MANAGING IN TURBULENT TIMES

Some directives for business and institutional managers, some global-think for the Executive Board. As of 1980, Drucker sees 25 years of predictable economic growth at an end, and new strategies called for. "Managing in turbulent times must begin with the adjustment of the enterprise's figures to inflation"; financial strength must be put before earnings; the decline of productivities (capital, time, knowledge, physical resources) must be reversed. The costs of staying in business are real costs, Drucker reasonably concludes, regardless of "record profits." Looking ahead (with some retrospective pats on the back), he broadens his scope. "Major technological changes" will allow businesses to be larger or smaller—and, properly, either leaders in a large market or specialists "preempting a small ecological niche" (for the untenability of an in-between position, witness Chrysler). But the great "sea-change" that Drucker anticipates is the result of population dynamics—a prospective labor shortage in the developed world coupled with an incipient labor surplus in the developing world. His answer is universal "production sharing": concentrating labor-intensive stages of production in the developing world. The objections to this trend—which range from the shrinkage of entry-level blue-collar jobs in the U.S. (see Levison, in the 3/1 issue) to the upping of underemployment in developing nations (see Hewlett, below)—have no place in Drucker's business-oriented picture. (He can't, for instance, see that Youngstown, Ohio's, redundant steel-workers have a problem: three years after the closing of their big mill, most of them were working—even if not for as much money, "and a good many part time.") But for his constituency, he's a reliable guide also to other trends—notably, growing economic intergration vis-Ã -vis growing political fragmentation and the smart business response (world-oriented management, a low profile, little local investment). And anyone puzzled by last year's Nobel prizes in economics will learn that Pittsburgh's Herbert Simon won his for showing that managers try to find minimum acceptable solutions—solutions that neither optimize nor maximize results, but "satisfice." So much, too, for Drucker's latest go at managing the world from a swivel chair: it satisfices.