LEADERSHIP & MANAGEMENT
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MANAGEMENT AND ECONOMIC DEVELOPMENT

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There are no 'underdeveloped countries'. There are only 'undermanaged' ones

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By Peter F. Drucker
June 06 - 12, 2005
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Management creates economic and social development. Economic and social development is the result of management. It can be said, without too much oversimplification, that there are no 'underdeveloped countries'. There are only 'undermanaged' ones. Japan a hundred and forty years ago was an underdeveloped country by every material measurement. But it very quickly produced management of great competence, indeed, of excellence.

This means that management is the prime mover and that development is a consequence. All our experience in economic development proves this. Wherever we have only capital, we have not achieved development. In the few cases where we have been able to generate management energies, we have generated rapid development. Development, in other words, is a matter of human energies rather than of economic wealth. And the generation and direction of human energies is the task of management.

ACTION POINT: What impact does your company have in the developing world? Are your activities there raising the managerial standards of local companies?

Ecological Vision.

FAILURE OF CENTRAL PLANNING

"Any society in the era of the new technology would perish miserably were it to run the economy by central planning."

The new technology will greatly extend the management area; many people now considered rank-and-file will have to become capable of doing management work. And on all levels the demands on the manager's responsibility and competence, her vision, her capacity to choose between alternate risks, her economic knowledge and skill, her ability to mange managers and to manage worker and work, her competence in making decisions, will be greatly increased.

The new technology will demand the utmost in decentralization. Any society in the era of the new technology would perish miserably were it to attempt to get rid of free management of autonomous enterprise so as to run the economy by central planning. And so would any enterprise that attempted to centralize responsibility and decision making at the top. It would go under like the great reptiles of the saurian age who attempted to control a huge body by a small, centralized nervous system that could not adapt to rapid change in the environment.

ACTION POINT: Do you micromanage your employees? Start empowering them by making sure they are trained properly to do their jobs, and then give them responsibility to do it. Provide room for failure.

The Practice of Management.

 

 

BUSINESS WISDOM

"Organise for the next day at the end of the previous day. This is what gives me peace of mind at night, a feeling that I am on top of things, and a real excitement about coming into work the next morning. Simply by arranging the next day defining on paper what I want to accomplish I feel that I have a head start."

Mark H. McCormack, Americansports marketing consultants, founder and CEO of International Management Group, and author.

"What's the difference between a leader and a manager? Leader know the best course of action, while managers only know the best way to follow it."

ANON

"He who has never learned to obey cannot be a good commander."

ARISTOTLE (384-322BC), Greek Philosopher. Politics (4th century BC)

"Leadership is all about taking. Followers take orders, leaders take charge."

ANON

"Management is doing things right; leadership is doing the right things."

Peter Drucker and Warren Bennis. American academics and authors. Quoted in Stephen R. Covey, The 7 Habits of Highly Effective People (Simon & Schuster, New York, 1989).

"Effective negotiation persuade their counterparts. They understand that it is usually more persuasive to convince the other side than the given result would be fair rather than convince by stubbornness. Arguing about what they will or won't do creates a contest in which the other side knows that stubbornness will be rewarded. That is not an incentive we would like to create for either side. We would like both parties to be open to new ideas. We are not saying 'be fair to be nice,' or even 'be fair to produce a fair agreement.' Those are possible by-products. We are suggesting that criteria of fairness are valuable as a sword to persuade others and as a shield to protect ourselves from being unfairly treated."

(Roger Fisher, American law professor at Harward Law school, conflict management consultant and author, and Danny Ertel, American dispute resolution counsellor, columnist and author. Getting ready to negotiate).

"If you want ten days of happiness, grow grain. If you want ten years of happiness, grow a tree. If you want hundred years of happiness, grow people."

(Harvey Mackay, American business executive, CEO of Mackay Envelope company, motivator and author.)

"I never think of the future. It comes soon enough."

Albert Einstein (1879-1955), German-Swiss-American Physicist.