World is Green

Only Peter Drucker can provide this level of clarity.

Three roles of Management

Drucker teaches us three roles of management. The first role is to accomplish the function that is specific to each organization; in other words, to contribute to society through its business. If it is a newspaper company, it is to publish the best paper. If it is a greengrocery store, it is to supply the best vegetables. It is only a monastery deep in the mountains that does not have to contribute to society directly. It is only a gangster connection that does not have any intention to contribute to society. All other organizations must contribute to society, because they are allowed to exist, occupy, and hire the most valuable in society.

The second role is to make work productive and people achieving. Man as a social existence seeks to exert his ability fully, to fulfill his potential, and contribute to society. Especially from now on, we will enter an age when people will leave an organization that cannot make work productive, and satisfy them in achieving through their strengths.

The third role is not to give any negative impact on society, and to contribute society in solving its problems. This is so-called the social responsibilities of the organization.

The social responsibility of organization

The first social responsibility of organizations is to eliminate any negative impact to society caused by its existence and activities, or at least to minimize it. If a noise is produced during the process of production, it has to be reduced as much as possible. Traffic stagnation might be caused in neighborhood. It has to be eliminated. Drucker says the organization has to eliminate or at least to reduce these nuisances as much as possible.

Furthermore, the responsibility of organizations is to solve social problems by mobilizing its strengths. And, to make the problem- solving into a business if possible. In any industries such as power companies, automobile companies, convenience stores, hospitals, etc., the business itself started fulfilling social needs. It is true to any business. These two responsibilities make up the social responsibility of organizations.

Drucker affirms strongly that there are not any special responsibilities, called the social responsibility of business. It is politically wrong to give any special responsibility to anyone, or to any organization. In Europe, such an idea was discarded a long time ago, even before modern industry was born. Pascal, well known by his “Penses” (1670), pointed this out. If special responsibilities were laid on, special powers would be given. As powers are accompanied by responsibilities, responsibilities are accompanied by powers.

For management, profit is a requirement to achieve these three roles. At the same time, it is a scale to measure its achievement. It is not a purpose. A requirement is harder than a purpose. A scale is also harder than a purpose. During my thirty years in Keidanren, so called the headquarters of the Japanese business, I have never met a single CEO who said he worked for purpose of moneymaking. Drucker says there is no such thing as profit motivation. Profit is a cost that a company as a public institution needs to achieve its roles. It is a requirement. It is a standard to judge its achievement.