Peter Drucker and Media Management


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Peter Drucker and Media Management

  2. 2. + What is business? - Prevailing theory says that the mission of business is “maximization of profit” - But Drucker says: “Profit is not the explanation or the cause of the business but rather the TEST of their validity” -  “To know what business is, we have to start with its purpose, which must lie outside -  of business itself, in fact must lie in society” “… business starts out with the needs, the realities and the values of the customer… It demands that business defines its goals as the satisfaction of the customer needs” CONCEPT I - THE CUSTOMER DEFINES THE BUSINESS
  3. 3. One thing in common in the entrepreneurial strategies discussed in the book: “They create customer and that is the ultimate purpose of business” It can be done in 4 ways: 01 Creating true Utility 02 Adapting to customer reality (social & economic) 03 Delivering true value to the customer 04 Pricing
  4. 4. Management: A Social Function + A modern organization's meaning of existence is to provide a specific service to society + “Performance of its function is the institution's first social responsibility” + Connection between authority and responsibility - Managers represent power → an impact is the result of an exercise of authority - Importance of accountability and business responsibility for performance and contribution CONCEPT II: THE SOCIAL ASPECT OF MANAGEMENT
  5. 5. + “Responsibility for social impacts is a management responsibility – not because it's a social responsibility, but because it is a business responsibility” - Social problems are major sources of opportunity - Solutions require optimal trade-off balance (costs and benefits) + Limits for social responsibility - When a problem would comprise or impair the business' performance capacity - When the demand goes beyond the institution's competence + Basic rule of public responsibility ethics: “not knowingly doing harm”
  6. 6. + Essence: Any organization, regardless of its size, can achieve entrepreneurship and innovation as long as the organisation’s philosophy points to that direction + Entrepreneurial behaviour should be promoted and celebrated + Innovative ventures should be organised as a separate business “One innovates only where one understands” CONCEPT III - INNOVATIVE ENVIRONMENT
  7. 7. The goal is to make productive the specific strengths and knowledge of each individual Innovation demands: “The task is to lead, not to manage, people!” Managers have to create a comfortable environment in which subordinates can develop and use their abilities Productive People for Innovation
  8. 8. CONCEPT IV - ENTREPRENEURIAL MANAGEMENT For a business to be innovative: + It has to create a structure that allows people to be entrepreneurial + It has to devise relationships that center on entrepreneurship + The innovative effort and the unit it carries, require different policies, rules and measurements in many areas
  9. 9. Entrepreneurial management has FOUR requirements 01 Market Focus 02 Plan for cash flow and capital need 03 Build top management team 04 Entrepreneur
  10. 10. SUCCESSFUL ENTREPRENEURSHIP DEMANDS + The managerial unit should never be mixed with entrepreneurial unit + Should use their own people to build the venture; people whom they understand, who understand them, people who they trust + “Innovation” had better not be “Diversification”. The benefits of Diversification shouldn’t be mixed with entrepreneurship and innovation
  11. 11. + A manager's performance has to aim upward - Focus on the whole: “the aims should reflect the objective needs of the business” + A manager's first responsibility is to develop and set objectives - Goals of the business enterprise are the foundations for the development of objectives - Objectives should reflect a manager's contribution to the company goals in all areas of the business CONCEPT V - MANAGEMENT BY OBJECTIVES
  12. 12. + Objectives: “fundamental strategy of a business; they must be operational; and they must facilitate concentration of resources and efforts” + 8 key areas: marketing, innovation, social responsibility, resources (human, financial, physical), productivity, profit requirements + “To manage a business is to balance a variety of needs and goals” + Objectives: Basis for design of business structure and for the working structure of units and managers + Keyed to both short-range and long-range considerations Business Objectives: The Key to Management
  13. 13. Why Management by Objectives? + Objectives define types of contribution: - Performance of the manager's own unit - Contribution of the manager's unit for other units - Contribution that manager can expect from other units + Objectives enable control of own performance: - They are directions, they are commitments, they are means to mobilize resources and energies of the business - Enable stronger motivation, higher performance goals and broader vision of managers
  15. 15. ASSUMPTIONS + Focus is placed on media organisations + Media Industries are defined by extreme competition + Inside the organisation there are only costs + The organisation’s business is located outside of the organisation + An organisation is a social entity
  16. 16. FRAMEWORK ANALYSIS Part I - The Goals MEDIA ORGANIZATIONS SHOULD AIM AT: - Creating a customer while - Assuming social responsibility SOCIAL RESPONSABILITY: WHY? - Fundamental role of media in society - Accountability is inherent in media - Media and public value creation (see Benington & Moore, 2011) - Media and normative responsibilities (see Christians et. al., 2009)
  17. 17. FRAMEWORK ANALYSIS Part II - Steps to Achieve the Goals The strive for INNOVATION should be placed in the spotlight by + Fostering and promoting an innovative working environment which: - Allows people to be creative - Supports innovative attempts/projects + Utilizing entrepreneurial management which places emphasis on - Strategic orientation - Commitment to opportunity/of resources - Control of resources - Management structure + Implementing management by objectives - Every manager in the hierarchy develops and sets objectives that: - Are centred on innovation - Define working structures - Are used as measures of (innovative) performance
  19. 19. + Commercial media and commitment to social responsibility + Public media and commitment to innovation + Public media and organisational resistance + Clashes between innovative and traditional projects + Resource allocation between innovative and traditional projects + Stakeholder’s willingness to assume the risks of innovation - Success is not guaranteed - Time/resource consuming - Successful results are to be expected in the long run CHALLENGES
  21. 21. Who is our customer? Customer Concept Content + Audience research, deep understanding of the customer by researching personal, social, cultural characteristics etc. - Example: Movie industry is heavily based on the age of the viewers + Value should not be confounded with quality - Example: Hollywood (the quality does not define the value) + Audience should be able to influence the content or quality of the media products + Existing, but not targeted customers/audience, may influence the concept and the content of a media product - Example: Uusi Päivä - "The New Day" at YLE
  22. 22. INNOVATION + Training and development opportunities for employees: prepare them for new trends and technologies - Example: VICE Media - Training employees to master movie and audio softwares to go beyond the production of the news itself and cut costs without affecting quality + Foster the interaction between journalists from different editorial offices and between content producers from different departments: learn from each other's experience - Example: News outlets merging their online and offline departments (e.g. Folha de São Paulo)
  23. 23. "Emphasize teamwork and team results" - Peter F. Drucker + Media companies should organize their teams/sectors within the production chain to become more innovative (design of products, marketing, etc.) and socially responsible - Examples: Apple - different teams responsible for distinct tasks. Independent work, same goals
  24. 24. The most social responsible industry: media employees shoulder a personal responsibility for impacts The content produced by the organisation is the carrier of social impacts + It should be generated within the norms of professional ethics + Employees should be supported and guided in ethics
  25. 25. + Diversity issues in focus: ethnic and sexual minorities Major media companies in multifaceted societies are expected to contemplate and represent minorities and marginalized groups - Examples: Latin American TV channels are constantly under pressure to include minorities (regional migrants, black people, gays) in their soap operas, sitcoms but also in their news programs
  26. 26. + Human Resources in search for diversity - Example: Bloomberg Businessweek (March 5, 2013) + Balance in frame-setting so that not to fuel conflicts depending on how they cover certain issues - Example: The population of Honduras has taken the streets of the country to complain about how CNN was covering the impeachment of the former president Manuel Zelaya
  27. 27. Environmental performance + Research determining the environmental impacts of its own print and online products + Provide information on the environmental effects of the various types of media and the responsibilities the user has to influence them + Encourage to recycle (can reduce the carbon footprint of a print paper by one fifth) Example: AlmaMedia - Research, detailed evaluation and monitoring Of the environmental impacts of its own operations!
  28. 28. 1. According to Drucker, a manager is responsible for social impacts "not because it is his social responsibility, but because it is the responsibility of the business". Is it applicable to a media company? Journalists and media specialists should act in compliance with a professional code of ethics. Aren’t they responsible because it is their social responsibility? 2. Social responsibility as a marketing tool? Where do you draw the line? 3. How can you reconcile clashes between traditional and innovative projects? QUESTIONS:
  29. 29. REFERENCES - Drucker, Peter. (2007). The Essential Drucker, NY: Routledge - Benington , J., & Moore, M. (2011). Public Value: Theory and Practice. Hampshire : Palgrave Macmillan. - Christians , C., Glasser, T., McQuail, D., Noordenstreng , K., & White, R. (2009). Normative Theories of the Media: Journalism in Democratic Societies . Chicago : University of Illinois Press . - Freedman, D. (2008). The Politics of Media Policy . Cambridge : Polity Press . - Mintzberg , H. (1989). Mintzberg on Management-Inside our strange world of organizations. New York: The Free Press.
  30. 30. REFERENCES Alma Media determines the environmental impacts of print and online media. ALMA, Annual review (2011) Retrieved on February 15, 2014 from   Kotler, Philip & Keller, Kevin Lane & Brady, Mairead & Goodman, Malcolm & Hansen, Torben (2009) Marketing Management. Edinburgh: Pearson Education Limited. p.426   Huston, Warner Todd. Bloomberg Businessweek Apologizes for ‘Racist’ Magazine Cover. Wizban. Retrieved March 7, 2014 from Why Apple Never Lost That Startup Feeling? Business News Daily. Retrieved February 28, 2012 from The VICE Guide to the world. The New Yoker. Retrieved April 8, 2013 from 2013/04/08/130408fa_fact_widdicombe?currentPage=all O povo de Honduras que Obama, Lula e a CNN não veêm . Veja. Retrieved July 1, 2009 from reinaldo/geral/o-povo-de-honduras-que-obama-lula-e-a-cnn-nao-veem/
  31. 31. THANK YOU!