Peter drucker management


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This presentation is a summary of One of the most influential management books by Peter Drucker

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  • identify themselves with their knowledge area.
  • Penting 1:-The knowledge workers, are collectively, are the new capitalists. Knowledge has become the key resource, and the only scarce one. This means that knowledge workers collectively own the means of production.-Effective knowledge is specialized.-Knowledge work, is unisex. Not because of feminist pressure but because it can be done equally well by both sexes. Penting 2:"Knowledge industries, knowledge work and the knowledge societies have been emerging steadily since the 1950s. Knowledge workers tend to identify at least as much with their knowledge discipline as they do with the organization in which they are employed, they are highly mobile and more difficult to integrate into the mission of the organization"
  • What happens now:The means of production is knowledge, which is owned by knowledge worker that is highly portable. Knowledge workers provide capital just much as those who provide money. The two are dependent on each other.Many employees, perhaps a majority, will still have full-time jobs, yet a growing number of people work for an organization will not be a full time employee but be part-timers, temporaries, consultant or contractors.The traditional axiom that an enterprise should aim for maximum integration has become entirely invalidated. Why? 1) knowledge needed for any activity has become highly specialized. It is therefore, increasingly expensice & difficult to maintain enough critical mass for every major task within company. 2) communications costs have come down so fast as to become insignificant4) The customer now has the infomation5) There are few unique technologies anymore.
  • FIATThe Japanese are usually credited with the invention of keiretsu, but actually the american company, General Motor already applied it first at early 1910. Durant who created General Motors was buying up small but successful automobile manufacturers such as Buick & merging them into one big automobile company. A few years later Durant merged suppliers into General Motors. But the Durant Keiretsu was still based on the belief that management means command & control.The next keiretsu builder, and belived by Peter Drucker as the most successful one so far was Marks & Spencer in England, which in early 1930s integrated practically all its supplier into its own management system. Furthermore Peter Drucker claimed that Marks & Spencer model was quite consciously copied by Japanese in 1960s.
  • 1) Assumption about the environment of the organization. These define how the organization expects it can be paid for.2) Assumption about the specific mission of the organization. These define how the organization intends to make a difference in society and what results are meaningful3)Assumption about the core competencies needed to accomplish the mission. These define in which areas the organization must excel in order to achieve its mission.
  • The men who built SEARS, Roebuck-Richard Sears, Julius Rosenwald, Albert Loeb, & General Robert E.Wood has active social concerns and lively social imagination. From it’s early beginnings, Sears, Roebuck has the idea that the poor’s man money could be made to have the same purchasing power as the rich man’s. Peter Drucker said that this was not particulary a new idea. Social reformers & economists had bandied it about for decades. The cooperative movement in Europe largely grew out of it. But SEARS was the first business built on the idea in the United States, It started out with the question “ What would make the farmer a customer for a retail business?”, & and the answer is “He needs to be sure of getting goods of the same dependable quality as do city people at the same low price”
  • Willow Creek Community Church, Illinois, outside Chicago has become one of the nation’s largest churches, approximately 15000 in weekly attendance in 2007. Bill Hybels, when he founded the church in 1970, chose the community because it had few churchgoers. He was asking door to door, asking, “Why don’t you go to church?”. Then he designed a church to answer the potential customer’s needs, for instance: it offers full services on Wednesday evenings because many working parents need Sunday to spend with their children. Then he continues to listen & react: 1) The pastors’ sermon is taped while it is being delivered and instantly reproduced so that parishioners can pick up a cassette when they leave the building 2) He even add specific action recommendation at the end of the sermon to fulfill customers'’ request.
  • As knowledge becomes the key resource of the knowledge society, the social position of school as producer & distributive channel of knowledge, and its monopoly, are both bound to be challenged. And some of the competitors are bound to succeed.
  • Daisy Scout America:Beginning around 1975, the girl scouts of the USA, introduced innovations affecting membership, programs, and volunteers- the basic 3 dimensions of the organization.It began actively recruit girls from the new urban middle class: African- American, Asians, Latinos. They recognized that with the movement of women into professions & managerial positions, girls need new programs & role model that stress out professionalism & business career rather than traditional managing households. The management also realized that the traditional sources for volunteers to run local activities were shrinking because young mothers were no longer stay at home but working at office. Yet they recognized too, that this change could turn into opportunity. They set out to make work as volunteer for the Girl Scouts attractive to the working mother as a good way to have time and fun with her child while also contributing to her child’s development.
  • Kuranggambar
  • In knowledge worker era, The how in knowledge work comes only after the what has been answered.
  • Henry Ford failed to see the need to change to managers and management because he believed that a large & complex business enterprise evolves organically from the small one-man shop. Brought more than a change in size. At some point quantity turned into quality. At some point Ford became business enterprise, that is, an organization requiring different structure & different principles-an organization requiring managers & management.
  • Indeed, charisma may become the undoing of leaders. It may make them inflexible, convinced for their own infallibility, unable to change. This is what clearly happened to Stalin, Hitler, and Mao, ans it is a commonplace in the study of ancient history that only Alexander the Great’s early death saved him from becoming an ineffectual failure. Indeed, charisma does not, by itself, guarantee effectiveness as a leader. Nor are there any such things like “leadership qualities” or a “leadership personality”. Franklin D. Roosevelt, Winstion Churchill, George Marshall, Dwight Eisenhower, Bernard Montgomery, and Douglas Mc. Arthur were all highly effective, and highly visible leaders during World War II, None of them shared any personality traits or personalities.Leadership is Work, something just stressed again & again by the most effective leaders: Julius Caesar.
  • -Japanese Decision-Making processJapanese decisions are not being made by "consensus" that's the mistranslation of the Japanese term. The correct translation would be something like "common understanding"Example: everyone who is likely to be affected by a decision, like to go into a joint venture with a western company or to acquire a minority stake in a potential U.S distributor is asked to write down how such a decision would affect his work, job, and unit. He is expressly forbidden to have an opinion or to recommend ot to object to the possible move. But he is expected to think it thorough. Top management in turn, then knows where each of these people stands. Then top management makes the decision from the top down.It's not participatory management, it's mutual understanding.-Franklin Roosevelt's Decision Process-Whenever roosevelttackeld a problem, he would ask 3 or 4 his bright and experienced cabinet members each to think trough the prblem and come to him individually with a recommended decision. Each could be expected to come up with a different definition of a problem. Each had his and her own ideology, his and her prejudices, his & her own constituent, and his or her own interests, so roosevelt could analyzed from different dimensions. and then made decision from the top-down.FDR's method did not make for a harmonious cabinet, but he was probably didn't want one anyhow.
  • 1) Hoffmann-LaRoche of Basel, Switzerland, has for many years been one of the world’s largest and one of its most profitable pharmaceutical companies. But its origin were quite humble: Until the mid 1920s, Hoffmann LaRoche was a small and struggling manufacturing chemist, making a few textile dyes. It was totally overshadowed by the huge German dyestuff makers and two or three much bigger chemical firms in its own country. Then it gambled on the newly discovered vitamins at a time when scientific world still could not quite accept that such substance existed. It acquired the vitamins patents--nobody else wanted them.It hired the discoverers away from Zurich University at several times the salaries they could hope to get as professors, salaries even industry had never paid before. And it invested all the money it hhad and all it could borrow in manufacturing and marketing these new substances. Sixty year later, long after all vitamin patents had expired, Hoffmann-LaRoche has nearly half the world's vitamin market, announting to billions of dollars a year.2) It was the same story with DuPont. When it came up with Nylon, the first truly synthetic fiber--after fifteen yersog hard, frustating research-- DuPont at once mounted massive efforts, built huge plants, went into mass advertising (the company had never before had consumer products to advertise) & created the industry now call plastics.
  • In the early 1930s IBM built a high-speed calculating machine due to calculations for the astronomers at New York’s Columbia University. A few years later it built a machine that was already designed as a computer-again, to do astronomical calculations at Harvard. In 1945 when the first computer had finished its advanced, the first computer to be shown to a lay public in its showroom in midtown New York, where It drew immense crowds- IBM abandoned its own design & switched to the design of its rival, the ENIAC, developed at the University of Pennsylvania. The ENIAC was far better suited to business applications, such as: payroll. IBM structured the ENIAC so that it could be manufactured & serviced and could do mundane “numbers crunch-ing”. When IBM’s version of ENIAC came out in 1953, it at once set standard for commercial, multipurpose, mainframe computers. 2) Meanwhile, the Hattori Company in Japan had long been making conventional watches for the Japanese market. It saw opportunities and went in for creative imitation, developing the quartz-powered digital watch as the standard timepiece. By the time Swiss had woken up, it was too late. Seiko watches had become the world’s best sellers, with the Swiss almost pushed out of the market
  • In 1947, Bell Laboratories invented the transistor. It was once realized that the transistor was going to replace the vacuum tube, especially in consumer electronics such as the radio & the brand-new television set. Everybody knew this; but nobody did anything about it. The leading manufacturers- at that time they were all American, began to study transistor & to make plans for conversions to the transistor “sometime around 1970”. Till then, they proclaimed, the transistor would not be ready.Sony was practically unknown outside of Japan & was not even in consumer electronic at that time. But Sony’s President, Akio Morita read about the transistor in the newspaper. Then he went to US & bought the license of the new transistor from Bell Labs for $25000, a very low number.Two years later, SONY brought out the first portable transistor radio, which weighed less than one-fifth of comparable vacuum tube radios on the market & cost less than one third. 3 years later, Sony had the market for cheap radios in the US; and five years later the Japanese had captured the radio market all over the world.
  • Alcon Inc. Developed an enzyme to eliminate the one feature of the standard surgical operation for senile cataracts that went counter to the rhythm and the logic of the process. Once this enzyme had been developed & patented, Alcon had a “toll-gate position”. No eye surgeon would do without it. No matter what Alcon charged for the teaspoonful of enzyme that was needed for each cataract operation, the cost was insignificant in relation to the total cost of the operation. The toll gate strategy sure has severe limitations & serious risks. It is basically a static position. Once the ecological niche has been occupied, there is unlikely to be much growth. No matter how good its product or how cheap, the demand is dependent upon the demand for the process or the product to which the toll-gate product furnishes an ingredient. There were guidebook for travelers before Baedeker, but Baedeker was the only one who serves middle class tourists. Baedeker covers also practical details: the hotels, the tariff, the distance, the proper amount to tip.Perfurmes have followed a similar dynamic. A french firm, Coty, created the modern perfume industry.
  • We know & have to organize that in one & same structure there are 3 distinct kind of work:Operating workTop-management work Innovating workWe know that structure follows strategy and that structure is therefore not mechanical but must be developed from the pruposes,goals, and objectives of an organization, and on the foundation.
  • The first kind of team is the baseball team. The surgical team that performs an open-heart operation is a baseball team. The players play on the team, but they do not play as a team. They have fixed positions they never leave. “Up at bat, you are totally alone”. The second baseman rarely runs to assist the pitcher; the anesthesiologist rarely comes to the aid of the surgical nurse. The second kind of a team is the football team. The Japanese automakers’ design team & busy Emergency hospital team at 3AM are football team. Football team has fixed position but they also work as a team. Japanese automakers’ design team: the engineers, the designers, manufacturing people work in parallel.The third kind of a team is a the tennis doubles team, in tennis players have a primary rather than a fixed position. They are supposed to cover their teammates, adjusting to their teammates’ strengths & weaknesses and to changing demands of the game. All three of these kinds of team are true teams. But they are so different-in the behavior they require, in what they do best, and in what hey cannot do at all. One kind of team can play only one way, and it is very difficult to change from one kind of team to another.
  • Peter drucker management

    2. 2. The very best leaders are first & foremost effective managers 1-5: responsibilities of managers, responsibilities leadership group of an organization.6-9: numerous, interrelated tasks and practices managers must acquire to fulfill their responsibilities. 10: in detail the new demands placed on managers and management by the information revolution
    3. 3. Who is Peter Drucker?A social ecologist, writer, consultant, & retired professor.Author of 41 books, have been translated into 37 languages.Regular columnist in the Wall Street Journal for 20 years.Has Published articles in professional journals & publicationsincluding The Economist, Harvard Business Review, The Atlantic Monthly, Fortune, Harpers.Awardee of the Presidential Medal of Freedom,the U.S.’s highest civilian honor, and orders from the governments of Japan and Austria.Holds 25 honorary doctorates from American, Belgian, Czech, English, Spanish, and Swiss universities.Served as the president of the Society forthe History of Technology from 1955 to 1960.
    4. 4. Preface Introducing knowledge worker: “Own their means of production, for they own their knowledge. And their knowledge is portable; it is between their ears. They outlive any employing organization” What do you do? “Im a tax specialist, Im a metallurgist”Source: Google Image
    5. 5. Introduction What is Management? Management is tasks. Management is a discipline. But management is also people. every achievement of management is the achievement of manager. Every failure is a failure of manager. Who are the managers? Those who have responsibility for contribution. Function rather than power has to be distinctive criterion and the organizing principle. What do managers do? 1) Set objectives: what the objective should be, what goals in each area of objective should be, decide what has to be done to reach these objectives, make the objective effective by communicating them. 2) Organizes: Analyze the activities, decisions, and relations needs, classify the work, divide it into manageable activities-> manageable jobs, group the units into organization structure 3) Motivates & communicate: Make a team out of the people that are responsible for various Jobs. 4)Measurement: establish target and yardstick, communicate the meaning of the measurements and their findings to subordinate 5) Develops people: including the manager itself.Source: Google Image
    6. 6. Part 1:Management New Realities
    7. 7. Knowledge is All Knowledge Economy: 1) Borderless ness, because knowledge travels even more effortlessly than money 2) Upward mobility, available to everyone through easily acquired formal education 3) The potential for failure as well as success. Anyone can acquire the "means of production"-that is, the knowledge required for the job-but not everyone can win.Source: Google Image
    8. 8. New Demographic Demographic tends are having significant political and economic effects in developed countries. Low birth rates in some countries are escalating political tensions over immigration policies. The aging population in developed countries is straining existing social pension system, leading to pressure to increase the traditional retirement age. Increased life expectancies, especially among knowledge workers, should make second and parallel careers possible and desirable.Source: Google Image
    9. 9. The Future Of The Corporation & The Way Ahead Some of the key assumptions on which the corporation was invented are now being reversed. First, the specialized nature of knowledge, the reduction in communication costs, and the crisscross of technology are having a profound impact on reversing the century trend toward integrating the separate activities of the corporation into a hierarchy. The process of integration is being reversed by the process of disintegration.Source: Google Image
    10. 10. Management’s New Paradigm Management as Business Management: Not completely true, Management is the specific and distinguishing organ of any and all organizations. The one right organization: Instead of searching for the right organization, management needs to learn to look for, to develop, to test: The organization that fits the task. There is one right way to manage people- or at least there should be. One does not "manage" people. The task is to lead people. And the goal is to make productive the specific strengths and knowledge of each individualSource: Google Image
    11. 11. Part 2:Business Performance
    12. 12. Theory of Business A theory of the business has three assumptions: There three assumptions must fit one another and reality. The theory of the business must be understood throughout the organization.Source: Google Image
    13. 13. The Purpose & Objective of A Business Marketing and innovation are the two result areas with which the setting of objectives has to begin. And then, there is the need for objectives with respect to all resources: people, capital, and key physical resources. Profit & Profitability? Profit and profitability come at the end, they are survival needs of a business and therefore require objectives. But the needed profitability also establishes limitations on all the other objectives.Source: Google Image
    14. 14. Making The Future Today! It is possible to identify and prepare for the future that has already happened. It is futile to try to guess what products and processes the future wil want, but it is possible to decide what idea one wants to make reality in the future, and to build different business on such an idea. The key factor for business will not be overpopulation that we have been warned for many years, but under population of the developed countries.Source: Google Image
    15. 15. Strategic Planning: The Entrepreneurial SkillsStrategic planning prepares todays business for the future. The aim of strategic planning is action now.
    16. 16. Part 3:Performance in ServiceInstitution
    17. 17. Managing Service Institution in the Society of Organizations To make service institution and service staffs perform requires: 1) clear objective and goals 2)priorities on which resources can be concentrated. 3)clear measurement of accomplishment 4) organized abandonment of the obsoleteSource: Google Image
    18. 18. What Successful & Performing Nonprofits are Teaching Us 1) No bland mission statementsFocus Their Mission Statement on Specific Strategies & Action "to turn societys rejects-alcoholic, criminals, derelicts-into citizens“ 2) Successful Mission Statement Focus on the Outside The Community & Customer 3)Know how to manage volunteers Source: Google Image
    19. 19. The Accountable School The knowledge society & knowledge workers require high level of literacy, strength-based education & continuous learning.Source: Google Image
    20. 20. Performance in Service Institution Rethinking government should start by acquiring each agency to immediately define its performanceobjective, its quality objective, and its cost objective.This should be followed by the adoption of the formal processes of continuous improvement and benchmarking.
    21. 21. Entrepreneurship in the Public-Service Institution There are 4 requirements for successful innovation in the public-service institution, 2 of the important are: 1) Provide a clear definition of mission 2) Establish goals that are attainable & stated in terms of the optimum rather than the theoretical maximumSource: Google Image
    22. 22. Part 4:Productive Work & AchievingWorker
    23. 23. The main challenges to managing work and working are the changed psychological and social position of the manual worker. Work is changing, especially as more & more married women of all classes are working in the developed countries.Source: Google Image
    24. 24. Managing The Work & Worker in Manual WorkThere are number of steps to improve knowledge-worker productivity.They include:1) Define the task2) Focus on the task3) Define results4) Define quality5) Grant autonomy to the knowledge worker6) Demand accountability7) Build into tasks continuous learning & teaching
    25. 25. Part 5:Social Impacts & SocialResponsibilities
    26. 26. In our society of pluralistic institution, each institution must focus on its narrow mission if it is to achieve results & meet the minimum test of social responsibility.
    27. 27. Part 6:The Manager’s Work & Jobs
    28. 28. Why Managers: Lesson of The Ford Story Managers are not helpers and their jobs are not delegated. Their jobs are autonomous and grounded in the needs of the enterprise.Source: Google Image
    29. 29. Design & Content of Managerial Jobs A managers job should always be based on necessary task. Itshould be a real job that makes a visible (if not a measurable) contribution toward the objectives of the entire enterprise. It should have broadest scope & authority possible. Should be directed and controlled by the objectives of the performance rather than by their superior. Source: Google Image
    30. 30. Developing Management & Managers Management development is based on the genuine needs of organizations and managers alike. Management development tied to the needs of the organization, manager development tied to the needs of the individual. Manager development is self-development, the aim of manager development is excellence.Source: Google Image
    31. 31. The Spirit of Performance The purpose of organization is to enable ordinary human beings to do extraordinary things. The test of an organizations leadership is, therefore, the spirit of performance. This requires the specific practices rather than preachment or charisma. It requires the realization that integrity is the one absolute requirement of managers & leadersSource: Google Image
    32. 32. Part 7:Managerial Skills
    33. 33. The Elements of Effective Decision Making Good decision makers dont make many decisions. They make decisions that make a difference. The step in making important decisions are: 1) Define the problem 2) Decide on what is right 3)Get other to buy the decision 4) Build action into the decision 5) Test the decision against actual results 6) Building continuous learning into executive decisionsSource: Google Image
    34. 34. The Elements of Effective Decision Making (Cont’d) Japanese Decision Making Process & Franklin Roosevelt’s Decision ProcessSource: Google Image
    35. 35. How To Make People Decision There are five steps in making people decisions:1) Carefully think through the assignment.2) Look at 3 to 5 qualified people3) Consider each candidate’s strenghts4) Discuss each candidate with his/her colleagues and bosses.5) Make sure the appointee understands the job & what it requires6) Report back on it once he/she is in the job. There are five ground rules for the decision maker:1) Accept responsibility for any people2) Accept also that people who do not perform must be removed3) Find the position that fits employee’s strengths4) It is manager’s responsbility to make the right people decision every time & for every position5) Newcomer should preferably be put first into an established position, where expectations are known & where they can be helped if necessary.
    36. 36. Part 8:Innovation &Entrepreneurship
    37. 37. The Entrepreneurial Strategies Fustest With the MostestEntrepreneur aims at leadership, if not a dominance, of a newmarket or a new industry. Being Fustest with the mostest is not necessarily aim at creating a big business right away. Source: Google Image
    38. 38. The Entrepreneurial Strategies (Cont’d) Hitting Them Where They Ain’t (Creative Imitation) A strategy that is “imitation” in its substance. But it is creative because entrepreneur applying the strategy of creative innovation understands what the innovation represents better than the people who made it & who innovated Creative imitation is likely to work most effectively in high-tech areas for one sample reason: high tech innovators are least likely to be market focused and most likely to be technology and product focused.Source: Google Image
    39. 39. The Entrepreneurial Strategies (Cont’d) Hitting Them Where They Ain’t (Entrepreneurial Judo) The Japanese master looks for he strength that is his opponent’s pride & joy. He assumes, and does so with high probability that the opponent bases his strategy on this strength in every fight. Then he turns his opponent’s strength into the opponent’s fatal weaknesses that defeats the opponent. This is the entrepreneurial judo strategy.Source: Google Image
    40. 40. The Entrepreneurial Strategies (Cont’d) ECOLOGICAL NICHES The toll-gate strategy The product has to be essential to a process. The risk of not using it must be infinitely greater than the cost of the product The specialty-skill strategy Unlike the toll-gate companies, theirs is a fairly large niche; yet it still unique. It wasobtained by developing high skill at a very early time. The specialty-market strategy The major difference between the specialty- skill & specialty –market is that the former is built around a product/ service and the latter around specialized knowledge of a market. Otherwise, they are similar.Source: Google Image
    41. 41. Part 9:Managerial Organization
    42. 42. Strategies & Structure Good Organization structure does not guarantee performance. But poor or in appropriate structure impedes performance– and performance is the test of organization structure.Source: Google Image
    43. 43. Three Kinds of Teams Team Building has now become buzzword in American organizations, yet the results are not overly impressive. The major reason why team building is not successfuly applied is because the executives belief that there is just one kind of team, while actually there are 3 kind of teams. Each different in its structure, behavior & demand from its members, in its strengths, its vulnerabilities, its limitation & its requirement.Source: Google Image
    44. 44. Alliances Mergers & Acquisitions and divestitutes have been around for a long time. Oganizations generally enter alliances for one of five reasons: 1) To obtain access to new, distinct technology 2) To achieve synergy between the strenghts of two independent partners 3) To gain access to people with specialized knowledge 4) To outsource noncore activities to specialist 5) To extend a company’s geographic reach Alliances are risky. Alliance are difficult. But are increasingly necessary for growth.Source: Google Image
    45. 45. The CEO in the New MilleniumThe CEO in the new millenium has six specific tasks. They are:1) To define the meaningful outside of the organization2) To think through what information regarding the outside is meaningful and needed for the organization, and then to work on getting it into usable form3) To decide what results are meaningful for the institution4) To set priorities for the organization5) To place people into key positions6) To organize top management
    46. 46. Part 10:New Demands on theIndividual
    47. 47. New Demands on the Individual Knowledge workers are likely to outlive their employing organization. Even ifknowledge workers postpone entry into the labor force as long as possible—if, forinstance, they pursue education till their late twenties to get a doctorate. They are likely with present life expectancies in the developed countries, to live into their eighties. Their average working life, in other words, is likely to be fifty years. But the average life expectancy of a successful business is approximately thirty years and in the period we are living now, it could be less. Therefore, workers, and especially knowledge workers, will outlive any one employer, and will have to be prepared for more than one job, more than one assignment, more than one career.
    48. 48. Managing The Boss There are seven specific keys to success in managing bosses: 1) Make a boss list to identify who your bossess are 2) Ask for input 3) Enable each boss to perform, play to each boss’s strenghts 4) Keep each boss informed 5) Protect each other bosses from surprise 6) Never underrate a boss All managing the boss requires is a little thinking, a little common sense. But it does require some works.Source: Google Image
    49. 49. The Educated Person The knowledge society changes the very idea about the definition of educated person. In earlier societies, the educated person was an ornament. Now th educated person is the knowledge’s society’s chief representative & key resource. This brings new responsibilities and new demands on the individual. The educated person will have to be able to understand the world’s cultures, religions & and traditions and will have to become familiar with knowledge in multiple disciplines, because changes in one discipline often originate from innovations in another disciplines. This requires continuous learning & teaching.Source: Google Image
    50. 50. Conclusion: The Manager of TomorrowManager of tomorrow will have to learn how to manage in situations where theydo not have command authority, where they are neither controlled nor controlling.The key to the productivity of knowledge workers is to make them concentrate onthe real assignments. One of the worst problem in managing knowledge workers isthe assumption among knowledge workers that if you are understanable, you arevulgar.With respect to managing social impact and social responsibility, managers willhave to learn how to think through systematically & carefully the difficult & riskytrade-offfs between conflicting needs & conflicting rights