Drucker's Lite - Summary Notes Based on Management: Task, Responsibilities and Practices

Management Tasks

1.     Performing the specific purpose and mission of an organization by achieving its objectives

2.     Making work productive and the worker achieving

3.     Managing social impacts and social responsibilities

Note: Management has to consider time dimension in performing tasks - both present and future, short and long run demand, performance, factors of production (human, financial, physical resources), existence and relevance in society

Management by Objectives (MBO)

·         Process of defining objectives within an organization so that management and employees agree to the objectives and understand how their activities relate to the achievement of the organization

·         Important features and advantages of MBO includes

o    Motivation – involving employees in the whole process of objective setting and
increasing employee empowerment

o    Clarity of objectives – can be translated into specific target and assignments

o    Better communication and coordination – frequent reviews and interactions
between superiors and subordinates helps to maintain harmonious relationships and also to solve many problems

MBO Strategies

·         Every organization needs to think through the question “What is our business and what should it be?” to define the purpose of an organization

·         From the definition of its mission and vision an organization must derive objectives in a number of key areas

·         It must balance these objectives against each other and against the competing demand of today and tomorrow

·         It needs to convert objectives into concrete strategies and to concentrate resources on them

·         It also needs to think through its strategic planning i.e., the decisions of today that will make the business of tomorrow

Purpose of Organization

·         Prerequisite to derive mission, vision and thus objectives

·         First identify who are the customers

·         Deciding “What is our business?” is a genuine decision that must consider divergent views to have a chance to be a right and effective decision. It is a choice between alternatives, each based on different assumptions on the reality of the field (e.g., rail transportation) and its environment. It’s a high-risk decision that could lead to changes in objectives, strategies, organization and behavior.

·         Discussion of alternative views enable management group to be cognizant of fundamental differences in the group to understand what motivate each manager and his/her behavior

·         A sole method to define an organization is to answer the question from customers’ point of view

·         Note on economic performance (profit requirement): in business enterprise economic performance is the rationale and purpose, but for non-business/service organization it’s a constraint to perform its activities and achieving its objectives

Vision & Mission (from Wikipedia)

·         Vision statement defines the desired or intended future state of an organization in terms of its fundamental purpose

o    a long term view, sometimes describing how the organization would like the field in which it operates to be

·         Mission statement defines the fundamental purpose of an organization, succinctly describing why it exists and what it does to achieve its Vision

Objectives

·         Objectives are strategies

·         Objectives with only lofty, good intentions are worthless

·         Objectives must be able to be translated to work activities, measurable performance targets and specific assignments of accountability

·         Objectives determine the structure of an organization, the key activities which must be discharged, and allocation of people to tasks

·         However, objectives are not fate; they are direction, not commands, but commitments

o    Objectives are based on expectations and informed guesses associated with factors beyond an organization’s control

·         Objectives must be correlated with specific activities with commitment of key people to work on each activity

o    This implies not only that somebody is supposed to do the job, but also accountability, a dateline, and finally the measurement of results

MBO Trap

·         Critics say that MBO is difficult to implement, and that organizations often wind up overemphasizing control, as opposed to fostering creativity, to meet their objectives

·         Drucker’s advice:

o    objectives are not fate; they are direction, not commands, but commitments