Management: The Problems of Success (Keynote Address at 50th Anniversary Meeting of the Academy of Management, Chicago, Illinois, August 14, 1986) hirty years after City Manager Luther Gulick ap- ied management principles to the running of a municipality, the Federal Government, which had grown out of control in the New Deal years, was finally organized more effectively. It was not until 1950 and 1951, that is, more than 10 years later, that similar management concepts and principles were systemati- cally applied in a business enterprise to a similar task: the reorganization of the General Electric Company af- ter it had outgrown its earlier, purely functional organ- ization structure. Today, surely, there is as much \"management outside of business as there is in businessmaybe more. The most management-conscious of our present institutions is probably the military, followed closely by the hospital. Half the clients of a typical manage- ment consulting firm are nonbusinesses: government agencies, the military, schools and universities, hospi- tals, museums, professicnal associations, and commu- nity agencies like the Boy Scouts or the Red Cross, In- creasingly, holders of the advanced degree in business administration, the MBA, are the preferred recruits for careers in city management, in art museums, and in the Federal Government's Office of Management and Budget. Yet most people still hear the word business when they hear or read the word management. Man- agement books outsell all other nonfiction books on the best-seller lists, yet are normally reviewed on the busi- ness page. And while one graduate business school af- ter another renames itself the School of Management, the degree they award has remained the Master of Business Administration. Most management books, whether for college classes or the general reader, deal mainly with business and use business examples or business cases. By Peter F. Drucker and one clerk, which figures so prominently in Charles Dickens's popular books, For one, the new business enterprisethe long- distance railroad that developed in the United States after the Civil War, the \"Universal Bank" that devel- oped on the European continent at the same time, the \"Trusts\" such as U. S. Steel, which J. P. Morgan forged in this country at the turn of the twentieth cen- turywere not run by owners. Indeed, there were no owners, but shareholders. To accommodate the new business enterprise, a new and different legal person had to be invented: the corporation. In the \"corpora- tion,\" shares become a claim to profits rather than property. And capital is provided by large numbers of outsiders, each of whom holds only a minute fraction of the total and none of whom necessarily has any inter- est in ora totally unheard of circumstanceany lia- bility for the conduct of the business. 'This new corporation could not be explained away as a reform, which is how the new army, the new university, and the new hospital presented themselves. If, clearly was a genuine innovation. And this innova- tion soon came to provide the new jobs, at first for the rapidly growing urban proletarians and then for edu- cated people as well. It soon came to dominate the economy. What in the older institutions could be ex- plained as different procedures, different rules, became in the new institution a new function: management. And this. function invited study, it invited attention and controversy. But even more extraordinary and un- precedented was the position of this newcomer in soci- ety. It was the first new autonomous institution in many hundreds of years, the first power center in soci- ety in hundreds of years that was independent of the central government of the national state. This was an offense, a violation of everything the nineteenth cen- tury 'Donside'r\"ed (nndA the twentieth-century political For modern society has become a society of orga- nizations. The overwhelming majority of all people in developed societies are employees of an organization; they derive their livelihood from the collected income of an organization, see their opportunities for career and success primarily as opportunities within an organ- ization, and define their social status largely through their position within the ranks of an organization. In- creasingly, especially in the United States, the only way an individual can amass property is through the pension fundthat is, through membership in an organization. In a society of organizations, managing becomes a social function and management the constitutive, the determining, the differential organ of society. The New Pluralism The society of organizations, then, is a pluralist society. The dogma of the \"liberal state,\" still taught in our university departments of government and in our law schools, says that all organized power is vested in one central government. (The clearest modern formula- tion of this dogma is the \"Pure Theory of Law,\" which the Austro-American jurist and philosopher, Hans Kel- sen, developed in the 1920s, to worldwide renown.) However, in open defiance of the prevailing dogma, so- ciety contains a diversity of organizations and power centers.! The institutions of today's New Pluralism, though, are very different from those of the Old Plural- ismthe princes and feudal barons, the free cities, the artisans, the religious institutions of Medieval Europe and Japan. Those institutions acted as separate gov- ernments. They levied taxes, for example, and estab- lished churches and schools. The purpose of today's pluralist institutionsto 'make and sell goods and services, to protect jobs and wages, to heal the sick, to teach the young, and so onis nongovernmental. Each exists to do something that is different from what government doesor to do something so that government need not do it. The institutions of the New Pluralism have no purpose except outside of themselves. They exist in contemplation of a \"customer\" or a \"market.\" Achieve- ment in the hospital is not a satisfied nurse, but a cured ex-patient. Achievement in the business is not a LA bk e b Lk - society's resourcesland, raw materials, money, and, above all, highly trained and highly educated people and they need a considerable amount of power over people, coercive power at that. It is only too easy to forget that in the not-so-distant past, only slaves, low- level servants, and convicts had to be at the job at a time set for them by someone else. This institution hasand has to havepower to hestow or to withhold social recognition and economic rewards. Whichever method we use to select people for assignments and promotionsappointment from above, selection by one's peers, even rotation among the jobsthese are always power decisions made for the individual on the basis of impersonal criteria re- lated to the organization's purpose. The individual is at the mercy of a power grounded in the value system of whatever specific social purpose the institution has been created to satisfy. And the organ through which this power is exercised in the institution is the organ we call \"management.\" The features of the New Pluralism immediately raise a question: Who takes care of the Common Weal when society is organized in individual power centers, each of which is concerned with a specific goal rather than with the common good? Each institution in a pluralist society sees its own purpose as the central and the most important. Indeed, it cannot do otherwise. The school, for instance, cannot function unless it sees teaching and research as the tools that make a good society and good citizens. Surely nobedy chooses to go into hospital administra- tion or into nursing unless he or she believes in health as an absolute value. And, as countless failed mergers and acquisitions attest, no management will do a good job running a company unless it believes in the product or service the company supplies, and unless it respects the company's customers and their values. Yet each of these \"missions'" is one, and only one, dimension of the common good. They're important, yes; indispensable, perhaps; yet a relative rather than an absolute good. As such they must be limited by, bal- anced with, and often subordinated to, other considera- tions, Somehow the common good must be made to emerge out of the clash and clamor of special interests. Can the New Pluralism do this? One solution is, of course, to suppress the pluralist institutions. The total- itarian state, whether it calls itself Fascist, Nazi, Stalinist, or Maoist, makes all institutions subservient to and extensions of the state (or of the omnipotent A Social Function and Organ Why is this so? Simply, the business enterprise, though not the first of the managed institutions, did not evolve gradually out of traditional organizations as the others did, but represented a fairly radical and highly visible development. No one could possibly have mistaken the new business enterprise, as it arose in the third quarter of the nineteenth century, for a direct continuation of the old and traditional \"business firm\"the \"counting house\" with two elderly brothers their autonomy only if they and society altogether are rendered unable to perform, such as through Stalin's \"purges\" or Mao''s \"Cultural Revolution.\" The opposite approach to that of the totalitarian state is the American system. Each of the \"interests\" in the United States is free to pursue its own goals re- gardless of the common good; it is indeed expected to do so. The American pluralist doctrine is, however, hardly adequate. Indeed, just as the Old Pluralism did, the New Pluralism has given birth to so many vested interests and pressure groups that it is almost impossi- ble to conduct the business of government, let alone to conduct it for the common good. For the past two years, almost everyone in the United States has agreed that the country needs a drastic tax reformwith a few tax rates, and with exemptions eliminatedto re- place an increasingly complicated and irrational tax code. Congress had a tough time enacting such a-code this past year. Although not a drastic change, a new tax law was signed into law October 1986. The tax laws therefore have undergone change. Yet, vested interests will remain, no doubt, just in different forms. Is there a way out? The Japanese seem to be the only ones so far able to reconcile a society of organiza- tions with the pursuit of the common good. The major Japanese interests are expected to take their cue based on what is good for the country. They are expected to SUBHLISIS SLUI LUNSIUTI) WIE W UL SWIY ang, frankly, a scandal. By now, almost a hundred years after manage- ment arose in the early large business entreprises of the 1870s, it is clear that management pertains to every single social institution. In the last hundred years every major social functioncaring for the sick, education, and defense, for examplehad become lodged in a large and managed organization. The identification of management with business can thus no longer be maintained. Management has become the pervasive, the universal organ of a modern society. February, 1987 e e must have legislative powerthat is, power grounded in something transcending the organization that is ac- cepted as a genuine value, if not a true absolute, by those subject to the power. Such values have included \"Descent from the Gods\" or \"Apostolic Succession,\" the \"Consent of the Governed,\" popular election, or what is so valued by so much of modern society, the magical \"advanced degree.\" If power is an end in itself, it becomes despotism, which is both illegitimate and tyrannical. Here we encounter a puzzle. Management of the key institutions of our society of organizations is by and large accepted as legitimate. The single exception is the management of the business enterprise. Indeed, society is often more concerned with the survival of a large business or an industry than it is with that of any other single institution. And desperate atternpts are made to salvage a major business in trouble. But at the same time, business enterprise is suspect. Any exercise of management power is denounced as \"usurpation,\" with cries from all sides for legislation or judicial action to curb, if not suppress altogether, managerial power. One commen explanation is that the large busi- ness enterprise wields more power than any other insti- tution. But this simply does not hold water. Not only is business enterprise hemmed inby government and Srappy e auRuy s v e satisfied customer who reorders the produ All institutions of the New Pluralism, unlike those of the Old, are single-purpose institutions. They are tools of society to supply one specific social need, whether it be making or selling cars, giving telephone service, curing the sick, teaching children to read, or providing benefits checks to unemployed workers. To make this one specialized contribution, they need a considerable measure of autonomy: they need to be or- ganized in perpetuity, or at least for long periods of time; they need to dispose of a considerable amount of management has of itself and presents to its society. In Japanese law, as in American and European law, man- agement is the servant of the stockholders; the reality is that the behavior of Japanese big business manage- ment (even in companies that are family-owned and family-managed, like Toyota) is that management is an organ of the business itself. Management is the servant of the \"going concern,\" bringing together in a common interest a number of constituencies: employees first, then customers, then creditors, and finally suppliers. Stockholders are only a special group of creditors, rather than \"the owners\" for whose sake the enterprise exists. Of course, as their performance shows, Japanese businesses are not run as philanthropies. They know how to obtain economic results. In fact, the Japanese banks, which are the real powers in the Japanese econ- omy, watch economic performance closely and move in on a poorly performing or lackluster top management much faster than do the boards of Western publicly held companies. But the Japanese have institutional- ized the \"going concern\" and its values through \"life- time employment,\" under which the employee's claim to job and income comes first, unless the survival of the enterprise itself is endangered. fnm mmnnnnbe maal nenhlame Academy of Management EXECUTIVE e \"Party\"), stripping away all free thought and expression. The State (or the \"Party\") is then indeed the only power center, as traditional theory preaches. But it can maintain its monopoly on power only, as Lenin was first to realize, if it is based on naked terror. And even at that horrible price, it does not really work. As we all knowand the experience of all totalitarian re- gimes is exactly the same, whether they call themselves \"rightist\" or \"leftist\"pluralist institutions persist be- hind the monolithic facade. They can be deprived of By now it has become accepted widelyexcept on Wall Street and among Wall Street lawyersthat the hostile takeover is deleterious and in fact one of the major causes of the loss of America's competitive posi- tion in the world economy. One way or another, the hostile takeover will be stopped. No matter how, the solution will have tackled the problem of management legitimacy. We know some of the specifications for the solu- tion. First, the performance of a businessits market standing, the quality of its products or services, and its performance as an innovatormust be safeguarded. And financial performance must be controlled. If the takeover boom has taught us one thing, it is that man- agement must not be allowed substandard financial performance. Somehow the various \"stakeholders\" also have to be brought into the management process. And some- how the maintenance of the wealth-producing and job- producing capacities of the enterprisethat is, the maintenance of the \"going concerns\"needs to be built into our legal and institutional arrangements. It should not be too difficult. After all, we built the pres- ervation of the \"going concern\" into our bankruptecy laws all of 90 years ago when we gave it priority over all other claims. including the claims of the creditors. Japanese interests are expected to take their cue based on what is good for the country. They are expected to fit what will benefit them into the framework of a pub- lic policy designed to serve the national interest. It is doubtful, however, whether even Japan can long main- tain this approach. It reflects a past in which Japan saw itself as isolated in a hostile and alien worldso that all of its interests had to hang together lest they hang separately. Will this approach have a chance in the West, where interests have traditionally been ex- pected to behave as interests? Some will ask, \"Is this a problem of management? Is it not a problem of politics, of government, or politi- cal philosophy?\" But if management does not tackle it, then political solutions will almost inevitably be im- posed. When, for instance, the health-care institutions in the United States did not take responsibility for spi- raling health-care costs, the government imposed such regulations as the Medicare restrictions for the care of the aged in hospitals. And these rules clearly do not benefit health care at all; in fact, they may even be det- rimental to it. They are designed to serve short-run fis- cal concerns of government and employersthat is, to substitute a different but equally one-sided approach for the one-sided, self-centered approach of the health- care interests, This must be the outcome unless the manage- ments of the institutions of the New Pluralism see it as their job to reconcile concern for the common good with the pursuit of the special mission for which their institution exists. The Legitimacy of Management To be effective in any way, however, management. 15 SuLLL LUl s By uLes LU WAL 18U ULy 1S business enterprise hemmed inby government and government regulations, by labor unions, and so onin exercising its power; but the power of even the largest and wealthiest business enterprise is insignificant next to that of the university, now that a college degree has become a prerequisite for access to any but the most menial jobs. The university and its management are often criticized; but their legitimacy is rarely ques- tioned. The large labor union in western European and U. S. mass-production industries surely holds more power than any single business enterprise there or here. But even its most bitter crities rarely question the union's legitimacy. Another explanationthe prevalent one these daysis that the managements of all other institutions are \"altruistic,\" whereas business is \"profit seeking,\" \"out for itself,\" and \"materialistic.\" But even if, for many people, \"non-profit\" is virtuous and \"profit\" du- bious, the explanation that profit undermines the legit- imacy of business management is hardly adequate. In all Western countries the legitimacy of owners and their profits is generally accepted. Yet professional management obtains profits for other people rather than for itselfand its main beneficiaries today are the pension funds of employers. And then there is the situation in Japan. In no other country, not even in France or in Sweden, was the intellectual climate of the post-war period as hos- tile to profit as in Japan, at least until 1970 or so. The left-wing intelligentsia of Japan in the universities or the newspapers might have wanted to nationalize Ja- pan's big businesses, but it never occurred even to the purest Marxist among them to question the necessity of management or its legitimacy. The reason clearly lies in the image that Japanese the enterprise itself is endangered. The Japanese formulation presents real problems, especially now that rapid structural change in technol- ogy and economy demand labor mobility. Still, the Japanese example indicates why management legiti- macy is a problem in the West. Business management in the West (and, in particular, business management in the United States) has not yet realized that our soci- ety has become a society of organizations, of which 'management is the critical organ. Thirty years ago or so, when the serious study of management began, Ralph Cordiner, then CEO of the (American) General Electric Company, tried to reformulate the responsibility of corporate top manage- ment. He called it the *'trustee for the balanced best interest of stockholders, employees, customers, suppli- ers, and plant communities\"the group that would later be called \"stakeholders\" or \"constituencies.\" As a slogan this caught on fast. Countless other American companies wrote it into their \"corporate phi- losophy\" statements. But neither Mr. Cordiner nor any of the other chairmen and presidents who embraced his rhetoric did what the Japanese have done: institu- tionalize their professions. They did not determine what the \"best balanced interest\" of these different \"stakeholders\" would be, how to judge performance against such an objective, and how to create accounta- bility for it. The statement remained a good intention, and good intentions are not enough to make power legitimate. Underlying the wave of hostile takeovers that has been inundating the American economy these last few yearsand is spilling over into Europe nowis the be- lief that the business enterprise exists solely for the sake of stockholder profits, and short-run, immediate profits at that. 16 laws all of 90 years ago when we gave it priority over all other claims, including the claims of the creditors. Closely connected to the problem of management legitimacy is management compensation. To be legitimate, management must be accepted as a professional occupation. While professionals have always been paid well and deserve to be paid well, it has always been considered unprofessional to put money ahead of professional responsibility and profes- sional standards. This means there must be limitations on managerial incomes. It is surely not \"professional\" for a chief executive officer to give himself a bonus of several million dollars when the pay of the company's other employees is being ut by 30% as the chief ex- ecutive officer of Chrysler did a few years ago. It is surely not professional for employeeswho are not ownersto pay themselves salaries and bonuses greatly in excess of what their own colleagues in the organization receive. And it is not professional to pay oneself a salary and bonus so far above the norm that it creates social tension, envy, and resentment. Work is needed on the preparation, testing, and selection of, and on the succession to, the top manage- ment jobs in the large business enterprise; on the struc- ture of top management and the institutional arrange- ments for monitoring and enforcing them. Business must also determine what its \"social re- sponsibilities\" areand what they are not. Surely busi- like any organization or persen, for that mat- teris responsible for its impacts. Responsibility for one's impacts is, after all, one of the oldest tenets of the law. And surely business is in violation of its re- sponsibilities if it allows itself impacts beyond those necessary to and implicit in its secial purpose, which is to produce goods and services. To overstep these limits constitutes a \"tort,\" that is, a violation. But what about problems that do not result from an impact or any other activity of business and yet constitute grave social ills? Clearly it is not a responsi- bility of business, or of any organization, to act where it lacks competence. But it can act in areas in which it has competence to treat social problems. When New York City was on the verge of self-destructien in the late 1960s and early 1970s, a small group of senior ex- ecutives of major New York business enterprises mo- bilized the business community to reverse the down- ward slide. Is there a message in this? There surely is a chal- lenge. For management of the big business to attain full legitimacy while remaining \"private,\" it will have to accept that it has a social, a \"public,\" role and function. The Job as Property Right That social role applies to its relationship to its employees. Consider, for example, that in 1985 a fair- size Japanese company found itself suddenly threatened by a hostile takeover bid made by a group of American and British \"raiders,\" the first such bid in recent Japanese history. The company's management asserted that the real owners of the business, and the only ones who could possibly sell it, were not the stock- holders, but the employees. This was considerable ex- aggeration, to be sure. But it is true that the rights of the employees to their jobs are the first and overriding claim in a large Japanese company, except when the business faces a erisis so severe that its very survival is at stake. 'To Western ears, the Japanese company state- ment sounded very strange. But actually the United States, and the West in general, may be as far along in making the employee the dominant \"interest\" in busi- ness enterprise as is Japan. All along, of course, the employees' share of the revenues of a business, almost regardless of its size, has exceeded what the owners can possibly hope to get. It ranges from four times as large (that is, 7% for profits post-tax, against 25% for wages and salaries) to 12 times as large (that is, 5% for prof- its versus 60% of revenues for wages and salaries). The pension fund greatly increased the share of the reve- nues that go into the \"wage fund\" to the point that in poor years the pension fund may claim the entire profit and more. Moreover, American law now gives the pen- sion fund nriority aver tha atnekholdere and their States is not the union contract or laws mandating sev- erance pay, as it is in many European countries. The vehicle i3 the lawsuit. First came the suit alleging dis- crimination on grounds of race, sex, age, or handicap in the hiring, firing, promotion, pay, or job assignment of an employee. But increasingly these suits do not even allege discrimination: they allege violation of \"due process,\" claiming that the enjoyment of a job and its fruitswhich include pay and any promotions ex- pectedcan be diminished or taken away on the basis of pre-set and objective standards and through an es- tablished process that includes an impartial review and the right to appeal. This is how property has been treated in the history of the law. And as few manage- ments yet realize, in practically every such suit the plaintiff wins and the employer loses. This develop- ment was predictable. Indeed, it was inevitable. And it is irreversible. It is also not \"novel\" or \"radical.\" What gives access to a society's productive resources gives ac- cess thereby to a livelihood and to social function and status and constitutes a major, if not the major, avenue to economic independence. This independence, how- ever modest, has always been a \"property right\" in Western society. And this is what the job has become, especially the knowledge worker's job as a manager or a professional. We still call land \"real\" property. For until quite recently it was land alone that gave 95% or more of the population what property gives: access to, and control over, society's productive resources; access to a liveli- hood and to social status and function; and, finally, a chance at \"estate\" (the term itself meant, at first, a land holding) and, with it, economic independence. In today's developed societies, however, all but 5 or 10% of the population gain access to and control over productive resources and access to a livelihood and to social status and function by being an employee of an organization. For highly educated people the job is practically the only access route. Ninety-five percent or more of all people with college degrees will spend their entire working lives as employees of an organiza- tion. The modern organization is the first, and so far the only, place where we can put large numbers of highly educated people to productive work and pay them for applying knowledge. For the great majority of Americans, moreover, the pension fund at their place of employment is their only access to an estatethat is, economic indepen- Aonee Ru tha tima tha main henadmdueas abion Moo the initiative in this development and shape this new property right so it equally serves the employee, the company, and the economy. Above all, we need to maintain flexibility of employment. We need to make it possible for a company to hire new people and increase its employment. And this means we must avoid the noose the Europeans have put around their necks with severance pay mandates, making it so expensive to lay off anybody that companies simply do not hire. That Belgium and Holland have such extraordinarily high unemployment is almost entirely the result of these countries' severance pay laws. Whichever way we structure this new property right, there will be several requirements that every em- ployer will have to satisfy. First, there must be objec- tive and equal performance standards for everyone per- forming a given job, regardless of race, color, sex, or age. Second, to satisfy the requirements of \"due pro- cess,\" performance appraisals will have to be reviewed by truly disinterested parties. Finally, \"due process\" demands a right of appeal (something, by the way, as \"authoritarian\" a company as IBM has had for more than half a century). The evolution of the job into a \"property right\" changes the position of the individual within the or- ganization. It will change equally, if not more, the posi- tion of the organization in society for it will make clear what at present is still nebulous: organized and man- aged institutions have increasingly become the organs of opportunity, of achievement, and of fulfillment for the individual in a society of organizations. H Conclusion In the next 50 years there is still important work ahead for the schools of management, management journals, and practicing managers themselves. Organi- zation structures are changing rapidly under the im- pact of information. Indeed, we now know that a good deal of what traditionally have been considered parts of a structure in organization theoryespecially man- agement \"levels\"are nothing but information relays rapidly being made redundant by information technol- ogy and information concepts. We also know that an information-based organization is likely to center in groups of professional specialists rather than in mana- gerial generalists. 'We know that the organization is rapidly shifting from one of manual workers to knowledge workers. But we know pitifully little about managing knowledge And despite all the research done on motivation in the last 50 years, we really so far know very much about how to quench motivation and very little about how to kindle it. There is work needed on how the multinational must be set up, organized, and directed in a rapidly changing world economy. We now know that manage- ment is a \"culture\" in itself and, as such, transcends national boundaries. Yet it has to be compatible with and supportive of distinct national cultures. 'While there is thus a great deal to be learned in traditional management areas, the major challenges are new ones, well beyond the field of management as we commonly define it. Indeed, it will be argued that the challenges I have been discussing are not management challenges at all, but belong in political and social the- ory and public law. Precisely. The success of management has not changed the work of management, but it has greatly changed its meaning. Its success had made manage- ment the general, the pervasive function and distinct organ of our society of organizations. As such, manage- ment inevitably has become affected with the public interest. To work out what this means for management theory and management practice will constitute the management problems of the next 50 years. Peter F. Drucker is a management con- sultant specializing in economic and business policy and in top management organization. He has been a consultant to several of the largest U.S. and foreign companies; to agencies of the U.S. Government and several foreign govern- ments, such as Japan and Canada; and to pub- lic service institutions such as universities and hospitals. Dr. Drucker has been Clarke Profes- sor of social science and management at Clare- mont Graduate School in Claremont, California since 1971. From 1950 to 1972, he was professor of management at the Graduate Business Schoel at New York University, where he still serves as Distinguished University Lecturer. Dr. Drucker is a fellow of the American Association for the Advancement of Science, an honorary member of the National Academy of Public Administration, and o Fellow of the American Academy of Arts and Sciences, among others. In addition to the numerous awards he has received from various associa- tions and institutions, Dr. Drucker has 15 hon- poor years the pension fund may claim the entire profit the pension fund at their place of employment is their from one of manual workers to knowledge workers. But awards he has received from various associa- and more. Moreover, American law now gives the pen- only access to an estate-that is, economic indepen we know pitifully little about managing knowledge tions and institutions, Dr. Drucker has 15 hon- sion fund priority over the stockholders and their dence. By the time the main breadwinner, white collar workers and knowledge work, about productivity with orary doctorates from American and foreign proper rights in a company's liquidation, a provision or blue collar, in the American family is 45 years old, knowledge work, and about organizing knowledge work, universities and orders from the governments of way beyond anything Japanese law and custom give to the claim to the pension fund is likely to be the fam- integrating it, and measuring it. Austria and Japan. His doctorate in public and the Japanese worker. ily's largest asset, exceeding in value by the far the Above all, the West, with the United States in the family's equity in the home or such personal belongings lead, is rapidly converting the individual employee's as an automobile. job into a new property right-at the very time, para- Thus the job had to become a property right-the doxically, at which the absolute primacy of stockholder only question was in what form and how fast.' short-term rights is being asserted in and by the hostile Working things like this out through lawsuits may takeover. be as American as apple pie, but it is hardly as whole- The vehicle for this transformation in the United some. There is still a chance for management to take 18 17 February, 1987 Copyright of Academy of Management Executive is the property of Academy of Management and international law is from Frankfurt University ENDNOTES its content may not be copied or emailed to multiple sites or posted to a listserv without the in Germany. 1. The most recent and best-known formula of the copyright holder's express written permission. However, users may print, download, or email Besides being an editorial columnist for American pluralist doctrine is the book that first made John the Wall Street Journal, Dr. Drucker is the au- Kenneth Galbraith famous, his American Capitalism, New articles for individual use. thor of many books and articles on manage- York: Houghton Mifflin, 1956, with its theory of "counter- ment, economics, and business in general. His vailing powers." Also, see my essay, "Calhoun's Pluralism," books, which have been translated into more in my book Men, Ideas and Politics, New York: Harper & than 20 languages, include his most recent Row, 1971. ones, Innovation and Entrepreneurship (New 2. For additional thoughts on the evolution of the job York: Harper & Row, 1985) and Frontiers of into a "property right" and the subsequent effect on the posi- tion of the individual within the organization, see Chapter 31 Management (New York: E. P. Dutton, 1986). of my book, The Changing World of the Executive, New York: Truman Talley/Times Books, 1982