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『Management』- Tasks, responsibilities, practices(1973)
／ Peter F.Drucker
(Collins Business, p.810)
■Part 1 - THE TASKS
5. Managing a Business: The Sears Storys
Even more important as a lesson from the Sears story
is the knowledge that the right answers are not the result
of brilliance or of “intuition.” Richard Sears had both –
and failed. The right answers are the result of asking the
right questions. And this in turn requires hard , systematic
work to understand what a business is and what “our”
6. What is a Business?
Another conclusion is that a business cannot be defined
or explained n terms of profit. Asked what a business is,
the typical businessman is likely to answer, “An organization
to make a profit.” The typical economist is likely to give
the same answer. This answer is not only false, it is irrelevant.
The prevailing economic theory of business enterprise and
behavior, the maximization of profit – which is simply a
complicated way of phrasing the old saw of buying cheap
and selling dear – may adequately explain how Richard Sears
operated. But it cannot explain how Sears, Roebuck or any
other business enterprise operates, nor how it should operate.
The concept of profit maximization is, in fact, meaningless.
To know what a business is we have to start with its purpose.
Its purpose must lie outside of the business itself.
In fact, it must lie in society since business enterprise is an
organ of society. There is only one valid definition of business
purpose: to create a customer.
The customer is the foundation of a business and keeps it
in existence. He alone gives employment. To supply the wants
and needs of a consumer, society entrusts wealth-producing
resources to the business enterprise.
Because it purpose is to create a customer, the business
enterprise has two- and only these two – basic functions:
marketing and innovation. Marketing and innovation produce
results; all the rest are “costs.”
“Who is the customer?”
What is value for him?
How does he buy?
And what does he need?”
Outside of manufacturing, transportation, and mining, e.g.,
in distribution, finance, insurance, and the service industries,
the increase in productivity has been caused primarily by the
replacement of labor by planning, brawn by brain, sweat
What, then , is managing a business?
It follows from the analysis of business activity as the creation
of a customer through marketing and innovation that managing
a business must always be entrepreneurial in character. There
is need for administrative performance, But It follows the
entrepreneurial objectives, Structure follows strategy.
↑Thank You for One Click
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