Management Challenges for the 21st Century by Peter F. Drucker

Published: 2021-06-29 06:41:22
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In the book, Management Challenges for the 21st Century, by Peter F. Drucker, discusses the challenges and evolution of business management based on past, current and future impacts of culture, society, people and style of work.   Drucker communicates his ideas in six functional areas, Management’s New Paradigm’s, Strategy-The New Certainties, The Change Leader, Information Challenges, Knowledge-Worker Productivity and Managing Oneself.   Drucker’s view is business is in a transitional period and the best practices that have been developed from the mid-19th Century to about 1980, will not necessarily support future corporate management practices or structures.  Drucker adds that the realities of today’s business requires a “reversal” of traditional practices and mentality to support today’s individuals and organizations.   Businesses need to adopt a new direction to address challenges arising from global business integration, workplace diversity, socioeconomic impacts and the transition from manual to knowledge based workforce heading into the 21st Century and beyond.Prior to 1980, the philosophy of business management was, “there is-or there must be- one right way to manage people”, “there is-or there must be-only one right organizational structure”, and “management is business management”.  Drucker goes to state that these philosophies have outlived their usefulness and need to be replaced with new paradigms due to the integration and evolution of our global society.  Drucker suggests new management paradigms are emerging and that management of business does not just apply to business but to other organizations such as university, civil service, or medical.  Each business must evaluate, develop, and determine the best structure that fits the task of that organization. Also, today’s management needs to understand the environment in and around the organization, driven by domestic/international business units, staff demographics, culture, politics, and needs of external customers to develop and lead people instead of managing people to achieve corporate results.  This leads to businesses needing to develop new strategies based on changing needs of the 21st century.Drucker communicates that there are five “phenomena” that will impact future business performance and they are the declining birth rate, change in disposable income, new definition on how to define performance, global competitiveness, and the incompatibility between economic and political reality.     These phenomena pose risk to global businesses and governments alike and each entity needs to evaluate its situation and make the appropriate adjustments to be successful in the future.   The declining birth rate among industrialized countries such as, Japan, Germany and the United States poses risk without precedent to businesses and an assessment of aging and reduced future workforce will need to be evaluated to determine corporate structure in support of continued economic growth and stability.  Another impact is the global competitiveness.  Drucker says, In today’s global economy, if any business expects to survive or thrive, “it must measure itself against the standards set by leaders in its field anywhere in the world”.   Finally, global business needs to manage itself on a global platform perspective.  This requires organizations to understand the impacts to key business metrics based on currency fluctuation, the results of trade policies like North American Free Trade Agreement or the potential Trans Pacific Partnership, and ability to build alliances or partnerships to minimize investment and maximize efficiency and profit.  For example, the Nissan Renault Alliance was meant to drive maximum efficiency through the strengths of both organizations by utilizing common platform and components to reduce investment and provide quick and effective decision making process, resulting in a more efficient business model.  This leads to the next topic of the challenge to lead.

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