Read: What is Management, and Management as a Liberal Art,

Recalling that yourtext defines Quantitative Analysis as a management science, and within that concept, describes the Quantitative Analysis Approach as the process for solving problems and making management decisions, compare and contrast Drucker's MLA concepts with those of the QA Approach described in your textbook.

22 MANAGEMENT AS A SOCIAL FUNCTION AND LIBERAL ART Management as a Social Function and Liberal Art 23 are "adversaries" or "mutually exclusive." Both are always needed and at the same prevail-and only too often dismantle or loot the going concern, sacrificing long- time. And both have to be coordinated and work together. Any existing organiza- hinge, wealth-producing capacity to short-term gains. tion, whether a business, a church, a labor union, or a hospital, goes down fast if it Management-and not only in the business enterprise-has to be accountable does not innovate. Conversely, any new organization, whether a business, a church, for performance. But how is performance to be defined? How is it to be measured? a labor union, or a hospital, collapses if it does not manage. Not to innovate is the How is it to be enforced? And to whom should management be accountable? That single largest reason for the decline of existing organizations. Not to know how to manage these questions can be asked is itself a measure of the success and importance of is the single largest reason for the failure of new ventures. management. That they need to be asked is, however, also an indictment of man- Yet few management books paid attention to entrepreneurship and innovation, agers. They have not yet faced up to the fact that they represent power-and One reason was that during the period after World War II when most of these power has to be accountable, has to be legitimate. They have not yet faced up to books were written, managing the existing, rather than innovating the new and the fact that they matter. different, was the dominant task. During this period most institutions developed along lines laid down clearly thirty or fifty years earlier. This has now changed WHAT IS MANAGEMENT? dramatically. We have again entered an era of innovation, and it is by no means But what is management? Is it a bag of techniques and tricks? A bundle of ana- confined to "high tech" or even to technology generally. In fact, social innovation- lyrical tools like those taught in business schools? These are important, to be sure, as this book tries to make clear-may be of greater importance and may have a just as a thermometer and anatomy are important to the physician. But the evolu- much greater impact than any scientific or technical invention. Furthermore we tion and history of management-its successes as well as its problems-teach that now have a "discipline" of entrepreneurship and innovation (on this see my book management is, above all else, a very few, essential principles. To be specific: Innovation and Entrepreneurship [19851). This discipline is clearly a part of manage- ment and indeed rests on well-known and tested management principles. It applies 1. Management is about human beings. Its task is to make people capable of joint to both existing organizations and new ventures, and to both business and non- performance, to make their strengths effective and their weaknesses irrelevant. business institutions, including government. This is what organization is all about, and it is the reason that management is the critical, determining factor. These days practically all of us, especially educated THE ACCOUNTABILITY OF MANAGEMENT people, are employed by managed institutions, large and small, business and non- Management books tend to focus on the function of management inside its organi- business. We depend on management for our livelihoods. And our ability to con- zations. Few yet accept its social function. But it is precisely because management tribute to society also depends as much on the management of the organization in has become so pervasive as a social function that it faces its most serious challenge, which we work as it does on our own skills, dedication, and effort. To whom is management accountable? And for what? On what does management 2. Because management deals with the integration of people in a common ven- base its power? What gives it legitimacy? These are not business questions or eco- ture, it is deeply embedded in caliare. What managers do in West Germany, in nomic questions. They are political questions. Yet they underlie the most serious as- Brimin, in the United States, in Japan, or in Brazil is exactly the same. How they sault on management in its history, a far more serious assault than any mounted by do it may be quite different. Thus one of the basic challenges managers in a devel- Marxists or labor unions: the takeover. An American phenomenon at first, it has oping country face is to find and identify those parts of their own tradition, his- spread throughout the noncommunist developed world. What made it possible was tory, and culture that can be used as management building blocks. The difference the emergence of employee pension funds as controlling shareholders of publicly between Japan's economic success and India's relative backwardness is largely ex- owned companies. The pension funds, while legally "owners," are economically plained by the fact that Japanese managers were able to plant imported manage- "investors"-and, indeed, often "speculators." They have no interest in the enter- ment concepts in their own cultural soil and make them grow. prise or its welfare. In fact, in the United States, at least, they are "trustees" and are 3. Every enterprise requires commitment to common goals and shared values. not supposed to consider anything but immediate pecuniary gain. What underlies Without such commitment, there is no enterprise. There is only a mob. The enter- the takeover bid is the postulate that the enterprise's sole function is to provide the prise must have simple, clear, and unifying objectives. The mission of the organiza- largest possible immediate gain to the shareholder. In the absence of any other justi- tion has to be clear enough and big enough to provide common vision. The goals fication for management and enterprise, the takeover firms with their attractive bids that embody it have to be clear, public, and constantly reaffirmed.24 MANAGEMENT AS A SOCIAL FUNCTION AND LIBERAL ART Management as a Social Function and Liberal Art Management's first job is to think through, set, and exemplify those objectives, Management is thus what tradition used to call a liberal art: "liberal" because values, and goals. is deals with the fundamentals of knowledge, self-knowledge, wisdom, and leader- 1. Management must also enable the enterprise and each of its members to chip, "art" because it is practice and application. Managers draw on all the knowl- grow and develop as needs and opportunities change. Every enterprise is a learning uige and insights of the humanities and the social sciences-on psychology and and teaching institution. Training and development must be built into it on all philosophy, on economics and history, on ethics as well as on the physical sciences. levels-training and development that never stop. What they have to focus this knowledge on effectiveness and results-on healing a 5. Every enterprise is composed of people with different skills and knowledge sick patient, teaching a student, building a bridge, designing and selling a "user- doing many different kinds of work. It must be built on communication and on indi- friendly" software program. vidual responsibility. All members need to think through what they aim to For these reasons, management will increasingly be the discipline and the prac- accomplish-and make sure that their associates know and understand that aim. the through and in which the "humanities" will again acquire recognition, im- All have to think through what they owe to others-and make sure that others pact, and relevance. understand. All have to think through what they, in turn, need from others-and make sure that others know what is expected of them. SUMMARY 6. Neither the quantity of output nor the "bottom line" is by itself an adequate Managers have been agents of transformation, converting the workforce in devel- measure of the performance of management and enterprise. Market standing, inno- oped countries from one of manual workers to one of highly educated knowledge vation, productivity, development of people, quality, financial results-all are workers, This has been accomplished by applying knowledge to work. Manage- crucial to an organization's performance and to its survival. Nonprofit institutions, ment brings human effort from all disciplines together in a single organization and too, need measurements in a number of areas specific to their mission. Just as a therefore has become a new social function. As such the discipline and practice of human being needs a diversity of measures to assess its health and performance, an management is important to the effectiveness of all of society's institutions. In organization needs a diversity of measures to assess its health and performance. carrying out its function, management relies on knowledge from the humanities, Performance has to be built into the enterprise and its management; it has to be sicial sciences, and technology. As such, management is a liberal art in the truest measured-or at least judged-and it has to be continuously improved. sense and a discipline wherein the liberal arts find relevance and usefulness. 7. Finally, the single most important thing to remember about any enterprise is that results exist only on the outside. The result of a business is a satisfied customer. The result of a hospital is a healed patient. The result of a school is a student who has learned something and puts it to work ten years later. Inside an enterprise, there are only costs. Managers who understand these principles and manage themselves in their light will be achieving, accomplished managers. MANAGEMENT AS A LIBERAL ART Thirty years ago, the English scientist and novelist C. P. Snow talked of the "two cultures" of contemporary society. Management, however, fits neither Snow's "humanist" nor his "scientist." It deals with action and application; and its test is its results. This makes it a technology. But management also deals with people, their values, their growth and development-and this makes it a humanity. So does its concern with and impact on social structure and the community, Indeed, as has been learned by everyone who, like this author, has been working with managers of all kinds of institutions for long years, management is deeply involved in spiritual concerns-the nature of man, good and evil