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Peter Drucker

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thelion Posted: Fri, Sep 16 2011 6:10 AM

I've been told to read all his books by a manager, who swears by his stuff.

 

Is it worth it? I saw online that he wrote in 1930's for "austrian economist" newspaper.

I have only read Managing for Results, in order to write a paper on cost accounting mathematics, but have not read anything else of his.

I see he has a book "end of economic man." Is any of this other stuff worth reading?

 

Is it useful?

 

I just wasted good bit of time reading Kant in German and was totally disappointed, when I stumbled upon such nonsense as his Theory of Rights: where he says government gets its authority from god because of implicit consent of all people, and no matter what government does with its authority, he says, people thus should not ever punish people in gov't....

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When your Kant

And you rant

How the govt can't

do wrong,

Toos the book

by that crook

in the brook

where it belongs

My humble blog

It's easy to refute an argument if you first misrepresent it. William Keizer

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I've never read any of Drucker's stuff, but from what I know about him and the quotes I've heard by him, I always assumed he was a Warren Buffett-type.  Although, I had never heard anything about this "Austrian Economist" newspaper...however I wouldn't be surprised if that didn't exactly mean the same thing in the 30s as it does today.

I would say a decent rule of thumb is to read Drucker for the same reason you might read Buffett.

 

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thelion replied on Fri, Sep 16 2011 3:57 PM

Warren Buffet wrote books?

 

Just read today (1) "concept of corporation" and part of his long book (2) "management."

 

"Managing for Results" wanted to substitute "transaction cost accounting" in terms of "units" of factors of production for "cost accounting" in terms of money.

This is was sheer nonsense, as Mises showed in 1920. There is no such manner of comparing opportunity costs except in money terms, because quantitative comparison means common denominator.

I had criticized that in paper. Otherwise, he seemed to recognize in big way that sovereignty and worth of products depends only on judgments of consumers. This was correct, at least.

 

These two books however are simply full of total nonsense, turns out. He thinks managment is some sort of linear programming (minus the math) of "opportunities." There is even defense of planning in USSR, as if managment is same in all places, private property or not!

 

How did he believe in consumer sovereignty then, if managment is same even outside free market society?

 

(1) Tries to defend premise that "regulation" is good for big business, and that this is not tendency to socialism. That's false, however: it is part of socialism, because it is politically changes prices, through its restrictions of company behaviour.

(2) is full of nonsense like this:

“economist's traditional view of development as function of savings and capital investment is not adequate. Indeed, savings and capital investment do not produce management and economic development. Management produces economic and social development, and with it savings and capital investment." (Drucker 1974:13).

 

Eh? In what way are people in Africa (or his example Latin America) going to manage their way to development without savings? Out of what are they going to produce things that consumers can buy?

 

At least he's not a marxist...

Do they really teach this stuff in business schools?

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Wheylous replied on Fri, Sep 16 2011 4:52 PM

Are you kidding me? Regulations are some of the most pro-business things out there. How much more favoritism could government give to an established business than by requiring fledgling competitors to obtain licenses?

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bbnet replied on Fri, Sep 16 2011 7:07 PM

Drucker is highly respected by many modern managers, he helped Japan recover from the war, but I've always preffered the style promoted by Phil Crosby.

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And we are not sent here by the politicians you drink with - L. Dube, rip

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thelion replied on Sat, Sep 17 2011 6:29 AM

I'll check out Crosby. Thanks for advice.

 

As for Drucker, he's just apparently some kind of social democrat. Anyway, more gems of nonsense:

 

(i) “To make elimination of any ‘external’ impact into business opportunity shou1d always be attempted, but often, eliminating any ‘external’ impact means increasing costs of business. What was ‘externality’ for which general public paid becomes business cost. Therefore it becomes competitive disadvantage unless everybody in industry accepts same rule. This, in most cases, can be done only by regulation—that means by same form of public action. Whenever an impact cannot be eliminated without an increase in cost, it becomes incumbent upon management to think ahead and work out the regulation which is most likely to solve the problem at the minimum cost and with the greatest benefit to public and business alike. And it is then management’s job to work at getting the right regulation enacted. Management—and not only business management—has shunned this responsibility. The traditional attitude has always been that “no regulation is the best regulation.” But this applies only when an impact can be made into a business opportunity. Where elimination of an impact requires a restriction, regulation is in the interest of business, and especially in the interest of responsible business.” (Drucker 1974:334).

BUT Nonsense: there are no externalities in any objective way that could justify regulation. If someone cared what color my underwear is would be externality, and require “regulation.” Anything that is regulation in business is usually excuse to act on prejudice against something.

 

(ii) “It is not possible to disregard demand for social responsibility, as such distinguished economists as Milton Friedman of Chicago have urged. There is danger that social responsibility will undermine economic performance and with it society altogether. Social responsibility cannot be evaded. It is not only that the public demands it. It is not only that society needs it. The fact remains that in modern society there is no other leadership group but managers. If the managers of our major institutions, and especially of business, do not take responsibility for the common good, no one else can or will. Social impacts and social responsibilities have to be managed” (Drucker 1974:325).

BUT There is no such thing as collective will, nor social responsibility, i.e., responsibility in respect to social will or collective preference independent of individual people.

 

(iii) “Manager is, indeed, 'entrepreneur' and responsible for directing vision and resources toward greatest results and contributions” (Drucker 1974:17).

BUT Nonsense: entrepreneur receives profit himself, because he undertook action given uncertainty using his own property. The manager receives wage, so he never receives profits, and can only give advice the entrepreneur. At the end of the day, it is entrepreneur who decides which manager to hire or fire, and thus, what decisions, given uncertainity to make, even if manager is one who had made decisions! If stockholders don't care, and hire any manager presented to them, then yes, they are poor quality entrepreneurs and should not be surprised when they lose money.

 

 

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