a hundred years ago. Then virtually everybody in the working population made his or her living in economic activities (e.g., farming). The growth sectors in the 20th century in developed countries have been in "nonbusiness" -- in government...

Management Challenges for the 21st Century. Copyright © by Peter F. Drucker. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

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The most important management thinker of our time.

Meet the Author

Peter F. Drucker is considered the most influential management thinker ever. The author of more than twenty-five books, his ideas have had an enormous impact on shaping the modern corporation. Drucker passed away in 2005.

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Management Challenges for the 21st Century 3 out of 5 based on 0 ratings. 2 reviews.
Anonymous More than 1 year ago
Guest More than 1 year ago
This book certainly contains useful information for the aspiring manager, and the manager aspiring to be better. Unfortunately much of the wisdom contained in the book is difficult to disseminate due to the author's overly complicated writing style.