Tuesday, February 25, 2014

The Daily Drucker: February 25 - Governance and the Corporation

What does capitalism mean when knowledge governs rather than money?

Within a fairly short period of time, we will face the problem of the governance of corporations again.  We will have to redefine the purpose of the employing organization and of its management, to satisfy both the legal owners, such as shareholders, and the owners of the human capital that gives the organization its wealth-producing power, that is, the knowledge worker.  For increasingly the ability of organizations to survive will come to depend on their "comparative advantage" in making the knowledge worker productive.  And the ability to attract and hold the best of the knowledge workers is the first and most fundamental precondition.

What does capitalism mean when the knowledge governs rather than the money?  And what do "free markets" mean when knowledge workers are true assets?  Knowledge workers can neither be bought nor sold.  They do not come with a merger or acquisition.  It is certain that the emergence of the knowledge worker will bring about fundamental change in the very structure and nature of the economic system.

ACTION POINT: What percentage of your workforce consists of people whose work requires advanced schooling?  Tell these people you value their contributions and ask them to participate in decisions where their expertise is important.  Make them feel like owners.

                                                                                        Management Challenges for the 21’st Century

Quoted from The Daily Drucker, page 61

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