Professional Documents
Culture Documents
From Druckers Lost Art of Management Joseph A. Maciariello and Karen E. Linkletter
A Virtuous Society
Importance of a moral, upright populace was a prominent theme during the American Revolution. Intellectuals viewed the revolution in moral as well as political terms. New republic had to learn lessons from Europes past. We must try not fall into trap of decadence leading to downfall of Rome
Legitimacy of Power
Constitutional debates in context of their recent experience with Great Britain and Revolutionary War. The entire question of legitimacy of authorityhow authority should be appropriately wielded in the new government.
Sovereignty
Nature of sovereignty had been one of the primary disputes behind the American Revolutionidea of sovereignty became established in British political thought after the Revolution of 1688. American revolutionaries began to argue that true sovereignty lay within the people. Governmental authority was to be restricted to certain arease.g., by the creation of a Bill of Rights.
Separation of Power
Separation of powers into different unitsexecutive, legislative, judicial and checks and balances on each unitpart of early American government . This prevented concentration in hands of one or a few individuals. Separation of powers in the Constitution was the Founders means of acknowledging the importance of human nature, and not just organizational structure. Same separation of powers in constitution and charters of decentralized organizations.
Like Federalists Drucker sought to design blueprint for society that would curb the worst tendencies in humankind & liberate peoples potential for good. The Framers wrestled with designing a framework for governance, just as Drucker struggled to find a model of a tolerable society for a modern industrialized world.
Following Federalism, Drucker addressed his work on management to people of virtue: Legitimate power and authority Sovereignty Separation of powers Principles of Corporate Federalism* Principle of subsidiary Principle of interdependence Coordinated controls and corporate governance
General Motors
Corporate Federalism Example
General Motors as an essay in federalismon the whole, an exceedingly successful one: What made it a successful essay on federalism? It attempts to combine the greatest corporate unity with the greatest divisional autonomy and responsibility; and like every true federation, it aims at realizing unity through local self-government and vice versa *diversity through responsibility+ (Drucker, 1946, p. 46).
Federal Decentralization
To give autonomy, one must have confidence. And this requires controls that make opinions unnecessary. To manage by objectives, one must know whether goals are being reached or not, and this requires clear and reliable measurements.
Management by Objectives & Self-Control*
Clear objectives & appropriate performance measures allow top management to independently evaluate performance of persuasive personalities and charismatic leadersdealing with potential negative effects of charisma
Distributed Work & Checks and Balances when Organizing Top Management
Turnover of CEOs of 2,500 largest global companies set a record in 2005. Rate of failure suggests unworkable job widow maker. Hints as to direction restructuring of CEO position. Three person top-management team allow each member of team to provide candid advice, and checks and balances on CEO.
Provide visibility of team to Board of Directors & provide checks and balances on conduct of CEO.
These steps are essential to the principles of corporate federalism and constitutionalism.
Board of Directors is needed to assume fiduciary responsibility, organize work and perform their duties effectively.
The current position of a Board Member in US also unworkableneeds restructuring.
Adapted from Ira M. Millstein, Holly J. Gregory and Rebecca C. Grapsas Six Priorities for Boards in 2006, Law and Governance, March 2006, Vol. 10, No. 3., pp. 17-19; with assistance from Professor Cornelius de Kluyver.
Adapted from Ira M. Millstein, Holly J. Gregory and Rebecca C. Grapsas Six Priorities for Boards in 2006, Law and Governance, March 2006, Vol. 10, No. 3., pp. 17-19; with assistance from Professor Cornelius de Kluyver.