The multinational corporation has not changed much since the 1850s - until now.
"The Changing Corporation" was the subject of an interactive video hosted by Utah Valley Community College's School of Business and Division of Continuing Education Thursday.Wall Street Journal columnist Peter Drucker gave his views to 130 video audiences across the country.
The growth in alliances is the biggest change for the corporation. Drucker said, "Nobody really knows yet how to handle it."
For years, businesses expanded by merger, acquisition and grassroots. Now such expansion is too expensive, said Drucker. With traditional business expansions, the line of authority was clearly defined. With alliances, a company cannot dictate policy to its partner.
An alliance calls for skills of persuasion. Drucker said you must learn how to work things out when you can't command. "We haven't learned to do this well."
Bickering between companies cannot be allowed, Drucker said, suggesting that alliances build in arbitration from the beginning.
Another change in corporate organization is cuts in the levels of management. For years, businesses were organized like the military, with clearly defined, often redundant, levels of command.
The redundancies were needed in war, said Drucker, because it was necessary to replace a dead or injured officer immediately. Peacetime businesses had no need for the chain of command.
The symphony orchestra is a better model for businesses, Drucker said. Each instrumentalist knows his own job and everyone plays from the same score. Only one conductor is needed.
The biggest challenge facing corporations in the coming years will be work-force training.
"There is nothing more wrong than the saying, `You can't teach an old dog new tricks. You have to take responsibility for your own continued learning," Drucker said.
Fostering corporate success
Economic writer Peter Drucker says corporations must:
- Lead by persuasion rather than by command.
- Provide workers with a clear sense of mission.
- Let workers do more work from corporate headquarters or home.