Saturday, August 18, 2007

Drucker and Values

Rick Wartzman, director of the Drucker Institute, on what the Chinese need to learn from the late and great Peter Drucker. An excerpt:

Earlier this summer, I took part in a symposium at Claremont Graduate University in California, where a group of Chinese entrepreneurs expressed serious concerns that in the eyes of far too many young people in their country, becoming rich and being ethical are somehow mutually exclusive.

The occasion for this gathering, which drew attendees from 10 different nations and all over the U.S., was to discuss the work of the late Peter Drucker, the renowned management philosopher who held that "free enterprise cannot be justified as being good for business; it can be justified only as being good for society."

Drucker, who died two years ago at age 95, was no starry-eyed sloganeer. And he sure wasn't against making money. "Actually," he wrote, "a company can make a social contribution only if it is highly profitable."

[Need I add that many American entrepreneurs require the same message?]


Anonymous said...

Question - do you believe that countries such as China, who are driven to produce more at cheaper prices, are not also driven by those same desires here in the US?

How much of our own quality of goods - including the quality of our food chain - here in the US has been compromised this way?

I've been seeing it for years here in my own industry (graphic arts) where service and quality are distant seconds and thirds to price.

This monster is ours as much as it is China's and other countries like it.

But I guess that the the true cost of something produced at the lowest possible price is just not bitter enough. Not yet anyway.

Michael Wade said...

China may be driven by the same desires but it has a very different system. Its industries don't have anything close to the amount of regulation that American and European nations impose and since its businesses are essentially government sponsored, it lacks the restraints that occur in a system where government and business are separate entities. Within the American system, quality can vary heavily depending on the industry, the competition, and the regulation. If you are manufacturing birth control pills you'll encounter far more oversight than if you're making door stops. Furthermore, China does not have a tort system in which personal injury lawsuits can indirectly lead to the checks and double-checks that are found in the American system. There may be similar desires, but compared to the United States, China is the Wild West.

Anonymous said...

Maybe I'm just being overly cynical - but the fact that the manufacturing venue overseas is less regulated and less restrictive is what leads us there and also what supports it. Less regulation/oversight = cheaper cost of goods.

As long as profit is the sole driving force, consumers will always be at risk.

And countries like China will continue to prosper with deadly consequences even for its own population.

Therein lies another question - can you truly, and successfully, regulate quality?

I guess it depends on the definition of success.

(PS - Do you really believe that those lead tainted toys will be destroyed? Or resold in another country with a less restrictive environment? Who'll take corporate responsibility for that decison?)

Michael Wade said...

I've seen organizations that are no-nonsense when it comes to enforcing high ethical standards and who have taken serious financial hits in order to maintain those standards. I've also seen places that are cesspools. If the top management ranks are filled with people who are willing to split hairs and exploit technicalities with an army of lawyers, then the laws and regulations will only go so far.