Customer Reviews
Discussion of the executive's information tools
Peter F. Drucker, born in 1918, is probably the 20st Century's greatest management thinker. He was Professor at New York University and is currently Professor at the Graduate Management School of Claremont University, California. This article was published in the January-February 1995 issue of the Harvard Business Review.
"Ever since the new data processing tools first emerged 30 to 40 years ago, businesspeople have both overrated and underrated the importance of information in the organization." This article deals with the tools executives require to generate the information they need and the concepts underlying those tools. Drucker discusses the shift from traditional cost accounting to activity-based costing; the shift from cost-led pricing to economic-chain costing; and the shift from cost control to wealth creation. Then, Drucker discusses the executive's diagnostic tools for managing the current business: foundation information (cash-flow, liquidity projections and standard ratio measurements), productivity information (EVA and benchmarking), competence information (innovation, innovative performance), and resource-allocation information (return on investment, payback period, cash flow, discounted present value). The author also makes suggestions on possibilities to improve strategic information systems. Grandmaster of Management Drucker eventually concludes that the traditional mind-set of buying cheap and selling dear has to be replaced by the new approach of adding value and creating wealth.
Again a great article from Peter Drucker. He describes in clear, understandable language the shifts in information tools and techniques in the last 50 years. He also provides clear insights in how to use the different kinds of information and what they can do for you. I recommend this article to all people interested in management. I also recommend it to MBA-students, for which it is handy for their accounting classes. The author uses simple US-English.
