Question

What exactly is Drucker trying to say in the quotation “The economist ‘business man’ – the picture that underlies the prevailing economic
‘theory of the firm’ and the theorem of ‘maximization of profits’ – reacts to economic
developments. He is still passive, still adaptive … Basically this is a concept of the
‘investor’ or ‘financier’ rather than that of a manager”.

Answer 1

In the earlier 1970's peter durcker published the definition of the business in his book ,management : tasks , responsibilities , practices .

1)" a business is a social group that differs from other social groups in only 1 way : business must hav costumers ".

2)"because its purpose is to create a customer ,the business enterprise has two and only these two,basic function;marketing and inovation produce the results;the rest are costs".

3)"it is the customer who determines what a business is... the customer is the foundation of a business and keeps it in existence . he alone gives employment.

Here is our view of Dr.Drucker's definition of business in graphical form. it is easy to see that the sucess of the system depends on the sucess of both the business and its customers.W.Edwards deming would ceetainly define this as simple system in which the performance of the system is determined by the perfomance of all the system components . the customer & the business co- create system performance .Most important,the business cannot win useless the customer is winning.