On the contrary, “so far from being controlled by the market, the firm to the best of its ability has made the market subordinate to the goals of its planning.” Galbraith is equally categorical when he says that profit maximization is no longer necessary.
The second difference in management theory is exemplified in the writings of Drucker and Galbraith. Drucker says, “Organizations do not exist for their own sake, they are a means; each is society’s organ for the discharge of one social task. Survival is not an adequate goal for an organization as it is for a biological species. The organization’s goal is a specific contribution to individuals and to society. The test of its performance, unlike that of a biological organism, therefore always lies outside of it.” For Galbraith the primary purpose of an organization is to survive: “For any organization, as for any organism, the goal objective that has a natural assumption of pre-eminence is the organization’s own survival.” We may well ask who is right.
Within the framework of the theory being proposed, both are right: Galbraith is viewing the organization as structure, Drucker is viewing the organization as process. Galbraith, in fact, coined the word “technostructure” and it is significant to note that he did not coin the word “technoprocess.” Drucker, on the other hand, developed management by objectives, which is essentially a process-oriented type of management. We have seen that the company must be viewed as a holon and that there are two tendencies at work: an integrative or survival tendency and an assertive or mission tendency. The conflict between Drucker and Galbraith can be shown to be simply one of point of view.
March 18th, 2020 ~ Process & Structure–we will be reading discussing these two in great detail.