Management Challenges for the 21st Century by Peter F. Drucker
The book management challenges for the 21st Century by Peter F. Drucker is a future overlook into management thinking and practice. The book has two major areas of concern that is the changes in the world economy and a change in the management practices. Therefore, Drucker talks about the available mechanism that can be used by the executives in the reaction to the changes that have occurred. This is through the provision of policies that can be adapted to respond to the changes. Drucker tries to evaluate the challenges that executives in the field of management have endured throughout the 20th century. Out of the analysis, he comes up with a set of new assumptions that should be adopted by management in the 21st century.
According to Drucker the challenges that executives face is as a result of keeping up with the old assumptions. Currently, management should be able to keep track of every situation that is likely to influence the function of the organization. The realities currently cannot be solved using the old assumption since they are no longer useful and hence management should be able to have new strategies. These kind of strategies are useful not only for business institution s but also in areas such as government institutions, health care facilities.
The other old assumptions that the book brings into the discussion is on the leadership in the organization and management of employees. The writer believes that the idea of a hierarchy in the organization and that employees should be managed a paradigm that is no longer useful. It is thus important for organizations to have their system of leadership rather than relying on the same system of leadership which may not apply to all organizations. Organizations should also shift from the management of employees to focusing on leading. This is because leading is of employees through systems like rewards this provides motivation and inspiration.
Drucker in the first chapter of the book brings into discussion management techniques available under management as a social discipline and as a practice. In management, as a discipline, the key assumptions are that managements is for business and that has a common organizational structure and a way of managing employees. As practice management is based on the assumptions of provision of technology and markets, legally defined scope, internal focus on the management and finally on the national boundaries defining the economy. These assumptions are no longer considered useful and did not focus on the reality. Therefore, it is necessary to have new strategies and assumptions for management as a social discipline.
These strategies identified by Drucker which identified the need for a balance between sensing and intuition which are key in the perception of present realities. These assumptions are:
• Management is for all the organizations both the profit and non-profit organization
• Leading rather than management of people is the best means.
• No organization can be said to be right and hence used as an example.
• Technologies markets and end users are not given.
• The scope of the management is not defined legally and that the concern and responsibilities of the management are what affects the performance of the management.
With the assumptions strategies are necessary for its performance. These strategies should put into consideration the social and political certainties rather than the economic ones. These include a decline in birthrate, a shift in income distribution, competitiveness in the global world. The strategic models should be able to reflect on the performance.
Drucker identifies that it is not possible for organizations to be able to succeed going into the future by defining their scope based on national boundaries. It is therefore important for the organizations to be able to adapt working in different atmospheres. Other economic considerations that companies should have in mind is the currency instability and therefore calls for a purpose to identify the management of instabilities about currency and foreign exchange fluctuations.
Besides the economic, political and social issues businesses should be aware of the opportunities available and those that are a distraction. Expansion of the business geographically can be a business opportunity as well as a distraction especially if it is not in line with the company’s strategy and goals.
A decline in birth rate and a change in the distribution of income also have their implications. Institutions and organization in the world have an assumption that the population growth will continue. This is likely to go wrong, and demand labor may change over the years due to a decline in the birth rate especially in developed countries. It is therefore important for management to be prepared for such kind of scenario where the young population is diminishing. With time, the labor force will be on such a demand that companies will have to devise a mechanism that they will keep their workers and attract new employees.
Income distribution, on the other hand, has an impact on individuals and companies due to a shift over the years. Therefore, management should focus on products that are positively impacted by a shift in the income. Income disposal has been mainly on healthcare and normal goods. The income drift will also determine the decisions that companies take their products. Negative drift in income means that companies have to lower their prices.
To have changes required, a change in the leader is of concern to have a change in the organization. Throughout the structural changes in the organization, change leaders survive and therefore to change the leadership the following is essential. Systematic anticipation for a change, formulation of new policies geared for the future, deciding on the best way to introduce policy changes and a mechanism to balance the changes to ensure continuity. Balance in management is necessary since people in the organization may have a different way in which they adapt and respond to the change.
A manager or a leader is the person responsible for whether the organization will move forward or stumble. Change leaders look for changes and solutions to these changes. To adopt change leaders should be able to take a risk by testing the probability of success in case of a change. While conducting a test, there are various options to consider depending on the outcome of the test. Once the best option has been agreed upon action or abandonment of the idea follows suit. Products, services or systems that are no longer in service or are outdated should be abandoned. Besides testing and carrying out analysis, change leaders should brave for improvement and creation of new alternatives to management. In case of a product, the quality should continuously be improved and if the possible creation of a different brand or form of the product.
Challenges in the organization is another concern in Drucker’s book. Changes in information have had an impact on the way management carried out in the 21st century. Revolution in information technology involving data collection, storage, transmission, and presentation has had an influence. With the changes in information availability and collection calls for a change in paradigms from the old paradigm. According to Ducker, the data collected cannot be considered as information until it is organized in a meaningful manner. He goes on to identify the mechanisms of organizing data which includes, focus on the events that performance is of great concern, use probability to make an identification of events outside the normal distribution source, screening of data using the threshold phenomenon to identify the significance, give some attention to unusual events and determine their significance and having a neutral opinion from outsiders is important.
The presence of outside information is to ensure that there is no bias since employees in the organization may provide misinformation due to a need to meet target or close books. The challenges facing information is mainly within. Rumors and misinformation are normally pioneered by those working within the organization, especially the dissatisfied employees.
The other main issue the Drucker discusses is the knowledge- productivity of the worker. This is by reviewing the productivity of manual worker over the 20th century and the need to define methods whereby the knowledge-worker productivity may be improved going forward into the 21st century. The revolution in the efficiency of manufacturing is attributed to Frederick Winslow Taylor’s. Taylor emphasized on an integration of the workers to ensure control over the manufacturing process thus the quality of the product. According to Drucker the key major factors for knowledge-worker productivity going ahead into the future revolves around the following factors;
• The task to be performed
• The knowledge that workers have to be able to manage themselves.
• Continuity of innovation
• Continuous learning by workers.
• Focusing on quality rather than quantity of production
• Treating workers as assets rather than costs being incurred.
With the desire to replace the old paradigms with new ones, the need for integration of workers according to Taylor’s principles is quite essential. Traditional systems did not have a solution to the increasing the productivity of the manual workers. Workers productivity was thought to be as a result of the laziness or the hard work of the worker, but he is not the case now in the 21st century where productivity of a worker can be enhanced.
Managing oneself is another issue that is of concern in this book. Individuals in the workplace have to try and manage themselves to have a positive contribution towards the organization. Individuals are normally faced with some concerns which include identification of the strengths and weaknesses. Normally individuals usually get it wrong in identifying the where their strengths and weaknesses lie and as a result, they get it wrong. This is normally due to ignoring information that’s outside their area of concern and considering it irrelevant. The best technique for determining where your strengths and weaknesses lie is through the analysis of the outcomes from the decisions made. This mechanism is also useful in identifying the areas that you lack knowledge on
Performance evaluation is another key issue in individual management. Individuals should be able to identify the best way they can be able to carry out tasks besides the normal system learn in school. Evaluation of the learning style is an initial step towards the practical performance of the task. Analysis of individual values is necessary before taking actions on them. These values should be such that one is proud of them not only as a person but on the impact those values have on others.
The book management challenges for the 21stcentury is quite essential for organizations going into the future. It is quite crucial especially for workforce getting into management, and it provides and insight into how they should handle challenges coming their way. The rapid changes in the world mean that a need for changes in the management paradigms to keep pace with the changes. Drucker provides directions on how challenges that come up with the new changes in the social structure should be handled.
Drucker, Peter. Management challenges for the 21st century. Routledge, 2012.