I chose the article “The Concept of the Corporation” because it helps me understand the basic principles that makes a company work effectively. It also explains the role and function of large corporations in modern society. In the article, Drucker looks at the political, social and economic principles behind the organization structure itself. Drucker’s love and passion for management can be seen by the way he observes things because he studied every aspect of the organization in depth in order to fully understand the small details behind the organization structure itself. Peter Drucker is also known as the “Father of Modern Management Theory” because his leadership terms and strategies are still used today.
Drucker grew up in a generation when business enterprise developed as an independent large institution. Back then this type of institution was either ignored by all economists or treated as a diversion. He describes large organizations as a pyramid with a group of generals at the top, who made all the decisions, and a large number of illiterate soldiers underneath, who were trained to obey repetitious commands. Things are not the same today because now there are three groups in industrial society which include the “workers,” (people who work with their hands despite their job being skilled or unskilled), the “managers,” and third, a growing group of employed professionals. Unlike the workers, these professionals work with their knowledge rather than with their hands. Some of the titles of these professionals include the engineers and accountants, scientists and salesmen.
Today, most people seem to fall under the large group of employed professionals’ category. For instance, engineers do not consider themselves “workers” even though they are employed. At the same time, they are not “bosses,” but they see themselves as “members of management.” I think this is because throughout the years, the total numbers of manual worker has been declining, while the professional middle class has been increasing. The employed professionals are promptly becoming representative and significant group both in business and our society.
The business corporation is the principal factor in the development of an organization. According to Drucker, the large business corporation, such as General Motors was the first organization with extensive knowledge. He believes that General Motors’ success mainly has to do with its management practices, especially its people-centric beliefs. This makes sense to me because Drucker has always believed that management was a practice. The job of someone who practices a specific field was to continually challenge the theory and redefine the meaning of the “what.” According to Drucker, the most powerful management skill in the 21st century is the ability to think carefully and quickly assess and modify “what” your corporation is doing. I agree with this principle because I think it is important to step back and reassess “what” your company is doing in order to make necessary changes for positive outcomes of the company. By failing to challenge the “what” of their business, many companies are backing away from asking their customers about what they value. I learned that this failure is the single greatest cause of corporate death.
In my opinion, getting the “what” right is very significant today because we live in the global information age where managers have unlimited access to real-time information. This information flow brings about change at an extremely fast speed unlike anything businesses have experienced in the past. Therefore, it is important for companies to challenge the “what” since everything around them is changing so fast. By redefining “what” the company should be doing, the company is opening the door to success and opportunities.
