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Principles Articulated by Peter Drucker Essay

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Updated: Jan 6th, 2020

Introduction

The purpose of this paper is to review the application of the principles articulated by Peter Drucker in different organizations.

Principle 1: focus on understanding customer needs

Satisfying customers is one of the basic purposes for all businesses. The efficacy with which an organization satisfies the target customer influences its capacity to generate sustainable profits. This aspect underlines the significance of developing sufficient understanding of the customers’ needs.

The value of understanding the customer’s needs is highlighted by Peter Drucker principle on customer focus. The principle asserts that organizations must focus on understanding the customers’ needs before making a decision on the most appropriate approach to satisfy the identified need through the provision of a product.

Example 1: Nestle Incorporation

The company operates in the Fast Moving Consumer Goods [FMCG] sector by providing different food products such as coffee, confectionaries, water, and cereal products. The company is committed to making its customers delighted through the provision of high-quality products.

To achieve this goal, Nestle is focused on understanding the customers product tastes and services. The firm invests in continuous market research with the objective of understanding the changing nutritional expectations. This approach has enabled Nestle to appreciate the customers’ inclination to health-conscious consumption behavior.

Example 2: Cisco Systems

In its pursuit of sustainable development, Cisco Systems has integrated quality as one of its core strategic management issues. To entrench quality in its product provision successfully, Cisco has developed a customer-focused culture within all its departments. The firm has trained its workforce to be customer-centric by ensuring that they understand how their behavior and attitude affect the customers’ behavior.

The customer-focused culture has enabled the firm to establish a strong customer relationship. The firm has established a Technical Assistant Centre [TAC] through which it interacts with customers hence resolving their computer software and hardware problems on a 24-hour basis. Thus, the firm can customize its product offering hence increasing their satisfaction (“Approach to quality: customer success” par.1).

Principle 2: Employee orientation

The principle of employee orientation accentuates the significance of appreciating employees as a key organizational resource. Thus, it enables an organization to respect and reward the employees’ involvement and contribution. Employee orientation enables employees to be actively involved in an organization’s operation.

Therefore, an organization must implement human resource strategies aimed at understanding the employees’ personal and career development goals. Gaining such understanding forms the foundation on which a firm is in a position to undertake employee talent development. The principle of employee orientation culminates in an improved level of employee commitment, productivity, and retention.

Example 1: Google Incorporation

The company has successfully entrenched the principle of employee orientation in its strategic human resource management. The firm provides employees an opportunity to experiment on their creativity and innovative capacity through the ‘Dogfooding’ program. Under this program, Google employees are offered a chance to make suggestions on how to improve products that yet to be introduced in the market.

Thus, the employees are the first phase through which the firm undertakes product tests. This aspect highlights that the firm considers employees input as an invaluable asset in its product success. This aspect has led to the development of a sense of trust amongst the employees regarding information that might be considered confidential (“Perks and programs” par. 5).

Example 2: PepsiCo

PepsiCo’s success in the global beverage industry can be associated with its commitment to employee orientation. One of the firm’s motives to employee orientation is to promote consistent management. In 2009, the firm designed the Chairman’s Circle of Champions program.

The program is intended at honoring the performance of operations and back-end employees. The program focuses on the employee’s performance in job performance, safety, and people skills. Through this program, PepsiCo has succeeded in entrenching the organizational values amongst the employees hence entrenching the overall culture (“Customer and sales” par.2).

Principle 3: Everyone innovates

The principle emphasizes on the value of exploiting the employees’ competencies, skills, and expertise in its product development process. Therefore, organizations should not limit the process of new and continuous product development to the research and development team.

On the contrary, organizations’ should consider leveraging on the employees ideas. This principle is supported by the findings of the “Board of Chemical Sciences and Technology”, which affirms that people and processes “are an essential element of creating alignment throughout an organization and are key to reducing innovation cycle time” (215). Embracing this principle increases an organization’s capacity to develop products that foster a firm’s long-term sustainability.

Example 1: Ericsson

Ericsson recognizes the fact that innovation is not an option in attaining sustainable growth. The firm has based its operation on the principle of ‘everyone innovates every day’. The firm has enacted this principle by developing a collaborative work environment. Collaboration at Ericsson is not only limited to employees.

On the contrary, the firm has adopted a holistic approach to exploiting the creativity of its employees, partners, and customers. The company’s approach is aligned with Karlsson’s assertion that approximately half of all the innovative opportunities are generated internally through interaction with customers (6).

Example 2: Toyota Incorporation

The Toyota Motors has integrated this principle in its effort to be proactive in responding to market needs. Most of the ideas that the firm implements annually are derived from ordinary employees. Despite the fact that not all ideas work, the firm gains insight from the creativity of all the employees. Based on this principle, the Toyota Motors has been able to implement incremental innovation as opposed to huge and sudden leaps (Surowiecki par. 7).

Principle 4: Everyone lives by the values

This principle affirms that an organization’s long-term success depends on the value that it has formulated. The values guide the employees in undertaking different business activities such as marketing and production. Pursuing the stipulated values contribute to the development of the desired organizational culture.

Example 1: PricewaterhouseCoopers

The firm’s success as a professional consultancy firm has been promoted by its commitment to ensuring compliance with clearly stipulated values. The firm’s core values include teamwork, leadership, and excellence (“Our values” par.1). Teamwork has enabled the firm to develop a collaborative work environment hence improving its effectiveness in serving clients.

Teamwork within the firm is fostered by pursuing respect, relationship and sharing. On the other hand, excellence enables the firm to fulfil and exceed its promise to clients while leadership advocates for guiding employees through vision, integrity, and courage.

Example 2: Southwest Airlines

The firm’s values relate to the promotion of a warrior spirit, servant heart, and working the Southwest way. The warrior heart emphasizes the importance of innovation, hard work, perseverance, and courage while the servant heart emphasizes on the significance of promoting egalitarianism within the firm. The rationale is to put others first. On the other hand, working the Southwest way underlines the firm’s commitment to reliability, low cost, safety, and optimal customer service (“Star of the month” par. 3).

Application of the principles in risk management

The four principles are invaluable to my risk management approach hence improving my contribution to increasing the firm’s profit as evaluated herein.

Principle 1: pursuing this principle will improve my ability to understand and respond to customers’ demands. Therefore, the risk of customers shifting to a competing product will be reduced significantly. Growth in the level of customer loyalty will culminate in high and sustainable profits.

Principle 2: employee orientation

Based on this principle, I will ensure that I understand the assigned roles and responsibilities. Gaining such understanding will improve the extent to which I am actively involved in the firm’s operations. Therefore, the effort put in undertaking the job roles will culminate in high organizational productivity and hence the level of profitability.

Principle 3: everyone innovates

This principle will contribute to the appreciation of information sharing through teamwork. Therefore, I will be critical in evaluating the opinion of other employees in resolving assigned work activities. This aspect will improve the chances of generating insight in dealing with workplace issues.

Principle 4: organizational values

The appreciation of the organization’s values, I will contribute to the development and promotion of effective organizational culture. Subsequently, the probability of promoting the firm’s overall performance and profitability will be enhanced remarkably.

Conclusion

The integration of the principles articulated by Peter Drucker has contributed to the remarkable performance of the firm’s evaluated.

Works Cited

: customer success 2015. Web.

Board on Chemical Sciences and Technology: Reducing the time from basic research to innovation in the chemical sciences, New York: National Academies Press, 2005. Print.

Customer and sales 2015. Web.

Karlsson, Magnus. Everyone innovates every day 2010. Web.

2015. Web.

Perks and programs 2015. Web.

2015. Web.

Surowiecki, James. 2008. Web.

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