Economic Growth: All Articles and Books

Leveraging the Strengths Of the Disabled

Ron Tang — Thu, 03 Jul 2008 07:30:00 -0400

When the House passed legislation in late June that expanded protections for disabled people, it marked an important step forward on an important issue. But what the workplace needs, even more than a new law, is an old insight -- one first offered by Peter Drucker more than 40 years ago.

"To make strength productive is the unique purpose of organization," Drucker wrote in his 1967 classic, The Effective Executive. "It cannot, of course, overcome the weaknesses with which each of us is abundantly endowed. But it can make them irrelevant."

This holds true for everyone, of course. As Drucker noted, "Strong… more

Drucker's Take On Making Mistakes

Ron Tang — Thu, 19 Jun 2008 11:29:00 -0400

Lyndon Johnson occupied the White House when KeyCorp first began raising its dividend. The Beatles topped the pop charts. Martin Luther King Jr. led tens of thousands of civil rights marchers through Alabama.

For 43 straight years, the company's annual payout climbed, "a record we were extremely proud of," in the words of KeyCorp Chief Executive Henry Meyer. That is, until earlier this month. The Cleveland bank, slammed by the weak housing market and an adverse tax ruling, announced that it would halve its dividend to 75 cents in a bid to save $200 million a year. It also said it… more

The Seven-Year Rich

Ron Tang — Mon, 02 Jun 2008 09:12:00 -0400

After the brutal bust of 2001, we didn’t expect new masses of multimillionaires to reappear around here quite so fast. But they did -- and this time, no recession will send them packing. A 2008 field guide to a new, super-driven kind of upper class -- whose motives and morés, like it or not, are now part of our DNA.

I. The Penthouse View

On a recent Friday morning, at the end of a week in which the dollar has continued to sink, stocks have fallen deeper into negative territory, and a widely watched measure of leading economic indicators has slipped, I… more

Conditioning the Corporate Athlete

Ron Tang — Thu, 22 May 2008 11:47:00 -0400

Thirty-five years ago, in his classic Management: Tasks, Responsibilities, Practices, Peter Drucker declared that the means by which most people had long run their organizations -- through a mix of perks and punishment, rewards and reprimands -- was all but dead.

"The basic fact," Drucker wrote, "is that the traditional... approach to managing, that is the carrot-and-stick way, no longer works."

It was striking, then, to read a few weeks ago of Whirlpool's decision to suspend 39 workers who had claimed to be nonsmokers -- apparently in an attempt to avoid paying a $500 surcharge on their health insurance -- but then… more

Exxon Mobil Needs a Longer View

Ron Tang — Fri, 09 May 2008 07:18:00 -0400

John D. Rockefeller has been described in many different ways: as greedy and cutthroat, as munificent and caring, as "solitary, taciturn, remote, and ascetic," in the words of author Daniel Yergin. But as a manager, perhaps Rockefeller's most indispensable quality was this: He was uncompromisingly forward-looking.

It was Rockefeller, more than any single figure, who helped revolutionize the way people in the 19th century illuminated their homes, hastening the shift from costly whale oil to kerosene -- a fuel that was, as he put it, "cheap and good."

Rockefeller's heirs recently evoked that history, as they went public with their criticism of… more

Throw Out the Tax Code

Ron Tang — Sun, 20 Apr 2008 07:25:00 -0400

Politicians don't like to talk about taxes except to brag about cutting them. But with California's widening budget deficit threatening deep cuts in education and other public services, it's difficult to avoid discussions about raising taxes.

Unfortunately, what's likely to be lost in the upcoming partisan melee over whether new taxes are needed to close the $16-billion gap is an equally important tax issue -- California's aging and often unfair tax system needs to be overhauled.

The goal of tax reform should be twofold. One is to generate a more reliable revenue stream. The other is to make the tax… more

Don't Spend Your Tax Rebate!

Ron Tang — Tue, 15 Apr 2008 04:41:00 -0400

The IRS was so confident in the legendary observation of Oliver Wendell Holmes, Jr. that “taxes are the price we pay for a civilized society” they chiseled it above the entrance to their Washington D.C. headquarters. Still each year Tax Day makes incumbent politicians uneasy -- especially at times when recession fears mount and fall elections loom. This year this perilous combination spurred them on to take prompt and bipartisan action. Who wants to be accused of sending families their tax bill as economic growth slows and hardship spreads?

The bipartisan prescription to jumpstart the economy was to deliver over $100… more

Peter Drucker's Winning Team

Ron Tang — Thu, 10 Apr 2008 12:23:00 -0400

In the summer of 1985, an executive named Peter Bavasi pored over a Harvard Business Review article by Peter Drucker in which the great management thinker described the "widow maker" -- a job so inherently impossible that it was apt to defeat even the best and brightest.

Drucker's warning, "Any job that ordinarily competent people cannot perform is a job that cannot be staffed," was especially ominous for Bavasi. He had, you see, just become president of the Cleveland Indians, a sports franchise to which the word "hapless" seemed inextricably tied.

So Bavasi called Drucker to seek his counsel, and there began… more

Drucker And the Complexities Of Race

Ron Tang — Thu, 27 Mar 2008 11:22:00 -0400

Long before so much of the nation became fixated on what was being preached inside black churches on Sunday mornings, Peter Drucker would go on occasion and listen for himself.

It was the late 1930s, and Drucker had just landed in New York, having fled the Nazis. Whenever he happened to spend the weekend in Washington, Drucker recalled years later, he would sneak into Rankin Chapel to be "shaken and moved" by Howard Thurman, the chaplain at Howard University. His was the kind of voice, said Drucker, that "reached the inner core of one's being."

Thurman's soul-stirring oratory, as well as relationships… more

Democratizing Capital

Ron Tang — Thu, 20 Mar 2008 05:53:00 -0400

Below is a longer version of the article published in The Nation. For the version appearing in The Nation, please click here.

Historical analogies are never exact. Yet many of the choices we have before us today are similar to ones that an earlier generation of progressives faced as the 1932 election approached. As we do today, the progressives of the 20th century confronted a society beset by a huge gap between classes and an economy laid flat by the bursting of the speculative excesses of the previous decade. To be sure, our economy is nowhere near Depression levels… more

Buffett's Plan For Successful Succession

Ron Tang — Wed, 12 Mar 2008 23:00:00 -0400

A couple of weeks ago, Berkshire Hathaway Chairman Warren Buffett officially put the kibosh on what many an investor must have regarded as the ultimate succession plan: "I've reluctantly discarded the notion of continuing to manage the portfolio after my death -- abandoning my hope to give new meaning to the term 'thinking outside the box,'" Buffett, 77, wrote in his annual letter to shareholders.

Despite his tongue-in-cheek approach, Buffett touched on one of the most important issues an enterprise faces: figuring out who's the right person to one day take the reins.

A company's very "survival," Peter Drucker wrote in his… more

Wide-Angle Thinking

Ron Tang — Mon, 03 Mar 2008 15:22:00 -0500

Charles Handy has been called "the Peter Drucker of Britain." But in a sense, pinning Handy to a particular place misses the whole point.

In the last year alone, this venerated thinker and writer on organizational behavior and society has left his home near London to spend time in Hong Kong, China, Romania, Spain, Italy, Denmark, Sweden, and India. He's also made three trips to the U.S., where he just wrapped up a five-week stay as a scholar-in-residence at Claremont Graduate University's Drucker School of Management and the Drucker Institute, of which I am the director.

It was there that… more

Watching Sovereign Wealth

Ron Tang — Thu, 28 Feb 2008 00:00:00 -0500

When the adjectives most often used to describe you are "secretive," "opaque" and "mysterious," you've got an image problem. Such is the predicament of sovereign wealth funds, the government-controlled investment vehicles, often in authoritarian states, that have become the bane of Western politicians. Yesterday, the European Commission became the latest body to propose transparency guidelines for these funds.

But the good news for sovereign wealth funds is that increased disclosure and transparency may actually be a win-win for everyone. A little openness can go a long way.

Market participants and regulators would benefit by gaining some insight into potential contagion risks and… more

What Can Microsoft Offer Yahoo?

Ron Tang — Thu, 14 Feb 2008 00:00:00 -0500

You'd be hard-pressed to find many things to which Peter Drucker was as openly hostile as the hostile takeover.

In his book The New Realities, he went so far as to call the gobbling up of companies in this fashion "the most serious assault on management in its history -- a far more serious assault than any mounted by Marxists."

Mind you, he made these comments in 1989, when all too many real-life Gordon Gekkos were commanding center stage. What rankled Drucker was the tendency of these corporate raiders to quickly dismantle the enterprises they'd just gotten their hands on,… more

California's Wimps in D.C.

Ron Tang — Mon, 11 Feb 2008 00:00:00 -0500

Free trade's benefit to the country as a whole may be open to debate, but there is no doubt that California stands to gain from it. So why are the state's political leaders so squeamish about standing up for free trade in Washington?

California has twin engines of ingenuity -- Hollywood and the Silicon Valley -- and continued trade liberalization is crucial to keep both running. These industries face more daunting market barriers -- the absurdly low number of foreign films allowed in China's cinemas is a good example -- than do traditional industrial manufacturers, which already have benefited from many… more

Muhammad Yunus: The Unlikely Disciple

Ron Tang — Thu, 31 Jan 2008 00:00:00 -0500

There is no shortage of people who exemplify Peter Drucker's principles and practices -- a multitude of middle managers and top executives responsible for many millions, if not billions, of dollars in economic activity. Yet the most Drucker-like of all may well be a man who launched his enterprise with a series of transactions totaling 27 bucks.

Nobel Peace Prize winner Muhammad Yunus, who pioneered the concept of microcredit -- providing the poorest of the poor with tiny loans to start their own moneymaking ventures -- is promoting a new idea these days. He calls it "social business," and in… more

Corporate Tax Under the Microscope

Ron Tang — Thu, 24 Jan 2008 00:00:00 -0500

S corporations now account for two-thirds of U.S. corporate tax returns (see NTA report) and while designed for simplicity, they’ve become increasingly complex and harder for regulators to standardize and monitor.

As the number of small businesses has exploded, the number of S corporations formed has more than quadrupled since the last review (of 1984 returns) while the number with assets exceeding $10 million has increased 10-fold. Today’s S corporations are not necessarily small, and not necessarily easy to classify for tax reporting purposes.

In fact, the National Taxpayer Advocate’s (NTA) 2007 Annual Report to Congress (January 2008) identifies… more

Look Back in Awe

adminn — Sat, 01 Dec 2007 22:29:00 -0500

Democrats and Republicans are alike in one respect, according to the libertarian writer Brink Lindsey: their shared nostalgia for the 1950s. Except, he says, "Republicans want to go home to the United States of the 1950s, while Democrats want to work there."

Indeed, from television (where Mad Men has faithfully recreated the furnishings, boozy smell, and chronic sexual dishonesty of the New York executive suite circa 1960), to the celebrated 50th anniversary of Jack Kerouac's On the Road, to the current political debate, we seem to be awash in 1950s nostalgia. While most of the Republican presidential candidates have life experiences… more

Has Toyota Lost Its Way?

adminn — Mon, 26 Nov 2007 15:40:00 -0500

The Toyota Way might just as well be called the Drucker Way.

As much as any company anywhere, Toyota Motor eagerly embraced many of the key principles that Peter Drucker first laid out in the 1940s and '50s: that corporations must move away from a "command and control" structure and cultivate a true spirit of teamwork at all levels; that line workers must adopt a managerial outlook and take responsibility for the quality of what they produce; that the enterprise must be steered by a clear set of objectives while giving each employee the autonomy to decide how to reach those… more

Undebated Challenges

Articles — Mon, 19 Nov 2007 16:35:00 -0500

The most damaging part of the Bush foreign policy legacy is not the precipitous decline in American power and influence brought about by the disastrous Iraq occupation. It is the way the Administration’s "war on terror" and its neoimperial project in the Middle East have distorted our vision of the world.

They magnify out of all proportion what should at worst be minor threats to our national security and ignore much larger developments, such as the extraordinary economic rise of China and India, which are having a much more profound effect on the American way of life.

Just how distorted our… more