Technology, Management and Society (PDFDrive)

Technology,
Management,
and Society
BOOKS BY
PETER F. DRUCKER
Technology, Management, and Society

The Age of Discontinuity
The Effective Executive
Managing for Results
Landmarks of Tomorrow
The Practice of Management
The New Society
Big Business
The Future of Industrial Man
The End of Economic Man
Technology,
Management,
and Society
Essays by
PETER F. DRUCKER
i~ ~~~;~~n~~~up
LONDON AND NEW YORK
First published by Butterworth-Heinemann
This edition published 20 II by Routledge

2 Park Square, Milton Park, Abingdon, Oxon OXI4 4RN
711 Third Avenue, New York, NY 10017
Routledge is an imprint a/Taylor & Francis Group, an in/orma business
First published 1970
© Peter F, Drucker 1958, 1959, 1961, 1966, 1967, 1969, 1970
Major portions of this work were previously published in Harvard Business

Review, Technology and Culture, Management Science, The Journal of
Business of the University of Chicago, and The McKinsey Quarterly
Chapters I and 6 are reprinted from Management Today by permission of

Management Publications Ltd
Chapters 4 and 5 are reprinted from Technology in Western Civilization, volume

2, edited by Melvin Kranzberg and Carroll W. Pursell, Jr. Copyright © 1967
by the Regents of the University of Wisconsin. Reprinted by permission of
Oxford University Press
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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library
ISBN 0 434 90396 5
Contents
Preface vli
1. Information, Communications, and Understanding 1
2. Management's New Role 21
3. Work and Tools 37
4. Technological Trends in the Twentieth Century 48
5. Technology and Society in the Twentieth Century 64
6. The Once and Future Manager 79
7. The First Technological Revolution and Its Lessons 99
8. Long-range Planning 109
9. Business Objectives and Survival Needs 126
10. The Manager and the Moron 141
11. The Technological Revolution: Notes on the Rela-
tionship of Technology, Science, and Culture 151
12. Can Management Ever Be a Science? 163
Index 171
Preface
There should be underlying unity to a collection of essays.

There should be a point of view, a central theme, an organ point
around which the whole volume composes itself. And there is, I
believe, such fundamental unity to this volume of essays, even
though they date from more than a dozen years ago and discuss
a variety of topics. One of the essays, 'Work and Tools,' states:
'Technology is not about tools, it deals with how Man works.'
This might be the device of this entire volume, if not, indeed, for
my entire work over the years.
All the essays in this volume deal with one or the other aspect
of what used to be called 'the material civilization': they all deal
with man's tools and his materials, with his institutions and
organizations, and with the way he works and makes his living.
But throughout, work and materials, organizations and a living
are seen as 'extensions of man', rather than as material artifacts
and part of inanimate nature. If I were to reflect on my own
position over the years, I would say that, from the very be-
ginning, I rejected the common nineteenth-century view which
divided man's society into 'culture', dealing with ideas and sym-
bols, and 'civilization', dealing with artifacts and things. 'Civi-
lization' to me has always been a part of man's personality, and
an area in which he expressed his basic ideals, his dreams, his
aspirations, and his values. Some of the essays in this volume
are about technology and its history. Some are about manage-
ment and managers. Some are about specific tools - the com-
puter, for instance. But all of them are about man at work; all
are about man trying to make himself effective.
An essay collection, however, should also have diversity. It

should break an author's thought and work the way a prism
vili Pr~~e
breaks light. Indeed, the truly enjoyable essay collection is full
of surprises as the same author. dealing with very much the
same areas, is suddenly revealed in new guises and suddenly
reveals new facets of his subject. The essays collected in this
volume deal with only one of the major areas that have been of
concern to me - the area of the 'material civilization'. But there
is a good deal of variety in them. Five of the twelve essays in this
volume deal with technology. its history. and its impact on man
and his culture. They range in time. however, from a look at the
'first technological revolution'. seven thousand years ago, when
the irrigation cities created what we still call 'modem civi·
lization'. to an attempt to evaluate the position of technology in
our present century. They all assume that history cannot be
written, let alone make sense, unless it takes technology into
account and is aware of the development of man's tools and his
use of them through the ages. This, needless to say, is not a
position historians traditionally have held; there are only signs
so far that they are beginning to realize that technology has been
with us from the earliest date and has always been an intimate
and integral part of man's experience. man's society. and man's
history. At the same time, these essays all assume that the tech-
nologist, to use his tools constructively. has to know a good deal
of history and has to see himself and his discipline in relation-
ship to man and society - and that has been an even less popular
position among technologists than the emphasis on technology
has been among historians.
Four essays in this volume - the first two, the essay, 'The
Once and Future Manager', and the essay on 'Business Objec-
tives and Survival Needs' - look upon the manager as the
agent of today's society and upon management as a central
social function. They assume that managers handle tools, as-
sume that managers know their tools thoroughly and are willing
to acquire new ones as needed. But. above all, they ask the
question. 'What results do we expect from the manager; what
results does his enterprise. whether a business or a govern-
ment agency, need from him? What results. above all, do our
society and the human beings that compose it have a right to
expect from a manager and from management?' The con-
cern is with management as it affects the quality of life - that
Preface ix
management can provide the quantities of life is taken as proven.
The remaining three essays ('Long-range Planning', 'The
Manager and the Moron', and 'Can Management Ever Be a
Science?' deal with basic approaches and techniques. They are
focused on management within the enterprise rather than on
management as a social function. But they stress constantly the
purpose of management, which is not to be efficient but to be
productive, for the human being, for economy, for society.
An essay collection, finally, should convey the personality of
the author better than a book can. This is why I enjoy reading
essays. It should bring out a man's style, a man's wit, and the
texture of a man's mind. Whether this essay collection does this,
I leave to the reader to judge. But I do hope that these twelve
essays of mine, written for different purposes and at different
times since 1957, will also help to establish the bond between
author and writer, which, in the last analysis. is why a writer
writes and a reader reads.
PETER F. DRUCKER
Montclair, New Jersey
1. Information,
Communications,
and Understanding
CONCERN with 'information' and 'communications' started

shortly before World War I. Russell and Whitehead's Principia
Mathematica, which appeared in 1910, is still one of the foun~
dation books. And a long line of illustrious successors - from
Ludwig Wittgenstein through Norbert Wiener and A. N.
Chomsky's 'mathematical linguistics' today - has continued the
work on the logic of information. Roughly contemporaneous is
the interest in the meaning of communication; Alfred Korzybski
started on the study of 'general semantics'. i.e. on the meaning
of communications, around the turn of the century. It was
World War I, however. which made the entire Western world
communications-conscious. When the diplomatic documents of
1914 in the German and Russian achives were published,
soon after the end of the fighting. it became appallingly clear
that the catastrophe had been caused, in large measure, by com-
munications failure despite copious and reliable information.
And the war itself - especially the total failure of its one and
only strategic concept, Winston Churchill's Gallipoli campaign
in 1915-16 - was patently a tragicomedy of noncommunica-
tions. At the same time, the period immediately following World
War I - a period of industrial strife and of total non-
communication between Westerners and 'revolutionary' Com-
Paper read before the Fellows of the International Academy of Manage-
ment, Tokyo, Japan, October 1969. Published in Management Today, March
1970, as 'What Communication Means',
2 Technology, Management, and Society
munists (and a little later, a equally revolutionary Fascists) -
showed both the need for. and the lack of, a valid theory or a
functioning practice of communications. inside existing insti-
tutions. inside existing societies. and between various leadership
groups and ther various 'publics' .
As a result, communications suddenly became, forty to fifty
years ago, a consuming interest of scholars as well as of prac-
titioners. Above all. communications in management has this
last half century been a central concern to students and prac-
titioners in all institutions - business, the military, public admin-
istration, hospital administration, university administration,
and research administration. In no other area have intelligent
men and women worked harder or with greater dedication than
psychologists, human relations experts, managers. and manage-
ment students have worked on improving communications in
our major institutions.
We have more attempts at communications today. that is,
more attempts to talk to others, and a surfeit of communications
media, unimaginable to the men who. around the time of World
War I. started to work on the problems of communicating. The
trickle of books on communications has become a raging tor-
rent. I recently received a bibliography prepared for a graduate
seminar on communications; it ran to ninety-seven pages. A
recent anthology (The Human Dialogue. edited by Floyd W.
Matson and Ashley Montagu; London: Collier-Macmillan,
1967) contains articles by forty-nine different contributors.
Yet communications has proven as elusive as the unicorn.
Each of the forty-nine contributors to The Human Dialogue has
a theory of communications which is incompatible with all the
others. The noise level has gone up so fast that no one can really
listen any more to all that babble about communications. But
there is clearly less and less communicating. The com-
munications gap within institutions and between groups in
scoiety has been widening steadily - to the point where it
threatens to become an unbridgeable gulf of total mis-
understanding.
In the meantime, there is an information explosion. Every
professional and every executive - in fact, everyone except the
deaf-mute - suddenly has access to data in inexhaustible abun-
Information. Communications, and Understanding 3
dance. All of us feel- and overeat - very much like the little boy
who has been left alone in the candy store. But what has to be
done to make this cornucopia of data redound to information,
let alone to knowledge? We get a great many answers. But the
one thing clear so far is that no one really has an answer. De-
spite 'information theory' and 'data processing'. no one yet has
actually seen, let alone used, an 'information system'. or a 'data
base'. The one thing we do know, though, is that the abundance
of information changes the communications problem and
makes it both more urgent and even less tractable.
There is a tendency today to give up on communications. In
psychology, for instance, the fashion today is the T-group with
its 'sensitivity training'. The avowed aim is not communications,
but self-awareness. T-groups focus on the 'I' and not on the
'thou'. Ten or twenty years ago the rhetoric stressed 'empathy';
now it stresses 'doing one's thing', However needed self-knowl-
edge may be, communication is needed at least as much (if,
indeed, self-knowledge is possible without action on others, that
is, without communications). Whether the T-groups are sound
psychology and effective psychotherapy is well beyond my com-
petence and the scope of this paper. But their popularity attests
to the failure of our attempts at communications.
Despite the sorry state of communications in theory and prac-
tice, we have. however,learned a good deal about information
and communications. Most of it, though, has not come out of
the work on communications to which we have devoted so much
time and energy. It has been the by product of work in a large
number of seemingly unrelated fields, from learning theory to
genetics and electronic engineering. We equally have a lot of
experience - though mostly of failure - in a good many practical
situations in all kinds of institutions. Communications we may.
indeed, never understand. But communications in organizations
- call it managerial communications - we do know something
about by now. It is a much narrower topic than communications
per se - but it is the topic to which this paper shall address
itself.
We are. to be sure, still far away from mastery of com-
munications. even in organizations. What knowledge we have
about corrmmmcations is scattered and, as a rule, not accessible.
let alone in applicable form. But at least we increasingly know
what does not work and, sometimes, why it does not work.
Indeed, we can say bluntly that most of today's brave attempts
at communication in organizations - whether business, labour
unions, government agencies, or universities - is based on as-
sumptions that have been proven to be invalid - and that, there..
fore, these efforts cannot have results. And perhaps we can even
anticipate what might work.
WHAT WE HAVE LEARNED

We have learned, mostly through doing the ,wong things, the
following four fundamentals of communications:
(1) Communication is perception,
(2) Communication is expectations,
(3) Communication is involvement,
(4) Communication and information are totally different
But information presupposes functioning communi-
cations.
Communication is Perception
An old riddle asked by the mystics of many religions - the Zen
Buddhists, the Sufis of Islam, or the rabbis of the Talmud - asks:
'Is there a sound in the forest if a tree crashes down and no one is
around to hear it?' We now know that the right answer to this is
'no'. There are sound waves. But there is no sound unless some-
one perceives it. Sound is created by perception. Sound is com-
munication.
This may seem trite; after all, the mystics of old already knew
this, for they, too, always answered that there is no sound unless
someone can hear it. Yet the implications of this rather trite
statement are great indeed.
(a) First, it means that it is the recipient who com-
municates. The so-called communicator, that is, the person who
emits the communication, does not communicate. He utters.
Unless there is someone who hears, there is no communication.
There is only noise. The communicator speaks or writes or sings
- but he does not communicate. Indeed he cannot communicate.
Informmion, Communications, and Understanding 5
He can only make it possible, or impossible, for a recipient - or
rather percipient - to perceive.
(b) Perception, we know, is not logic. It is experience. This
means, in the first place. that one always perceives a
configuration. One cannot perceive single specifics. They are
always part of a total picture. The Silent Language (as Edward
T. Hall called it in the title of his pioneering work ten years ago)
- that is, the gestures, the tone of voice, the environment all
together, not to mention the cultural and social referents - can-
not be dissociated from the spoken language. In fact, without
them the spoken word has no meaning and cannot com-
municate. It is not only that the same words, e.g. 'J enjoyed
meeting you', will be heard as having a wide variety of mean-
ings. Wnether they are heard as warm or as icy cold, as endear-
ment or as rejection, depends on their setting in the silent
language, such as the tone of voice or the occasion. More im-
portant is that by themselves, that is, without being part of the
total configuration of occasion, value silent language, and so on,
the phrase has no meaning at all. By itself it cannot make pos-
sible communication. It cannot be understood. Indeed, it cannot
be heard. To paraphrase an old proverb of the Human Re-
lations school: 'One cannot communicate a word; the whole
man always comes with it'.
(c) But we know about perception also that one can only
perceive what one is capable of perceiving. Just as the human
ear does not hear sounds above a certain pitch, so does human
perception all together not perceive what is beyond its range of
perception. It may, of course, hear physically, or see visually,
but it cannot accept. The stimulus cannot become com-
munication.
This is a very fancy way of stating something the teachers of
rhetoric have known for a very long time - though the prac-
titioners of communications tend to forget it again and again. In
Plato's Phaedrus, which, among other things, is also the earliest
extant treatise on rhetoric, Socrates points out that one has to
talk to people in terms of their own experience, that is, that one
has to use a carpenter's metaphors when talking to carpenters,
and so on. One can only communicate in the recipient's
language or altogether in his terms. And the terms have to be
experience-based. It, therefore. does very little good to try to
explain terms to people. They will not be able to receive them if
the terms are not of their own experience. They simply exceed
their perception capacity.
The connection betweeen experience, perception, and con-
cept formation, that is, cognition, is, we now know, infinitely
subtler and richer than any earlier philosopher imagined. But
one fact is proven and comes out strongly in the most disparate
work, e.g. that of Piaget in Switzerland, that of B.F. Skinner of
Harvard, or that of Jerome Bruner (also of Harvard). Percept
and concept in the learner, whether child or adult, are not sep-
arate. We cannot perceive unless we also conceive. But we also
cannot form concepts unless we can perceive. To communicate
a concept is impossible unless the recipient can perceive it, that
is, unless it is within his perception.
There is a very old saying among writers: 'Difficulties with a
sentence always mean confused thinking. It is not the sentence
that needs straightening out. it is the thought behind it'. In writ-
ing we attempt, of course. to communicate with ourselves. An
unclear sentence is one that exceeds our own capacity for per-
ception. Working on the sentence. that is, working on what is
normally called communications, cannot solve the problem. We
have to work on our own concepts first to be able to understand
what we are trying to say - and only then can we write the
sentence.
In communicating, whatever the medium, the first question
has to be, 'Is this communication within the recipient's range of
perception? Can he receive it?'
The 'range of perception' is, of course, physiological and
largely (though not entirely) set by physical limitations of man's
animal body. When we speak of communications, however, the
most important limitations on perception are usually cultural
and emotional rather than physical. That fanatics are not being
convinced by rational arguments, we have known for thousands
of years. Now we are beginning to understand that it is not
'argument' that is lacking. Fanatics do not have the ability to
perceive a communication which goes beyond their range of
emotions. Before this is possible, their emotions would have to
be altered. In other words, no one is really 'in touch with reality'.
Information, Communications, and Understanding 7
if by that we mean complete openness to evidence. The dis-
tinction between sanity and paranoia is not in the ability to
perceive. but in the ability to learn, that is, in the ability to
change one's emotions on the basis of experience.
That perception is conditioned by what we are capable of
perceiving was realized forty years ago by the most quoted but
probably least heeded of all students of organization. Mary
Parker Follett. especially in her collected essays, Dynamic Ad-
ministration (London: Management Publications Trust. 1949).
Follett taught that a disagreement or a conflict is likely not to be
about the answers, or, indeed, about anything ostensible. It is. in
most cases, the result of incongruity in perceptions. What A sees
so vividly, B does not see at all. And, therefore, what A argues
has no pertinence to B's concerns, and vice versa. Both, Follett
argued, are likely to see reality. But each is likely to see a
different aspect thereof. The world, and not only the material
world, is multidimensional. Yet one can only see one dimension
at a time. One rarely realizes that there could be other dim-
ensions. and that something that is so obvious to us and so
clearly validated by our emotional experience has other dim-
ensions. a back and sides, which are entirely different and
which, therefore, lead to entirely different perception. The old
story about the blind men and the elephant in which every one
of them, upon encountering this strange beast, feels one of the
elephant's parts, his leg, his trunk, his hide. and reports an
entirely different conclusion, each held tenaciously, is simply a
story of the human condition. And there is no possibility of
communication until this is understood and until he who has felt
the hide of the elephant goes over to him who has felt the leg and
feels the leg himself. There is no possibility of communications,
in other words. unless we first know what the recipient, the true
communicator, can see and why.
Communication is Expectations
We perceive, as a rule, what we expect to perceive. We see
largely what we expect to see, and we hear largely what we
expect to hear. That the unexpected may be resented is not the
important thing - though most of the writers on com-
munications in business or government think it is. What is truly
important is that the unexpected is usually not received at all. It
is either not seen or heard but ignored. Or it is misunderstood,
or
that is, mis-seen as the expected misheard as the expected.
On this we now have a century or more of experimentation.
The results are quite unambiguous. The human mind attempts
to fit impressions and stimuli into a frame of expectations. It
resists vigorously any attempts to make it 'change its mind'.
that is, to perceive what it does not expect to perceive or not to
perceive what it expects to perceive. It is, of course, possible to
alert the human mind to the fact that what it perceives is COll-
trary to its expectations. But this first requires that we under-
stand what it expects to perceive. It then requires that there be
an unmistakable signal- 'this is different', that is, a shock which
breaks continuity. A 'gradual' change in which the mind is
supposedly led by small, incremental steps to realize that what is
perceived is not what it expects to perceive will not work. It will
rather reinforce the expectations and will make it even more
certain that what will be perceived is what the recipient expects
to perceive.
Before we can communicate, we must, therefore, know what
the recipient expects to see and to hear. Only then can we know
whether communication can utilize his expectations - and what
they are - or whether there is need for the 'shock of alienation',
for an 'awakening' that breaks through the recipient's expec-
tations and forces him to reali7,.c that the unexpected is hap-
pening.
Communication is Involvement
Marry years ago psychologists stumbled on a strange phenom-
enon in their studies of memory, a phenomenon that, at first,
upset all their hypotheses. In order to test memory, the psycho-
logists compiled a list of words to be shown to their experimen-
tal subjects for varying times as a test of their retention capacity.
As control, a list of nonsense words, mere jumbles of letters,
were devised to find out to what extent understanding
influenced memory. Much to the surprise of these early exper-
imenters almost a century ago or so, their subjects (mostly stu-
In/ormation, Communications, and Understanding 9
dents, of course) showed totally uneven memory retention of
individual words. More surprising, they showed amazingly high
retention of the nonsense words. The explanation of the first
phenomenon is fairly obvious. Words are not mere information.
They do carry emotional charges. And. therefore, words with
unpleasant or threatening associations tend to be suppressed,
words with pleasant associations retained. In fact, this selective
retention by emotional association has since been used to con·
struct tests for emotional disorders and for personality
profiles.
The relatively high retention rate of nonsense words was a
greater problem. It was expected, after all, that no one would
really remember words that had no meaning at all. But it has
become clear over the years that the memory for these words,
though limited, exists precisely because these words have no
meaning. For this reason, they also make no demand. They are
truly neuter. In respect to them, memory could be said to be
truly mechanical, showing neither emotional preference nor
emotional rejection.
A similar phenomenon, known to every newspaper editor, is
the amazingly high readership and retention of the fillers, the
little three- or five-line bits of irrelevant incidental information
that are being used to balance a page. Why should anybody
want to read, let alone remember, that it first became fashion-
able to wear different-coloured hose on each leg at the court of
some long-forgotten duke? Why should anybody want to read,
let alone remember, when and where baking powder was first
used? Yet there is no doubt that these little titbits of irrelevancy
are read and, above all, that they are remembered far better
than almost anything in the daily paper except the great scream-
ing headlines of the catastrophes. The answer is that these fillers
make no demands. It is precisely their total irrelevancy that
accounts for their being remembered.
Communications are always propaganda. The emitter always
wants 'to get something across'. Propaganda, we now know, is
both a great deal more powerful than the rationalists with their
belief in 'open discussion' believe, and a great deal less powerful
than the mythmakers of propaganda, e.g. a Dr. Goebbels in the
Nazi regime, believed and wanted us to believe. Indeed, the
danger of total propaganda is not that the propaganda will be
believed. The danger is that nothing will be believed and that
every communication becomes suspect. In the end. no com-
munication is being received any more. Everything anyone says
is considered a demand and is resisted, resented, and in effect
not heard at all. The end results of total propaganda are not
fanatics, but cynics - but this, of course, may be even greater
and more dangerous corruption.
Communication, in other words, always makes demands. It
always demands that the recipient become somebody, do some-
thing, believe something. It always appeals to motivation. If, in
other words, communication fits in with the aspirations, the
values, the purposes of the recipient, it is powerful. If it goes
against his aspirations, his values, his motivations, it is likely not
to be received at all, or, at best, to be resisted. Of course, at its
most powerful, communication br..ngs about conversion, that is,
a change of personality, of values, beliefs, aspirations. But tbis
is the rare, existential event, and one against which the basic
psychological forces of every human being are strongly organ-
ized. Even the Lord, the Bible reports, first had to strike Saul
blind before he could raise him as Paul. Communications aiming
at conversion demand surrender. By and large, therefore, there
is no communication unless the message can key in to the rec~
ipienfs own values, at least to some degree.
Communication and Information are Different and Largely Op"

posite - Yet Interdependent
(a) Where communication is perception, information is logic.
As such, i..'1formation is purely fonnal and has no meaning. It is
impersonal rather than interpersonal. The more it can be freed
of the human component, that is, of such things as emotions and
values, expectations and perceptions. the more valid and re-
liable does it become. Indeed, it becomes increasingly infor~
mative.
All through history. the problem has been how to glean a little
information out of communications, that is, out of relationships
between people, based on perception. All through history, the
problem has been to isolate the information content from an
abundance of perception. Now, all of a sudden, we have the
capacity to provide information - both because of the con-
ceptual work of the logicians, especially the symbolic logic of
Russell and Whitehead, and because of the technical work on
data processing and data storage, that is. of course. especially
because of the computer and its tremendous capacity to store,
marJpulate, and transmit data. Now, in other words, we have the
opposite problem from the one mankind has always been strug-
gling with. Now we have the problem of handling information
per se, devoid of any communication content.
(b) The requirements for effective information are the op-
posite of those for effective communication. Information is, for
instance, always specific. We perceive a configuration in com-
munications; but we convey specific individual data in the in·
formation process. Indeed, information is, above all, a principle
of economy. The fewer data needed. the better the information.
And an overload of information, that is, anything much beyond
what is truly needed, leads to a complete information blackout.
It does not enrich, but impoverishes.
(c) At the same time. information presupposes com-
munication. Information is always encoded. To be received, let
alone to be used, the code must be known and understood by the
recipient. This requires prior agreement, that is, some com-
munication. At the very least, the recipient has to know what the
data pertain to. Are the figures on a piece of computer tape the
height of mountain tops or the cash balances of Federal Reserve
member banks? In either case, the recipient would have to know
what mountains are or what banks are to get any information
out of the data.
The prototype information system may well have been the
peculiar language known as Armee Deutsch (Army German),
which served as language of command in the Imperial Austrian
Army prior to 1918. A polyglot army in which officers. non-
commissioned officers, and men often had no language in com-
mon, it functioned remarkably well with fewer than two
hundred specific words. 'fire', for instance, or 'at ease', each of
which had only one totally unambiguous meaning. The meaning
was always an action. And the words were learned in and
through actions, i.e. in what behaviourists now call operant con-
ditioning. The tensions in the Austrian army after many decades
of nationalist turmoil were very great indeed. Social intercourse
between members of different nationalities serving in the same
unit became increasingly difficult, if not impossible. But to the
very end, the information system functioned. It was completely
formal, completely rigid, completely logical in that each word
had only one possible meaning; and it rested on completely pre-
established communication regarding the specific response to a
certain set of sound waves. This example, however, shows also
that the effectiveness of an information system depends on the
willingness and ability to think through carefully what infor-
mation is needed by whom for what purposes, and then on the
systematic creation of communication between the various par-
ties to the system as to the meaning of each specific input and
output. The effectiveness, in other words, depends on the pre-
establishment of communication.
(d) Communication communicates better the more levels of
meaning it has and the less possible it is, therefore. to quantify
it.
Medieval aesthetics held that a work of art communicates on
a number of levels, at least three if not four: the literal, the
metaphorical, the allegorical. and the symbolic. The work of art
that most consciously converted this theory into artistic practice
was, of course. Dante's Divina Commedia. If, by information,
we mean something that can be quantified. then the Divina
Commedia is without any information content whatever. But it
is precisely the ambiguity, the multiplicity of levels on which
this book can be read, from being a fairy tale to being a grand
synthesis of metaphysics. that makes it the overpowering work
of art it is, and the immediate communication which it has been
to generations of readers.
Communications, in other words, may not be dependent on
information. Indeed, the most perfect communications may be
purely shared experiences, without any logic whatever. Per-
ception has primacy rather than information.
I fully realire that this summary of what we have learned is

gross oversimplification. I fully realize that I have glossed over
Information. Communications, and Understanding 13
some of the most hotly contested issues in psychology and per-
ception. Indeed, I may well be accused of brushing aside most of
the issues which the students of learning and of perception
would themselves consider central and important.
But my aim has, of course, not been to survey these big areas.
My concern is not with learning or with perception. It is with
communications, and, in particular, with communications in
the large organization, be it business enterprise, government
agency, university, or armed service.
This summary might also be criticized for being trite, if not
obvious. No one, it might be said, could possibly be surprised at
its statements. They say what everybody knows. But whether
this be so or not, it is not what everybody does. On the contrary,
the logical implications of these apparently simple and obvious
statements for communications in organizations are at odds
with current practice and, indeed, deny validity to the honest
and serious efforts to communicate which we have been making
for many decades now.
What, then, can our knowledge and our experience teach us

about communications in organizations, about the reasons for our
failures, and about the prerequisites for success in the future?
(l) For centuries we have attempted communication down-
ward. This. however. cannot work. no matter how hard and how
intelligently we try. It cannot work. first, because it focuses on
what we want to say. It assumes, in other words, that the utterer
communicates. But we know that all he does is utter. Com-
munication is the act of the recipient. What we have been trying
to do is to work on the emitter, specifically on the manager, the
administrator, the commander, to make him capable of being a
better communicator. But all one can communicate downward
are commands, that is, prearranged signals. One cannot com-
municate downward anything connected with understanding,
let alone with motivation. This requires communication up-
ward; from those who perceive to those who want to reach their
perception.
This does not mean that managers should stop working on
clarity in what they say or write. Far from it. But it does mean
that how we say something comes only after we have learned
what to say. And this cannot be found out by 'talking to', no
matter how well it is being done. 'Letters to the Employees'. no
matter how well done, will be a waste unless the writer knows
what employees can perceive, expect to perceive, and want to
do. They are a waste unless they are based on the recipient's
rather than the emitter's perception.
(2) But 'listening' does not work either. The Human Ro-
la tions School of Elton Mayo, forty years ago, recognized the
failure of the traditional approach to communications. Its
answer - especially as developed in Mayo's two famous books.
The Human Problems of an Industrial Civilization (2nd edn.,
Boston: Harvard University, 1946) and The Social Problems of
an Industrial Civilization (Boston: Harvard University, 1945)-
was to enjoin listening. Instead of starting out with what I, that
is, the executive, want to get across. the executive should start
out by finding out what subordinates want to know, are
interested in, are, in other words, receptive to. To this day, the
human relations prescription, though rarely practised, remains
the classic formula.
Of course, listening is a prerequisite to communication. But it
is not adequate, and it cannot. by itself. work. Perhaps the
reason why it is not being used widely. despite the popularity of
the slogan. is precisely that, where tried, it has failed to work.
Listening first assumes that the superior will understand what
he is being told. It assumes. in other words, that the sub-
ordinates can communicate. It is hard to see, however, why the
subordinate should be able to do what his superior cannot do. In
fact, there is no reason for assuming he can. There is no reason,
in other words, to believe that listening results any less in mis-
understanding and miscommunications than does talking. In
addition, the theory of listening does not take into account that
communications is involvement. It does not bring out the sub-
ordinate's preferences and desires, his values and aspirations. It
may explain the reasons for misunderstanding. But it does not
lay down a basis for understanding.
This is not to say that listening is wrong. any more than the
futility of downward communications furnishes any argument
against attempts to write well, to say things clearly and simply,
Information, Commu"fIicatiof'.s, and Understanding 15
and to speak the language of those whom one addresses rather
than one's own jargon. Indeed, the realization that com-
munications have to be upward - or rather that they have to
start with the recipient, rather than the emitter, which underlies
the concept of listening - is absolutely sound and vital. But
listening is only the starting point.
(3) More and better information does not solve the com-
munications problem, does not bridge the communications gap.
On the contrary. the more information the greater is the need
for functioning and effective communication. The more in-
formation, in other words, the greater is the communications
gap likely to be.
The more impersonal and formal the information process in
the first plac-e, the more win it depend on prior agreement on
meaning and application, that is, on communications. In the
sP...cond place. the more effective the information process, the
more impersonal and formal will it become, the more will it
separate human beings and thereby require separate, but also
much greater, efforts, to re-establish the human relationship. the
relationship of communication. It may be said that the
effectiveness of the information process will depend increasingly
on our ability to communicate, and that, in the absence of
effective communication - that is, in the present situation - the
information revolution cannot really produce information. All it
can produce is data.
It can also be said - and this may well be more important -
that the test of an information system will increasingly be the
degree to which it frees human beings from concern with infor-
mation and allows them to work on communications. The test,
in particular, of the computer will be how much time it gives
executives and professionals on all levels for direct, personal,
face-to-face relationships with other people.
It is fashionable today to measure the utilization of a com·
puter by the number of hours it runs during one day. But this is
not even a measurement of the computer's efficiency. It is purely
a measurement of input. The only measurement of output is the
degree to which availability of information enables human be-
ings not to control, that is, not to spend time trying to get a little
information on what happened yesterday. And the only
measurement of this, in tum, is the amount of time that becomes
available for the job only human beings can do, the job of com-
munication. By this test. of course, almost no computer today is
being used properly. Most of them are being misused, that is,
are being used to justify spending even more time on control
rather than to relieve human beings from controlling by giving
them information. The reason for this is quite clearly the lack of
prior communication, that is, of agreement and decision on
what information is needed, by whom and for what purposes,
and what it means operationally. The reason for the misuse of
the computer is, so to speak, the lack of anything comparable to
the Armee Deutsch of yesterday's much-ridiculed Imperial Aus-
trian Army with its two hundred words of command which even
the dumbest recruit could learn in two weeks' time.
The Information Explosion, in other words, is the most im-
pelling reason to go to work on communications. Indeed, the
frightening communications gap all around us - between man-
agement and workers; between business and government; be-
tween faculty and students, and between both of them and
university administration; between producers and consumers;
and so on - may well reflect in some measure the tremendous
increase in information without a commensurate increase in
communications.
Can we then say anything constructive about communication?

Can we do anything? We can say that communication has to
start from the intended recipient of communications rather than
from the emitter. In terms of traditional organization we have to
start upward. Downward communications cannot work and do
not work. They come after upward communications have suc-
cessfully been established. They are reaction rather than action,
response rather than initiative.
But we can also say that it is not enough to listen. The upward
communication must first be focused on something that both
recipient and emitter can perceive, focused on something that is
common to both of them. And second, it must be focused on the
motivation of the intended recipient. It must, from the be-
ginning, be informed by his values, beliefs, and aspirations.
One example - but only an example: There have been prom-
ising results with organizational communication that started out
with the demand by the superior that the subordinate think
through and present to the superior his own conclusions as to
what major contribution to the organization - or to the unit
within the organization - the subordinate should be expected to
perform and should be held accountable for. What the sub-
ordinate then comes up with is rarely what the superior expects.
Indeed, the first aim of the exercise is precisely to bring out the
divergence in perception between superior and subordinate. But
the perception is focused, and focused on something that is real
to both parties. To realize that they see the same reality
differently is in itself already communication.
Second, in this approach, the intended recipient of com-
munication - in this case the subordinate - is given access to
experience that enables him to understand. He is given access
to the reality of decision making, the problems of priorities, the
choice between what one likes to do and what the situation
demands, and above all, the responsibility for a decision. He
may not see the situation the same way the superior does - in
fact, he rarely will or even should. But he may gain an under-
standing of the complexity of the superior's situation, and above
all of the fact that the complexity is not of the superior's mak-
ing, but is inherent in the situation itself.
Finally, the communication, even if it consists of a 'no' to the
subordinate's conclusions, is firmly focused on the aspirations,
values, and motivation of the intended recipient. In fact. it starts
out with the question, 'What would you want to do?' It may then
end up with the command, 'This is what I tell you to do'. But at
least it forces the superior to realize that he is overriding the
desires of the subordinate. It forces him to explain, if not to try
to persuade. At least he knows that he has a problem - and so
does the subordinate.
A similar approach has worked in another organizational
situation in which communication has been traditionally absent:
the performance appraisal, and especially the appraisal inter-
view. Performance appraisal is today standard in large organ-
izations (except in Japan, where promotion and pay go by
seniority so that performance appraisal would serve little pur-
pose). We know that most people want to know where they
stand. One of the most common complaints of employees in
organizations is, indeed, that they are not being appraised and
are not being told whether they do well or poorly.
The appraisal forms may be filled out. But the appraisal inter-
view in which the appraiser is expected to discuss his per-
formance with a man is ahnost never conducted. The exceptions
are a few organizations in which performance appraisals are
considered a communications tool rather than a rating device.
This means specifically that the performance appraisal starts
out with the question. 'What has this man done well?' It then
asks, 'And what, therefore, should he be able to do well?' And
then it asks, 'And what would he have to learn or to acquire to
be able to get the most from his capacities and achievements?'
This. first. focuses on specific achievement. It focuses on things
the employee himself is likely to perceive clearly and. in fact,
gladly. It also focuses on his own aspirations, values, and de-
sires. Weaknesses are then seen as limitations to what the em-
ployee himself can do well and wants to do, rather than as
defects. Indeed, the proper conclusion from this approach to
appraisal is not the question, 'What should the employee do?'
but 'What should the organization and I, bis boss. do?' A proper
conclusion is not 'What does tbis communicate to the em·
ployee?' It is 'What does this communicate to both of us, sub-
ordinate and superior?'
These are only examples, and rather insignificant ones at that.
But perhaps they illustrate conclusions to which our experience
with communications - largely an experience of failure - and
the work in learning, memory, perception, and motivation
point.
The start of communications in organization must be to get
the intended recipient himself to try to communicate. This re-
quires a focus on (a) the impersonal but common 'task, and (b)
on the intended recipient's values, achievements, and aspir-
ations.1t also requires the experience of responsibility.
Perception is limited by what can be perceived and geared to
what one expects to perceive. Perception, in other words, pre-
supposes experience. Communication within organization,
therefore, presupposes that the members of the organization
lnformalion, Communications, and Understanding 19
have the foundation of experience to receive and perceive. The
artist can convey this experience in symbolical fonn: he can
communicate what his readers or viewers have never experi-
enced. But ordinary managers, administrators, and professors
are not likely to be artists. The recipients must, therefore, have
actual experience themselves and directly rather than through
the vicarious symbols.
Communications in organization demands that the masses,
whether they be employees or students, share in the respon-
sibility of decisions to the fullest possible extent. They must
understand because they have been through it, rather than ac-
cept because it is being explained to them.
I shall never forget the German trade union leader, a faithful
Socialist, who was shattered by his first exposure to the delib-
erations of the Board of Overseers of a large company to which
he had been elected as an employee member. That the amount
of money available was limited and that, indeed, there was very
little money available for all the demands that had to be met,
was one surprise. But the pain and complexity of the decisions
between various investments, e.g. between modernizing the
plant to safeguard workers' jobs and building workers' houses
to safeguard their health and family life, was a much bigger and
totally unexpected experience. But, as he told me with a half-
sheepish, half-rueful grin, the greatest shocker was the real-
ization that all the things he considered important turned out to
be irrelevant to the decisions in which he found himself taking
an active and responsible part. Yet this man was neither stupid
nor dogmatic. He was simply inexperienced - and, therefore,
inaccessible to communication.
The traditional defence of paternalism has always been 'It's a

complex world; it needs the expert, the man who knows best.'
But paternalism, as our work in perception, learning, and mo-
tivation is beginni...-rtg to bring out, really can work only in a
simple world. When people can understand what Papa does
because they share his experiences and his perception, then
Papa can actually make the decisions for them. In a complex
world there is need for a shared experience in the decisions. or
there is no common perception, no communications, and. there-
fore, neither acceptance of the decisions, nor ability to carry
them out. The ability to understand presupposes prior com-
munication. It presupposes agreement on meaning.
There will be no communication, in sum, if it is conceived as
going from the '1' to the 'Thou'. Communication only works
from one member of 'us' to another. Communications in organ-
ization - and this may be the true lesson of our communications
failure and the true measure of our communications need - are
not a means of organization. They are a mode of organiza-
tion.
2. Management's
New Role
THE major assumptions on which both the theory and the

practice of management have been based these past fifty years
are rapidly becoming inappropriate. A few of these assump-
tions are actually no longer valid and. in fact. are obsolete.
Others, while still applicable, are fast becoming inadequate; they
deal with what is increasingly the secondary, the subordinate,
the exceptional, rather than with the primary, the dominant, the
ruling function and reality of management. Yet most men of
management. practitioners and theoreticians alike, still take
these traditional assumptions for granted.
To a considerable extent the obsolescence and inadequacy of
these assumed verities of management reflect management's
own success. For management has been the success story par
excellence of these last fifty years - more so even than science.
But to an even greater extent, the traditional assumptions of
management scholar and management practitioner are being
outmoded by independent - or at least only partially dependent
- developments in society, in economy, and in the world view of
our age, especially in the developed countries. To a large extent
objective reality is changing around the manager - and fast.
Managers everywhere are very conscious of new concepts
and new tools of management, of new concepts of organization,
for instance. or of the 'information revolution'. These changes
within management are indeed of great importance. But more
important yet may be the changes in the basic realities and their
Keynote address given at the 15th CIOS International Management Con-
gress, Tokyo, Japan, S November 1969.
impact on the fundamental assumptions underlying manage-
ment as a discipline and as a practice. The changes in mana-
gerial concepts and tools will force managers to change their
behaviour. The changes in reality demand, however, a change in
the manager's role. The changes in concepts and tools mean
changes in what a manager does and how he does it. The change
in basic role means a change in what a manager is.
THE OLD ASSUMPTIONS

Six assumptions may have formed the foundation of the theory
and practice of management this last half century. Few prac-
titioners of management have, of course, ever been conscious of
them. Even the management scholars have. as a rule. rarely
stated them explicitly. But both practitioners and theorists alike
have accepted these assumptions, have, indeed, treated them
as self-evident axioms and have based their actions, as well as
their theories. on them.
These assumptions deal with
- the scope,
- the task,
- the position. and
- the nature of management.
ASSUMPTION ONE: Management is management of business.

and business is unique and the exception in society.
This assumption is held subconsciously rather than in full

awareness. It is, however, inescapably implied in the view of
society which most of us still take for granted whether we are
'Right' or 'Left', 'conservative', 'liberal', or 'radical', 'capital-
ists' or 'communists': the view of European (French and
English) seventeenth-century social theory which postulates a
society in which there is only one organized power centre, the
national government, assumed to be sovereign though self-
limited, with the rest of society essentially composed of the
social molecules of individual families. Business. if seen at all
in this view, is seen as the one exception, the one organized
Management's New Role 23
institution. Management, therefore, is seen as confined to the
special, the atypical, the isolated institution of the economic
sphere, i.e. to business enterprise. The nature as well as the
characteristics of management are, in the traditional view,
thus very largely grounded in the nature and the charac-
teristics of business activity. One is 'for management' if one is
'for business', and vice versa. And somehow, in this view,
economic activity is quite different from all other human con-
cerns - to the point where it has become fashionable to speak
of 'the economic concern' as opposed to 'human concerns' .
ASSUMPTION TWO: 'Social responsibilities' of management,

that is, concerns that cannot be encompassed within an econ-
omic calculus, are restraints and limitations imposed on man-
agement rather than mmlagement objectives and tasks. They are
to be discharged largely without the enterprise and outside of
management's normal working day. At the same time and be-
cause business is assumed to be the one exception, only business
has social responsibilities; indeed, the common phrase is 'the
social responsibilities of business'. University, hospital, or
government agencies are clearly not assumed, in the traditional
view, to have any social responsibilities.
This view derives directly from the belief that business is

the, one, the exceptional institution. University and hospital
are not assumed to have any social responsibility primarily
because they are not within the purview of the traditional
vision - they are simply not seen at all as 'organizations'.
Moreover, the traditional view of a social responsibility
peculiar, and confined, to business derives from the assump-
tions that economic activity differs drastically from other hu-
man activities (if, indeed, it is even seen as a 'normal' human
activity), and that 'profit' is something extraneous to the econ-
omic process and imposed on it by the 'capitalist' rather than
an intrinsic necessity of any economic activity whatever.
ASSUMPTION THREE: The primary, perhaps the only, task of

management is to mobilize the energies of the business organ-
ization for the accomplishment of known and defined tasks. The
tests are efficiency in doing what is already being done, and
adaptation to changes outside. Entrepreneurship and inno-
vation - other than systematic research -lie outside the manage-
ment scope.
To a large extent this assumption was a necessity during

the last half century. The new fact then was, after all, not
entrepreneurship and innovation with which the developed
countries had been living for several hundred years. The new
fact of the world of 1900, when concern with management
first arose. was the large and complex organization for pro-
duction and distribution with which the traditional mana-
gerial systems. whether of workshop or of local store, could
not cope. The invention of the steam locomotive was not what
triggered concern with management. Rather it was the emerg-
ence, some fifty years later, of the large railroad company
which could handle steam locomotives without much trouble
but was baffled by the problem of co-ordination between
people, of communication between them. and of their author-
ities and responsibilities.
But the focus on the managerial side of management - to
the almost total neglect of entrepreneurship as a function of
management - also reflects the reality of the economy in the
half century since World War I. It was a period of high tech-
nological and entrepreneurial continuity. a period that re-
quired adaptation rather than innovation, and ability to do
better rather than courage to do differently.*
The long and hard resistance against management on the
part of the German Unternehmer or French patron reflects in
large measure a linguistic misunderstanding. There is no
German or French word that adequately renders man-
agement, just as there is no English word for entrepreneur
(which has remained a foreigner after almost two hundred
years of sojourn in the English-speaking world). In part this
resistance arises out of peculiarities of economic structure,
e.g. the role of the commercial banks in Germany which
makes the industrialist concerned for his autonomy stress the
• As documented in some detail in my book, The Age of Discontinuity
(London: Heinemann, 1969).
'charisma' of the Unternehmer against the impersonal pro-
fessionalism of the 'manager'. In part also 'management' is
classless and derives its authority from its objective function
rather than, as does German Unternehmer or French patron.
from ownership or social class. But surely one of the main
reasons for the resistance against 'management' - both as a
term and as a concept - on the continent of Europe has been
the - largely subconscious - emphasis on the managerial
internal task as against the external, entrepreneurial. inno-
vation function.
ASSUMPTION FOUR: It is the manual worker - skilled or

unskilled - who is management's concern as resource, as a cost
centre, and as a social and individual problem.
To have made the manual worker productive is, indeed, the

greatest achievement of management to date. Frederick Win-
slow Taylor's 'Scientific Management' is often attacked
these days (though mostly by people who have not read Tay-
lor). But it was his insistence on studying work that underlies
the affiuence of today's developed countries; it raised the pro-
ductivity of manual work to the point where yesterday'S
'labourer' - a proletarian condemned to an income at the
margin of subsistence by 'the iron law of wages' and to com-
plete uncertainty of employment from day to day - has be-
come the 'semiskilled worker' of today's mass production
industries with a middle-class standard of living and guaran-
teed job or income security. And Taylor thereby found the
way out of the apparently hopeless impasse of nineteenth-
century 'class war' between the 'capitalist exploitation' of the
labouring man and the 'proletarian dictatorship'.
As late as World War II, the central concern was still the
productivity and management of manual work; the central
achievement of both the British and the American war econ-
omies was the mobilization, training, and managing of pro-
duction workers in large numbers. Even in the postwar
period one major task - in all developed countries other than
Great Britain - was the rapid conversion of immigrants from
the farm into productive manual workers in industry. On this
26 Technology, Management. and Society
accomplishment - made possible only because of the
'Scientific Management' which Taylor pioneered seventy
years ago - the economic growth and performance of Japan,
of Western Europe, and even of the United States largely
rest.
ASSUMPTION FIVE: Management is a 'science' or at least a

'discipline', that is, it is as independent of cultural values and
individual beliefs as are the elementary operations of arith-
metic, the laws of physics, or the stress tables of the engineer.
But all management is being practised within one distinct
national environment and embedded in one national culture,
circumscribed by one legal code and part of one national econ-
omy.
These two propositions were as obvious to Taylor in the

United States as they were to Fayol in France. Of all the early
management authorities only Rathenau in Germany seemed
to have doubted that management was an 'objective', i.e. cul-
ture-free, discipline - and no one listened to him. The Human
Relations school attacked Taylor as 'unscientific'; they did
not attack Taylor's premise that there was an objective
'science' of management. On the contrary, the Human Re-
lations school proclaimed its findings to be 'true' scientific
psychology and grounded in the 'Nature of Man'. It refused
even to take into account the findings of its own colleagues in
the social sciences, the cultural anthropologists. Insofar as
cultural factors were considered at all in the traditional as-
sumptions of management, they were 'obstacles'. It is still
almost axiomatic in management that social and economic
development requires the abandonment of 'nonscientific',
i.e. traditional cultural beliefs, values, and habits. And the
Russians, e.g. in their approach to Chinese development
under Stalin, differ no whit from the Americans or the Ger Q
mans in respect to this assumption. That, however, the as~

sumption is little but Western narrowness and cultural
egocentricity, one look at the development of Japan would
have shown.
At the same time, management theory and practice saw in
the national state and its economy the 'natural' habitat of
business enterprise - as did (and still does), of course, all our
political, legal, and economic theory.
ASSUMPTION SIX: Management is the result of economic

development.
This had, of course, been the historical experience in the
West (though not in Japan where the great organizers such as
Mitsui, Iwasaki. Shibusawa. came first, and where economic
development, clearly, was the result of management). But
even in the West the traditional explanation of the emergence
of management was largely myth. As the textbooks had it
(and still largely have it), management came into being when
the small business outgrew the owner who had done every-
thing himself. In reality. management evolved in enterprises
that started big and could never have been anything but big -
the railways in particular, but also the postal service, the
steanlship companies, the steel mills, and the department
stores. To industries that could start small, management came
very late; some of those, e.g. the textile mill or the bank, are
still often run on the pattern of the 'one boss' who does every-
thing and who, at best, has 'helpers'. But even where this was
seen - and Fayol as well as Rathenau apparently realized that
management was a function rather than a stage - management
was seen as a result rather than as a cause, and as a response
to needs rather than as a creator of opportunity.
>I<
*
I fully realize that I have oversimplified - grossly so. But I do
not believe that I have misrepresented our traditional assump-
tions. Nor do I believe that I am mistaken that these assump-
tions. in one form or another. still underlie both the theory and
the practice of management, especially in the industrially de-
veloped nations.
- AND THE NEW REALITIES
Today, however, we need quite different assumptions. They,

too, of course, oversimplify - and grossly, too. But they are far
closer to today's realities than the assumptions on which theory
and practice of management have been basing themselves these
past fifty years.
Here is a first attempt to formulate assumptions that cor-
respond to the management realities of our time.
ASSUMPTION ONE: Every major task of developed society

is being carried out in and through an organized and managed
institution. Business enterprise was only the first of those and.
therefore, became the prototype by historical accident. But
while it has a specific job - the production and distribution of
economic goods and services - it is neither the exception nor
unique. Large-scale organization is the rule rather than the ex-
ception. Our society is one of pluralist organizations rather than
a diffusion of family units. And management. rather than the
isolated peculiarity of one unique exception, the business enter-
prise. is generic and the central social function in our
society.*
A recent amusing bookt points out that management is a
form of government and applies to it Machiavelli's classic
insights. But this is really not a very new idea, far from it. It
underlay a widely read book of 1941 - James Burnham's
Managerial Revolution (though Mr. Burnham applied Marx
rather than Machiavelli to management). It was treated in
considerable detail in three of my books - The Future of
Industrial Man (1942), Concept of the Corporation'4. (1946),
and The New Society (1950). Mr. Justice Brandeis knew this
well before World War I when he coined the term 'Scientific
Management' for Frederick Taylor's investigations into man-
'" On this New Pluralism, see The Age of Discontinuity. especially Part
Three: 'A Society of Organizations'.
t Anthony Jay: Management and Machiavelli (London: Hodder and
Stoughton, 1967).
:t Published in the U.K. as Big Business.
ual work. That a business organization is a form of govern-
ment was also perfectly obvious to the entire tradition of
American institutional economics from John R. Commons
on, that is, from around the tum of the century. And across
the Atlantic, Walter Rathenau saw the same thing clearly well
before 1920.
But what is new is that nonbusiness institutions flock in
increasing numbers to business management to learn from it
how to manage themselves. The hospital, the armed services,
the Catholic diocese, the civil service - all want to go to school
for business management. And where Britain's first postwar
Labour government nationalized the Bank of England to pre-
vent its being run like a business. the next Labour govern-
ment hired in 1968 a leading American firm of management
consultants (McKinsey & Company) to reorganize the Bank
of England to make sure it would be managed as a
business.
This does not mean that business management can be trans-

ferred to other, nonbusiness institutions. On the contrary, the
first thing these institutions have to learn from business manage-
ment is that management begins with the setting of objectives
and that, therefore, noneconomic institutions, such as a univer-
sity or a hospital, will also need very different management from
that of a business. But these institutions are right in seeing in
business management the prototype. What we have done in re-
spect to the management of a business we increasingly will have
to do for the other institutions, including the government
agencies. Business, far from being exceptional, is, in other
words, simply the first of the species and the one we have stud-
ied the most intensively. And management is generic rather
than the exception.
Indeed. what has always appeared as the most exceptional
characteristic of business management, namely, the measure-
ment of results in economic terms, that is, in terms of
profitability, now emerges as the exemplar of what all insti-
tutions need: an objective outside measurement of the allocation
of resources to results and of the rationality of managerial de-
cisions. Noneconomic institutions need a yardstick that does for
them what profitability does for the business - this underlies the
attempt of Robert McNamara, while Secretary of Defence of the
United States, to introduce 'cost-effectiveness' into the govern-
ment and to make planned, purposeful, and continuous
measurement of programmes by their results, as compared to
their promises and expectations, the foundation for budget and
policy decisions. 'Profitability', in other words, rather than being
the 'exception' and distinct from 'human' or 'social' needs,
emerges, in the pluralist society of organizations, as the pro-
totype of the measurement needed by every institution to be
managed and manageable.*
ASSUMPTION TWO: Because our society is rapidly becom-

ing a society of organizations, all institutions, including
business, will have to hold themselves accountable for the 'qual-
ity of life' and will have to make fulfilment of basic social
values. beliefs, and purposes a major objective of their con-
tinuing normal activities rather than a 'social responsibility' that
restrains or that lies outside of their normal main functions.
They will have to learn to make the 'quality of life' into an
opportunity for their own main tasks. In the business enterprise,
this means that the attainment of the 'quality of life' LTlcreas-
ingly will have to be considered a business opportunity and will
have to be converted by management into profitable business.
This will apply i..'1creasingly to fulfilment of the individual.

It is the organization which is today our most visible social
environment. The family is 'private' rather than 'community'
- not that this makes it any less important. The 'community'
is increasingly in the organization, and especially in the one in
which the individual finds his livelihood and through which
he gains access to function, achievement, and social status.
(On this see my The New Society [London, 1950].) It will
increasingly be the job of management to make the indi-
vidual's values and aspirations redound to organizational en-
ergy and performance. It will simply not be good enough to
'" This. of course, also underlies the rapid return to profit and profitability
as yardsticks and determinants of allocation decisions in the developed com-
unist countries, that is, Russia and the European satelites.
M a1U1gement' S New Role 31
be satisfied - as Industrial Relations and even Human Re-
lations traditionally have been - with 'satisfaction', that is,
with the absence of discontent. Perhaps one way to dramatize
this is to say that we will, within another ten years, become far
less concerned with 'management development' as a means of
adapting the individual to the demands of the organization
and far more with 'organization development' to adapt the
organization to the needs, aspirations, and potential of the
individual.
ASSUMPTION THREE: Entrepreneurial innovation will be as

important to management as the managerial function, both in
the developed and il1. the developing countries. Indeed, en~
trepreneurial innovation may be more important in the years to
come. Unlike the nineteenth century, however, entrepreneurial
innovation will increasingly have to be carried out in and by
existing institutions such as existing businesses. It will, there-
fore, no longer be possible to consider it as lying outside of
management or even as peripheral to management. En-
trepreneurial innovation will have to become the very heart and
core of management.
There is every reason to believe* that the closing decades of
the twentieth century will see changes as rapid as those that
characterized the fifty years between 1860 and 1914, when a
new major invention usherLllg in almost immediately a new
major industry with new bjg busLnesses appeared on the scene
every two to three years. But unlike the last century, these
innovations of our century will be as much social innovations
as they will be technical; a metropolis, for instance, is clearly
as much of a challenge to the innovator today as the new
science of electricity was to the inventor of 1870. And unlike
the last century, innovation in this century will be based in-
creasingly on knowledge of any kind rather than on science
alone.
At the same time, iml0vation will increasingly have to be
charmelled in and through existLTlg businesses, if only because
the tax laws in every developed country make the existing
.. For documentation, see The Age of Discontinuity.
business the centre of capital accumulation. And innovation
is capital-intensive, especially in the two crucial phases, the
development phase and the market introduction of new pro-
ducts, processes, or services. We will, therefore, increasingly
have to learn to make existing organizations capable of rapid
and continuing innovation. How far we are still from this is
shown by the fact that management still worries about 'resist-
ance to change'. What existing organizations will have to
learn is to reach out for change as an opportunity and to resist
continuity.
ASSUMPTION FOUR: A primary task of management in the

developed countries in the decades ahead will increasingly be to
make knowledge productive. The manual worker is 'yesterday'
- and all we can fight on that front is a rearguard action. The
basic capital resource, the fundamental investment, but also the
cost centre of a developed economy, is the knowledge worker
who puts to work what he has learned in systematic education,
that is, concepts, ideas, and theories, rather than the man who
puts to work manual skill or muscle.
Taylor put knowledge to work to make the manual worker

productive. But Taylor himself never asked the question.
'What constitutes "productivity" in respect to the industrial
engineer who applies "Scientific Management"?' As a result
of Taylor's work, we can answer what productivity is in re-
spect to the manual worker. But we still cannot answer what
productivity is in respect to the industrial engineer, or to any
other knowledge worker. Surely the measurements which give
us productivity for the manual worker, such as the number of
pieces turned out per hour or per dollar of wage, are quite
irrelevant if applied to the knowledge worker. There are few
things as useless and unproductive as the engineering de-
partment which with great dispatch, industry. and elegance
turns out the drawings for an unsaleable product. Pro-
ductivity in respect to the knowledge worker is, in other
words, primarily quality. We cannot even define it yet.
One thing is clear: to make knowledge productive will
bring about changes in job structure, careers, and organiza~
tions as drastic as those which resulted in the factory from the
application of Scientific Management to manual work. The
entrance job, above all, will have to be changed drastically to
enable the knowledge worker to become productive. For it is
abundantly clear that knowledge cannot be productive unless
the knowledge worker finds out who he himself is, what kind
of work he is fitted for, and how he best works. In other
words, there can be no divorce of 'planning' from 'doing' in
knowledge work. On the contrary, the knowledge worker
must be able to 'plan' himself. And this the present entrance
jobs, by and large, do not make possible. They are based on
the assumption - valid for manual work but quite inap-
propriate to knowledge work - that an outsider can objec-
tively determine the 'one best way' for any kind of work. For
knowledge work, this is simply not true. There may be 'one
best way', but it is heavily conditioned by the individual and
not entirely determined by physical, or even by mental,
characteristics of the job. It is temperamental as well.
ASSUMPTION FIVE: There are management tools and tech-

niques. There are management concepts and principles. There
is a common language of management. And there may even be a
universal 'discipline' of management. Certainly there is a world-
wide generic function which we call management and which
serves the same purpose in any and all developed societies. But
management is also a culture and a system of values and beliefs.
It is also the means through which a given society makes pro-
ductive its own values and beliefs. Indeed, management may
well be considered the bridge between a 'civilization' that is
rapidly becoming worldwide, and a 'culture' which expresses
divergent tradition, values, beliefs, and heritages. Management
must, indeed, become the instrument through which cultural
diversity can be made to serve the common purposes of
mankind. At the same time, management increasingly is not be-
ing practised within the confines of one national culture, law, or
sovereignty but 'multinationally'. Indeed, management in-
creasingly is becoming an institutiOll- so far, the only one - of a
genuine world economy.
Management we now know has to make productive values,
aspirations, and traditions of individuals, community, and
society for a common productive purpose. H management, in
other words, does not succeed in putting to work the specific
cultural heritage of a country and of a people, social and econ-
omic development cannot take place. This is, of course, the
great lesson of Japan - and the fact that Japan succeeded, a
century ago, in putting to work her own traditions of com-
munity and human values for the new ends of a modem indus-
trialized state explains why Japan succeeded while every other
non·Western country has so far failed. Management, in other
words, will have to be considered both a science and a hu·
manity, both a statement of findings that can be objectively
tested and validated and a system of belief and experience.
At the same time, management - and here we speak of
business management alone, so far - is rapidly emerging as
the one and only institution that is common and transcends
the boundaries of the national state. The multinational cor-
poration does not really exist so far. What we have, by and
large, are still businesses that are based on one country with
one culture and, heavily, one nationality, especially in top
management. But it is also becoming clear that this is a tran·
sition phenomenon and that continuing development of the
world economy both requires and leads to genuinely multi-
national companies in which not only production and sales
are multinational, but ownership and management as well -
all the way from the top down.
Within the individual country. especially the developed
country, business is rapidly losing its exceptional status as we
recognize that it is the prototype of the typical, indeed, the
universal, social form, the organized institution requiring
management. Beyond the national boundary, however,
business is rapidly acquiring the same exceptional status it no
longer has within the individual developed country. Beyond
the national boundary, business is rapidly becoming the
unique, the exceptional. the one institution which expresses
the reality of a world economy and of a world wide knowledge
society.
ASSUMPTION SIX: Management creates economic and social
development. Economic and social development is the result
of management.
It can be said without too much oversimplification that

there are no 'underdeveloped countries'. There are only
'undermanaged' ones. Japan a hundred years ago was an
underdeveloped country by every material measurement. But
it very quickly produced management of great competence,
indeed. of excellence. Within twenty-five years Meiji Japan
had become a developed country, and, indeed, in some as-
pects, such as literacy, the most highly developed of all coun-
tries. We realize today that it is Meiji Japan, rather than
eighteenth-century England - or even nineteenth-century Ger-
many - which has to be the model of development for the
underdeveloped world. This means that management is the
prime mover and that development is a consequence.
All our experience in economic deVelopment proves this.
Wherever we have only contributed the economic 'factor of
production' • especially capital, we have not achieved develop-
ment. In the few cases where we have been able to generate
management energies (e.g. in the Cauca Valley in Colombia*)
we have generated rapid development. Development, in other
words, is a matter of human energies rather than of economic
wealth. And the generation and direction of human energies
is the task of management.
* * *
Admittedly, these new assumptions oversimplfy; they are
meant to. But I submit that they are better guides to effective
management in the developed countries today. let alone
tomorrow, than the assumptions on which we have based our
theories as well as our practice these last fifty years. We are not
goi.'1g to abandon the old tasks. We still, obviously, have to
manage the going enterprise and have to create internal order
and organization. We still have to manage the manual worker
and make him productive. And no one who knows the reality of
.. For a description, see my Age of Discontinuity, pp. 119-20.
management is likely to assert that we know everything in these
and similar areas that we need to know; far from it. But the big
jobs waiting for management today, the big tasks requiring both
new theory and new practice, arise out of the new realities and
demand different assumptions and different approaches.
More important even than the new tasks, however, may be man-
agement's new role. Management is fast becoming the central
resource of the developed countries and the basic need of the
developing ones. From being the specific concern of one, the
economic institutions of society, management and managers are
becoming the generic, the distinctive, the constitutive organs of
developed society. What management is and what managers do
will, therefore - and properly - become increasingly a matter of
public concern rather than a matter for the 'experts'. Manage-
ment will increasingly be concerned as much with the ex-
pression of basic beliefs and values as with the accomplishment
of measurable results. It will increasingly stand for the quality
of life of a society as much as for its standard of living.
There are many new tools of management the use of which
we will have to learn, and many new techniques. There are, as
this paper points out, a great many new and difficult tasks. But
the most important change ahead for management is that in-
creasingly the aspirations, the values, indeed. the very survival
of society in the developed countries will come to depend on the
performance, the competence, the earnestness and the values of
their managers. The task of the next generation is to make pro-
ductive for individual, community. and society the new organ-
ized institutions of our New Pluralism. And that is, above all, the
task of management.
3. Work and Tools
MAN, alone of all animals, is capable of purposeful. non-

organic evolution; he makes tools, This observation by Alfred
Russell Wallace, codiscoverer with Darwin of the theory of
evolution, may seem obvious if not trite, But it is a profound
insight, And though made some seventy or eighty years ago, its
implications have yet to be thought through by biologists and
technologists,
One such implication is that from a biologist's (or a his-
torian's) point of view, the technologist's identification of tool
with material artifact is quite arbitrary, Language, too, is a tool.
and so are all abstract concepts, This does not mean that the
technologist's definition should be discarded, All human dis-
ciplines rest after all on similarly arbitrary distinctions, But it
does mean that technologists ought to be conscious of the
artificiality of their definition and carefullest it become a bar-
rier rather than a help to knowledge and understanding,
This is particularly relevant for the history of technology, I
believe, According to the technologist's definition of <tool', the
abacus and the geometer's compass are normally considered
technology, but the multiplication table or table of logarithms is
not Yet this arbitrary division makes all but impossible the
understanding of so important a subject as the development of
the technology of mathematics, Similarly the technologist's elim-
ination of the fine arts from his field of vision blinds the his-
torian of technology to an understanding of the relationship
between scientific knowledge and technology, (See, for instance.
Volumes III and IV of Singer's monumental History of Tech-
First published in Technology and Culture, Winter 1959.
nology.) For scientific thought and knowledge were married to
the fine arts, at least in the West, long before they even got on
speaking terms with the mechanical crafts: in the mathematical
number theories of the designers of the Gothic cathedral, * in the
geometric optics of Renaissance painting. or in the acoustics of
the great Baroque organs. And Lynn T. White, Jr., has shown in
several recent articles that to understand the history and develop-
ment of the mechanical devices of the Middle Ages we must
understand something so nonmechanical and nonmaterial as the
new concept of the dignity and sanctity of labour which St.
Benedict first introduced.
Even within the technologist's definition of technology as
dealing with mechanical artifacts alone, Wallace's insight has
major relevance. The subject matter of technology, according to
the Preface to History of Technology, is 'how things are done or
made'; and most students of technology, to my knowledge,
agree with this. But the Wallace insight leads to a different
definition: the subject matter of technology would be 'how man
does or makes'. As to the meaning and end of technology, the
same source, again presenting the general view, defines them as
'mastery of his (man's) natural environment'. Oh no, the Wal-
lace insight would say (and in rather shocked tones): the purpose
is to overcome man's own natural, i.e. animal,limitations. Tech-
nology enables man, a land-bound biped, without gills, fins, or
wings, to be at home in the water or in the air. It enables an
animal with very poor body insulation, that is, a SUbtropical
animal, to live in all climate zones. It enables one of the weakest
and slowest of the primates to add to his own strength that of
elephant or ox, and to his own speed that of the horse. It enables
• S. B. Hamilton only expresses the prevailing view of technologists when

he says (in Singer's History of Technology, IV, 469) in respect to the archi-
tects of the Gothic cathedral and their patrons that there is 'nothing to sug-
gest that either party was driven or pursued by any theory as to what would
be beautiful'. Yet we have overwhelming and easily accessible evidence to the
contrary; both architect and patron were not just 'driven', they were actually
obsessed by rigorously mathematical theories of structure and beauty. See, for
instance, Sedlmayr, Die Entstehung der Kathedrale (ZUrich, 1950); von Sim-
son, The Gothic Cathedral (London: Routledge and Kegan Paul, 1956); and
especially the direct testimony of one of the greatest of the cathedral de-
signers, Abbot Suger of St.-Denis, in Abbot Suger on the Abbey Church of
St.-Denis and its Art Treasures, ed. Erwin Panofsky (princeton, 1946).
Work and Tools 39
him to push his life span from his 'natural' twenty years or so to
threescore years and ten; it even enables him to forget that natu-
ral death is death from predators, disease, starvation, or acci-
dent, and to call death from natural causes that which has never
been observed in wild animals: death from organic decay in old
age.*
These developments of man have, of course, had impact on
his natural environment - though r suspect that until recent
days the impact has been very slight indeed. But this impact on
nature outside of man is incidentaL What really matters is that
all these developments alter man's biological capacity - and not
through the random genetic mutation of biological evolution but
through tbe purposeful nonorganic development we call tech-
nology.
What I have called here the 'Wallace insight', that is, the
approach from human biology, thus leads to the conclusion that
technology is not about things: tools, processes, and products. It
is about work: the specifically human activity by means of
which man pushes back the limitations of the iron biological law
which condemns aU other animals to devote all their time and
energy to keeping themselves alive for the next day, if not for
the next hour. The same conclusion would be reached, by the
way, from any approach, for instance, from that of the anthro-
pologist's 'culture', that does not mistake technology for a
phenomenon of the physical universe. We might define tech-
nology as human action on physical objects or as a set of physi-
cal objects characterized by serving human purposes. Either
way the realm and subject matter of the study of technology
would be human work.
For the historian of technology this lLne of thought might be

more than a quibble over definj tions. For it leads to the con-
clusion that the study of the development and history of tech-
nOlogy, even in its very narrowest definition as the study of one
particular mechanical artifact (either tool or product) or a par-
of< Set: on tills Sir P. B. Medawar, the British biologist, in 'Old Age and
Natural Death' in his The Uniqueness of the Individual (London: Methuen,

1957).
ticular process, would be productive only within an under-
standing of work and in the context of the history and
development of work.
Not only must the available tools and techniques strongly
influence what work can and will be done, but how it will be
done. Work, its structure, organization, and concepts must in
tum powerfulIy affect tools and techniques and their develop--
ment. The influence, one would deduce, should be so great as to
make it difficult to understand the development of the tool or of
the technique unless its relationship to work was known and
understood. Whatever evidence we have strongly supports this
deduction.
Systematic attempts to study and to improve work only began
some seventy-five years ago with Frederick W. Taylor. Until
then work had always been taken for granted by everyone - as it
is still, apparently, taken for granted by most students of tech-
nology. 'Scientific Management', as Taylor's efforts were called
misleadingly ('scientific work study' would have been a better
term and would have avoided a great deal of confusion), was not
concerned with technology. Indeed, it took tools and techniques
largely as given and tried to enable the individual worker to
manipulate them more economically, more systematically, and
more effectively. And yet this approach resulted almost immedi-
ately in major changes and development in tools, processes, and
products. The assembly line with its conveyors was an import~
ant tool change. An even greater change was the change in
process that underlay the switch from building to assembling a
product. Today we are beginning to see yet another powerful
consequence of Taylor'S work on individual operations: the
change from organizing production around the doing of things
to things to organizing production around the flow of things and
information, the change we call 'automation'.
A similar, direct impact on tools and techniques is likely to
result from another and even more recent approach to the
study and improvement of work: the approach called variously
'human engineering', 'industrial psychology', or 'industrial
physiology'. Scientific Management and its descendants study
work as operation; human engineering and its allied disciplines
are concerned with the relationship between technology and
Work and Tools 41
human anatomy, human perception, human nervous system,
and human emotion. Fatigue studies were the earliest and most
widely known examples; studies of sensory perception and reac-
tion, for instance, of aircraft pilots, are among the presently
most active areas of investigation, as are studies of learning. We
have barely scratched the surface here; yet we know already that
these studies are leading us to major changes in the theory and
design of instruments of measurement and control, and into the
redesign of traditional skills, traditional tools, and traditional
processes.
But of course we worked on work, if only through trial and
error, long before we systematized the job. The best example of
Scientific Management is after all not to be found in our cen-
tury: it is the alphabet. The assembly line as a concept of work
was understood by those unknown geniuses who, at the very
beginning of historical time, replaced the aristocratic artist of
warfare (portrayed in his last moments of glory by Homer) by
the army soldier with his uniform equipment, his few repetitive
operations, and his regimented drill. The best example of hu-
man engineering is still the long handle that changed the sickle
into the scythe, thus belatedly adjusting reaping to the evol-
utionary change that had much earlier changed man from
crouching quadruped into upright biped. Every one of these
developments in work had immediate and powerful impact on
tools, process, and product, that is, on the artifacts of tech-
nology.
The aspect of work that has probably had the greatest impact
on technology is the one we know the least about: the organ-
ization of work.
Work, as far back as we have any record of man, has always
been both individual and social. The most thoroughly col-
lectivist society history knows, that of Inca Peru, did not suc-
ceed in completely collectivizing work; technology - in
particular, the making of tools, pottery. textiles. and cult ob-
jects - remained the work of individuals. It was personally
specialized rather than biologically or socially specialized. as is
work in a beehive or in an ant heap. The most thoroughgoing
individualist society. the perfect market model of classical econ-
omics, presupposed a tremendous amount of collective organ-
42 Technulogy, Management, and Society
ization in respect to law, money and credit, transportation, and
so on. But precisely because individual effort and collective
effort must always be calibrated with one another. the organ-
ization of work is not determined. To a very considerable extent
there are genuine alternatives here, genuine choices. The organ-
ization of work, in other words, is in itself one of the major
means of that purposeful and nonorganic evolution which is
specifically human; it is in itself an important tool of man.
Only within the very last decades have we begun to look at
the organization of work. * But we have already leamed that the
task, the tools, and the social organization of work are not
totally independent but mutually influence and affect one
another. We know, for instance, that the almost preindustrial
technology of the New York women's dress industry is the
result not of technological. economic, or market conditions but
of the social organization of work which is traditional in that
industry. The opposite has been proven, too: when we introduce
certain tools into locomotive shops, for instance, the traditional
organization of work, the organization of the crafts, becomes
untenable; and the very skills that made men productive under
the old technology now become a major obstacle to their being
able to produce at all. A good case can be made for the hypoth-
esis that modem farm implements have made the Russian col-
lective farm socially obsolete as an organization of work, have
made it yesterday's socialist solution of farm organization
rather than today's, let alone tomorrow's.
This interrelationship between organization of work, tasks,
and tools must always have existed. One might even speculate
that the explanation for the mysterious time gap between the
early introduction of the potter's wheel and the so very late
... Among the stlldies ought to be mentioned the work of the late Elton
Mayo, first in Australia and then at Harvard, especially his two slim books:
The Human Problems of an Industrial Civilization (2nd edn., Boston, 1946)
and The Social Problems of an Industrial Civilization (Boston. 1945); the
studies of the French sociologist Georges Friedmann, especially his Industrial
Society (Glencoe: Free Press, 1964); the work carried on at Yale by Charles
R. Walker and his group, especially the book by him and Robert H. Guest:
The Man on the Assembly Line (Cambridge, Mass.: Harvard University
Press, 1952). I understand that studies of the organization of work are also
being carried out at the Polish Academy of Science, but I have not been able
to obtain any of the results.
Work and T oofs 43
introduction of the spinning wheel lies in the social organization
of spinning work as a group task performed, as the Homeric
epics describe it, by the mistress working with her daughters and
maids. The spinning wheel with its demand for individual con-
centration on the machinery and its speed is hardly conducive to
free social intercourse; even on a narrowly economic basis, the
governmental. disciplinary, and educational yields of the spin-
lung bee may well have appeared more valuable than faster and
cleaner yarn.
If we know far too little about work and its organization
scientifically, we know nothing about it historically. It is not
lack of records that explains this, at least not for historic times.
Great writers - Hesiod, Aristophanes, Virgil, for instance -
have leJt detailed descriptions. For the early empires and then
again for the last seven centuries, beginning with the High
Middle Ages, we have an abundance of pictorial material: pot-
tery and relief paintings, woodcuts, etchings, prints. What is
lacking is attention and objective study.
The political historian or the art historian, still dominated by

the prejudices of Hellenism, usually dismisses work as beneath
his notice; the historian of technology is 'thing-focused'. As a
result, we not only still repeat as fact traditions regarding the
organization of work in the past which both our available
sources and our knowledge of the organization of work would
stamp as old wives' tales. We also deny ourselves a fuller under-
standing of the already existing and already collected infor-
mation regarding the history and use of tools.
One example of this is the lack of attention given to materials-
moving and materials-handling equipment. We know that mov-
ing things - rather than fabricating things - is the central effort
in production. But we have paid little attention to the develop-
ment of materials-moving and materials-handling equipment.
The Gothic cathedral is another example. H. G. Thomson in
History of Technology (II, 384) states flatly, for instance, 'there
was no exact medieval equivalent of the specialized architect' in
the Middle Ages; there was only 'a master mason'. But we
have overwhelming evidence to the contrary (summarized, for
instance, in Simson*; the specialized, scientifically trained ar-
chitect actually dominated. He was sharply distinguished from
the master mason by training and social position. Far from
being anonymous, as we still commonly assert, he was a famous
man, sometimes with an international practice ranging from
Scotland to Poland to Sicily. Indeed, he took great pains to
make sure that he would be known and remembered, not only in
written records but above all by having himself portrayed in the
churches he designed ill his full regalia as a scientific geometer
and designer - something even the best-known of today's archi-
tects would hesitate to do. Similarly we still repeat early Ger-
man Romanticism in the belief that the Gothic cathedral was
the work of individual craftsmen. But the structural fabric of
the cathedral was based on strict uniformity of parts. The men
worked to moulds which were collectively held and administered
as the property of the guild. Only roofing, ornaments, doors,
statuary, windows, and so on, were individual artists' work,
Considering both the extreme scarcity of skilled people and the
heavy dependence on local, unskilled labour from the country-
side to which all our sources attest, there must also have been a
sharp division between the skilled men who made parts and the
unskilled who assembled them under the direction of a foreman
or a gang boss. There must thus have been a fairly advanced
materials-handling technology which is, indeed, depicted in our
sources but neglected by the historians of technology with their
uncritical Romanticist bias. And while the moulds to which the
craftsman worked are generally mentioned, no one, to my
knowledge, has yet investigated so remarkable a tool, and one
that so completely contradicts all we otherwise believe we know
about medieval work and technology.
I do not mean to suggest that we drop the historical study of
tools, processes, and products. We quite obviously need to know
much more. I am saying first that the history of work is in itself a
big, rewarding, and challenging area which students of tech-
nology should be particularly well equipped to tackle. I am
saying also that we need work on work if the history of tech-
·0. G. von Simson, The Gothic Cathedral (London: Routledge and Kegan
Paul, 1956).
Work and Tools 45
nology is truly to be history and not just the engineer's anti-
quarianism.
One fmal question must be asked: Without study and

understanding of work, how can we hope to arrive at an under-
standing of technology?
Singer's great History of Technology abandons the attempt to
give a comprehensive treatment of its subject with 1850; at that
time. the editors tell us, technology became so complex as to
defy description, let alone understanding. But it is precisely then
that technology began to be a central force and to have major
impact both on man's culture and on man's natural environ-
ment. To say that we cannot encompass modern technology is
very much like saying that medicine stops when the embryo
issues from the womb. We need a theory that enables us to
organize the variety and complexity of modern tools around
some basic, unifying concept.
To a layman who is neither professional historian nor pro-
fessional technologist, it would. moreover, appear that even the
old technology, the technology before the great explosion of the
last hundred years, makes no real sense and cannot be under-
stood, can hardly even be described, without such basic con-
cepts. Every writer on technology acknowledges the
extraordinary number, variety, and complexity of factors that
playa part in technology and are in turn influenced by it: econ-
omy and legal system, political institutions and social values,
philosophical abstractions, religious beliefs. and scientific
knowledge. No one can know all these, let alone handle them all
in their constantly shifting relationship. Yet all of them are part
of technology in one way or another, at one time or another.
The typical reaction to such a situation has of course always
been to proclaim one of these factors as the determinant - the
economy, for instance, or the religious beliefs. We know that
this can only lead to complete failure to understand. These fac-
tors profoundly influence but do not determine each other; at
most they may set limits to each other or create a range of
opportunities for each other. Nor can we understand technology
in terms of the anthropologist's concept of culture as a stable,
complete, and finite balance of these factors. Such a culture may
exist among small, primitive. decaying tribes, living in isolation.
But this is precisely the reason why they are small, primitive,
and decaying. Any viable culture is characterized by capacity
for internal self-generated change in the energy-level and di-
rection of anyone of these factors and in their inter-
relationships.
Technology, in other words, must be considered as a system,*
that is, a collection of interrelated and intercommunicating units
and activities.
We know that we can study and understand such a system
only if we have a unifying focus where the interaction of all the
forces and factors with-it'1 the system registers some discernible
effect, and where in tum the complexities of the system can be
resolved in one theoretical model. Tools, processes, and pro-
ducts are clearly incapable of providing such focus for the
understanding of the complex system we call technology. It is
just possible, however, that work might provide the focus, might
provide the integration of all these interdependent, yet auton-
omous variables, might provide one unifying concept which will
enable us to understand technology both in itself and in its role,
its impact on and relationships with values and institutions,
knowledge and beliefs, individual and society.
Such understanding would be of vital importance today. The
great, perhaps the central, event of our times is the disap-
pearance of all non-Western societies and cultures under the
inundation of Western technology. Yet we have no way of anal-
ysing this process, of predicting what it will do to man, his
institutions and values, let alone of controlling it, that is, of
specifying with any degree of assurance what needs to be done
to make this momentous change productive or at least bearable.
We desperately need a real understanding, and a real theory. a
real model of technology.
History has never been satisfied to be a mere inventory of
what is dead and gone - that, indeed, is antiquarianism. True
history always aims at helping us understand ourselves, at help-
'" The word is here used as in Kenneth Boulding's 'General Systems Theory
- The Skeleton of Science', Management Science, vol. 2, No.3 (Apri11956), p.
197, and in the publications of the Society for General Systems Research.
Work and Tools 47
ing us make what shall be. Just as we look to the historian of
government for a better understanding of government, and to
the historian of art for a better understanding of art, so we are
entitled to look to the historian of technology for a better under-
standing of technology. But how can he give us such an under-
standing unless he himself has some concept of technology and
not merely a collection of individual tools and artifacts? And
can he develop such a concept unless work rather than things
becomes the focus of his study of technology and of its his-
tory?
4. Technological Trends
in the Twentieth Century
TECHNOLOGICAL activity during the twentieth century has

changed in its structure, methods, and scope. It is this qualitat-
ive change which explains even more than the tremendous rise
in the volume of work the emergence of technology in the
twentieth century as central in war and peace, and its ability
within a few short decades to remake man's way of life all over
the globe.
This over-aU change in the nature of technological work dur-
ing this century has three separate though closely related as..
peets: (1) structural changes - the professionalization,
specialization, and institutionalization of technological work;
(2) changes in methods - the new relationship between tech-
nology and science; the emergence of systematic research; and
the new concept of innovation; and (3) the 'systems approach'.
Each of these is an aspect of the same fundamental trend. Tech-
nology has become what it never was before: an organized and
systematic discipline.
THE STRUCTURE OF TECHNOLOGICAL WORK
Throughout the nineteenth century technological activity. de--

spite tremendous success, was still in its structure almost en-
tirely what it had been through the ages: a craft. It was practised
by individuals here, there. and yonder, usually working alone
First published in vol. 2 of Technology in Western Civilization, ed. Mel-
vin Kranzberg and Carroll W. Pursell, Jr. (New York: Oxford University
Press, 1967).
Technological Trends in the Twentieth Century 49
and without much formal education. By the middle of the
twentieth century technological activity has become thoroughly
professional, based, as a rule, on specific university training. It
has become largely specialized, and is to a very substantial ex-
tent being carried out in a special institution - the research
laboratory, particularly the industrial research laboratory - de-
voted exclusively to technological innovation.
Each of these changes deserves a short discussion. To begin
with, few of the major figures in nineteenth-century tecbnology
received much formal education. The typical inventor was a
mechanic who began his apprenticeship at age fourteen or earl-
ier. The few who had gone to college had not, as a rule, been
trained in technology or science but were liberal arts students,
trained primarily in classics. Eli Whitney (1765-1825) and Sam-
uel Morse (1791-1872), both Yale graduates, are good
examples. There were, of course, exceptions such as the Prus-
sian engineering officer Werner von Siemens (1816-92), who
became one of the early founders of the electrical industry; also
such university-trained pioneers of the modern chemical indus-
try as the Englishman William Perkin (1838-1907) and the An-
glo-German Ludwig Mond (1839-1909). But in general,
technological invention and the development of industries based
on new knowledge were in the hands of craftsmen and artisans
with little scientific education but a great deal of mechanical
genius. These men considered themselves mechanics and inven-
tors, certainly not engineers or chemists, let alone scientists.
The nineteenth century was also the era of technical-univer-
sity building. Of the major technical institutions of higher
learning only one, the Ecole Polytechnique in Paris, antedates
the century; it was founded at the close of the eighteenth cen-
tury. But by 1901, when the California Institute of Technology
in Pasadena admitted its first class, virtually every one of the
major technical colleges active in the Western world today had
already come into being. Still, in the opening decades of the
twentieth century the momentum of technical progress was be-
ing carried by the self-taught mechanic without specific tech-
nical or scientific education. Neither Henry Ford (1863-1947)
nor the Wright brothers (Wilbur, 1867-1912; Orville,
1871-1948) had gone to college.
The technically educated man with the college degree began
to assume leadership about the time of World War I, and by the
time of the Second World War the change was essentially com-
plete. Technological work since 1940 has been done primarily
by men who have been specially educated for such work and
who have earned university degrees. Such degrees have almost
become prerequisites for technological work. Indeed, since
World War II, the men who have built businesses on new tech~
nology have as often as not been university professors of phys-
ics, chemistry, or engineering. as were most of the men who
converted the computer into a saleable product.
Technological work has thus become a profession. The inven-
tor has become an engineer, the craftsman a professional. In
part this is only a reflection of the uplifting of the whole edu-
cationallevel of the Western world during the last 150 years.
The college-trained engineer or chemist in the Western world
today is not more educated, considering the relative standard of
his society, than the craftsman of 1800 (who, in a largely illiter-
ate society, could read and write). It is our entire society - and
not the technologist alone - that has become formally educated
and professionalized. But the professionalization of tech-
nological work points up the growing complexity of technology
and the growth of scientific and technological knowledge. It is
proof of a change in attitude toward technology, an acceptance
by society. government, education, and business that this work is
important, that it requires a thorough grounding in scientific
knowledge, and, above all, that it requires many more capable
people than 'natural genius' could produce.
Technological work has also become increasingly specialized
during the twentieth century. Charles Franklin Kettering
(1876-1958), the inventive genius of General Motors and for
thirty years head of General Motors Research Corporation, rep-
resented the nineteenth-century type of inventor, who special-
ized in invention rather than in electronics, haloid chemistry, or
even the automobile. Kettering in 1911 helped invent the elec-
tric self-starter, which enabled laymen (and especially lay-
women) to drive an automobile. He concluded his long career in
the late thirties by converting the clumsy, wasteful, heavy, and
inflexible diesel engine into the economical, flexible, and rela-
tively lightweight propulsion unit that has become standard in
heavy trucks and railroad locomotives. In between, however, he
also developed a nontoxic freezing compound which made
household refrigeration possible and, with it, the modern appli-
ance industry; and tetraethyl lead, which, by preventing the
'knocking' of internal-combustion engines using high-octane
fuel. made possible the high-performance automobile and air-
craft engine.
This practice of being an inventor characterized the nine-
teenth-century technologist altogether. Edison and Siemens in
the electrical industry saw themselves as 'specialists in inven-
tion', as did the father of organic chemistry, Justus von Liebig
(1803-73) of Germany. Even lesser men showed a range of
interests and achievements that would seem extraordinary, if
not unprofessional, today. George Westinghouse (1846-1914),
for instance, took out important patents on a high-speed vertical
steam engine; on the generation, transformation, and trans-
mission of alternating current; and on the first effective auto-
matic brake for railroad trains. The German-born Emile
Berliner (1851-1929) contributed heavily to early telephone and
phonograph technology and also designed one of the earliest
helicopter models. And there were others.
This kind of inventor has not yet disappeared - there are men
today working as Edison, Siemens, and Liebig worked a century
ago. Edwin H. Land 0909- ), of Polaroid fame, quit college
to develop polarizing glass, and has ranged in his work from
camera design to missiles, and from optics and the theory of
vision to colloidal chemistry. He deliberately describes himself
in Who's Who in America as an 'inventor'. But such men who
cover the spectrum of applied science and technology are not, as
they were in the nineteenth century, the centre of technological
activity. There we find instead the specialist who works in one
increasingly narrow area - electronic circuit design, heat ex-
change, or high-density polymer chemistry, for instance.
This professionalization and specialization have been made
effective by the institutionalization of work in the research lab-
oratory. The research laboratory - and especially the industrial
research laboratory - has become the carrier of technological
advance in the twentieth century. It is increasingly the research
laboratory, rather than the individual, which produces new
technology. More and more, technological work is becoming a
team effort in which the knowledge of a large number of special-
ists in the laboratory is brought to bear on a common problem
and directed towards a joint technological result.
During the nineteenth century the laboratory was simply the
place where work was done that required technical knowledge
beyond that of the ordinary mechanic. In industry, testing and
plant engineering were the main functions of the laboratory;
research was done on the side, if at all. Similarly, the govern-
ment laboratory during the nineteenth century was essentially a
place to test, and all the large government laboratories in the
world today (such as the Bureau of Standards in Washington)
were founded for that purpose. In the nineteenth-century col-
lege or university, the laboratory was used primarily for teach-
ing rather than for research.
Today's research laboratory had its origin in the German
organic-chemical industry. The rapid rise of this industry from
1870 on rested squarely on the application of science to indus-
trial production, unheard of until then. However, even those
German chemical laboratories were at first given mainly to test-
ing and process engineering, and it was not until 1900 that they
were devoted primarily to research. The turning point came
with the synthesis of aspirin - the first purely synthetic drug -
by Adolf von Baeyer (1835-1917) in 1899. The worldwide
success of aspirin within a few years convinced the chemical
industry of the value of technological work dedicated to research
alone.
Even Edison's famous laboratory in Menlo Park, New Jersey
- the most productive research centre in the whole history of
technological discovery and innovation - was not altogether a
modern research laboratory. Although devoted solely to re-
search, as is the modern research laboratory, Menlo Park was
still primarily the workshop of a single inventor rather than the
team effort that characterizes the industrial or university re-
search laboratory of today. Many of Edison's assistants became
successful inventors in their own right, for instance, Frank
J. Sprague (1857-1934), who developed the first practical elec-
tric streetcar. But these men became productive technologists
only after they had left Menlo Park and Edison's employ. While
there, they were just the great man's helpers.
After the turn of the century, new research laboratories sud-
denly appeared on both sides of the Atlantic. The German
chemical industry rapidly built great laboratories that helped to
give Germany a worldwide monopoly on dyestuffs, phar-
maceuticals, and other organic chemicals before World War I.
In Germany, too, shortly after 1900, were founded the big
governmental research laboratories of the Kaiser Wilhelm
Society (now the Max Planck Society), where senior scientists
and scientific teams, free from all teaching obligations, could
engage in research alone. On this side of the Atlantic
C. P. Steinmetz (1865-1923) began, at about the same time, to
build the first modern research laboratory in the electrical indus-
try, the great research centre of the General Electric Company
in Schenectady_ Steinmetz understood. perhaps even better than
the Germans, what he was doing, and the pattern he laid down
for the General Electric Research Laboratory is by and large
that followed by all major industrial and governmental research
centres to this day.
The essence of the modern research laboratory is not its size.
There are some very large laboratories, working for govern-
ments or for large companies, and also numerous small research
laboratories, many employing fewer technologists and scientists
than did some nineteenth-century establishments; and there is
no apparent relationship between the size of the research lab-
oratory and its results. What distinguishes today's research lab-
oratory from any predecessor is, first, its exclusive interest in
research, discovery, and innovation. Second, the research lab-
oratory brings together men from a wide area of disciplines,
each contributing his specialized knowledge. Finally, the re-
search laboratory embodies a new methodology of technological
work squarely based on the systematic application of science to
technology.
It is a great strength of the research laboratory that it can be
both 'specialist' and 'generalist', permitting an individual to
work alone or a team to work together. Quite a few Nobel Prize
winners have done their research work in industrial laboratories
such as those of the Bell Telephone System or the General
Electric Company. Similarly nylon (1937), one of the first build-
ing blocks of today's plastic industry, was developed by
W. H. Carothers (1896-1937) working by himself in the Du-
Pont laboratory during the thirties. The research laboratory
provides an individual with access to skills and facilities which
greatly increase his capacity. It can at the same time, however,
organize a team effort for a specific task and thus create a col-
lective generalist with a greater range of skills and knowledge
than any individual, no matter how gifted, could possibly ac-
quire in one lifetime.
Before World War I the research laboratory was still quite
rare. Between World War I and World War II it became stan-
dard in a number of industries, primarily the chemical, phar-
maceutical, electrical, and electronics industries. Since World
War II, research activity has become as much of a necessity in
industry as a manufacturing plant, and as central in its field as is
the infantry soldier for defence, or the trained nurse in medi-
cine.
THE METHODS OF TECHNOLOGICAL WORK
Hand in hand with changes in the structure of technological

work go changes in the basic approach to and methods of work.
Technology has become science-based. Its method is now 'sys-
tematic research'. And what was formerly 'invention' is 'inno-
vation' today.
Historically the relationship between science and technology
has been a complex one, and it has by no means been thoroughly
explored nor is it truly understood as yet. But it is certain that
the scientist, until the end of the nineteenth century. with rare
exceptions, concerned himself little with the application of his
new scientific knowledge and even less with the technological
work needed to make knowledge applicable. Similarly, the tech-
nologist, until recently, seldom had direct or frequent contact
with the scientist and did not consider his findings of primary
importance to technological work. Science required, of course.
its own technology - a very advanced technology at that, since
an along the progress of science has depended upon the develop-
ment of scientific instruments. But the technological advances
made by the scientific instrument maker were not, as a rule,
extended to other areas and did not lead to new products for the
consumer or to new processes for artisan and industry. The first
instrument maker to become important outside of the scientific
field was James Watt, the inventor of the steam engine.
Not until almost seventy-five years later, that is until 1850 or
so, did scientists themselves become interested in the tech-
nological development and application of their discoveries. The
first scientist to become a major figure in technology was Justus
von Liebig. who in the mid-nineteenth century developed the
first synthetic fertilizer and also a meat extract (still sold all over
Europe under his name) which was, until the coming of re-
frigeration in the 1880s, the only way to store and transport
animal proteins. In 1856 Sir William H. Perkin in England iso-
lated, almost by accident, the first aniline dye and immediately
built a chemical business on his discovery. Since then. tech-
nological work in the organic-chemicals industry has tended to
be science-based.
About 1850 science began to affect another new technology-
electrical engineering. The great physicists who contributed
scientific knowledge of electricity during the century were not
themselves engaged in applying this knowledge to products and
processes; but the major nineteenth-century technologists bf
electricity closely followed the work of the scientists. Siemens
and Edison were thoroughly familiar with the work of physi-
cists such as Michael Faraday (1791-1867) and Joseph Henry
(1797-1878). And Alexander Graham Bell (1847-1922) was led
to his work on the telephone through the researches of Hermann
von Helmholtz (1821-94) on the reproduction of sound. Gug-
lielmo Marconi 0874-1937) developed radio on the foundation
Heinrich Hertz (1857-94) had laid with his experimental
confirmation of Maxwell's electromagnetic-wave propagation
theory; and so on. From its beginnings. therefore, electrical
technology has been closely related to the physical science of
electricity.
Generally. however, the relationship between scientific work
and its technological application, which we today take for
granted. did not begin until after the tum of the twentieth cen-
tury. As previously mentioned, such typically modem devices
c
as the automobile and the aeroplane benefited little from purely
theoretical scientific work in their formative years. It was World
War I that brought about the change: in all belligerent countries
scientists were mobilized for the war effort, and it was then that
industry discovered the tremendous power of science to spark
technological ideas and to indicate technological solutions. It
was at that time also that scientists discovered the challenge of
technological problems.
Today technological work is, for the most part, consciously
based on scientific effort. Indeed, a great many industrial re--
search laboratories do work in 'pure' research, that is, work
concerned exclusively with new theoretical knowledge rather
than with the application of knowledge. And it is a rare lab-
oratory that starts a new technological project without a study
of scientific knowledge, even where it does not seek new knowl-
edge for its own sake. At the same time, the results of scientific
inquiry into the properties of nature - whether in physics, chem-
istry, biology. geology, or another science - are immediately
analysed by thousands of 'applied scientists' and technologists
for their possible application to technology.
Technology is not, then, 'the application of science to pro-
ducts and processes', as is often asserted. At best this is a gross
oversimplification. In some areas - for example, polymer chem-
istry, pharmaceuticals, atomic energy, space exploration, and
computers - the line between 'scientific inquiry' and 'tech-
nology' is a blurred one; the scientist who finds new basic knowl-
edge and the technologist who develops specific processes and
products are one and the same man. In other areas, however,
highly productive efforts are still primarily concerned with
purely technological problems, and have little connection to
science as such. In the design of mechanical equipment - ma-
chine tools, textile machinery, printing presses, and so forth -
scientific discoveries as a rule playa very small part, and scien-
tists are not commonly found in the research laboratory. More
important is the fact that science, even where most relevant,
provides only the starting point for technological efforts. The
greatest amount of work on new products and processes comes
well after the scientific contribution has been made. 'Know-
how', the technologist's contribution, takes a good deal more
time and effort in most cases than the scientist's 'know-what';
but though science is no substitute for today's technology, it is
the basis and starting point.
While we know today that our technology is based on science,
few people (other than the technologists themselves) realize that
technology has become in this century somewhat of a science in
its own right. It has become research - a separate discipline
having its own specific methods.
Nineteenth-century technology was 'invention' - not man-
aged or organized or systematic. It was, as our patent laws. now
two hundred years old, still define it, 'flash of insight'. Of course
hard work, sometimes for decades, was usually required to con-
vert this 'flash' into something that worked and could be used.
But nobody knew how this work should be done, how it might
be organized. or what one could expect from it. The turning
point was probably Edison's work on the electric light bulb in
1879. As his biographer Matthew Josephson points out, Edison
did not intend to do organized research. He was led to it by his
failure to develop through 'flash of genius' a workable electric
light. This forced him, very much against his will, to work
through the specifications of the solution needed, to spell out in
considerable detail the major steps that had to be taken, and
then to test systematically one thousand six hundred different
materials to find one that could be used as the incandescent
element for the light bulb he sought to develop. Indeed, Edison
found that he had to break through on three major technological
fronts at once in order to have domestic electric lighting. He
needed an electrical energy source producing a well-regulated
voltage of essentially constant magnitude; a high vacuum in a
small glass container; and a filament that would glow without
immediately burning up. And the job that Edison expected to
finish by himself in a few weeks required a full year and the
work of a large number of highly trained assistants, that is, a
research team.
There have been many refinements in the research method
since Edison's experiments. Instead of testing one thousand six
hundred different materials, we would today. in all probability,
use conceptual and mathematical analysis to narrow the choices
considerably (this does not always work. however; current can-
cer research, for instance, is testing more than sixty thousand
chemical substances for possible therapeutic action). Perhaps
the greatest improvements have been in the management of the
research team. There was, in 1879. no precedent for such a team
effort, and Edison had to improvise research management as he
went along. Nevertheless, he clearly saw the basic elements of
research discipline: (1) a definition of the need - for Edison, a
reliable and economical system of converting electricity into
light; (2) a clear goal - a transparent container in which resist-
ance to a current would heat up a substance to white heat; (3)
identification of the major steps to be taken and the major
pieces of work that had to be done - in his case, the power
source, the container, and the filament; (4) constant feedback
from the results of the work on the plan; for example, Edison's
finding that he needed a high vacuum rather than an inert gas as
the environment for his filament made him at once change the
direction of research on the container; and finally (5) organ-
ization of the work so that each major segment is assigned to a
specific work team.
These steps together constitute to this day the basic method
and the system of technological work. October 21, 1879, the day
on which Edison first had a light bulb that would burn for more
than a very short time, therefore, is not only the birthday of
electric light; it marks the birth of modern technological re-
search as well. Yet whether Edison himself fully understood
what he had accomplished is not clear, and certainly few people
at the time recognized that he had found a generally applicable
method of technoiogical and scientific inquiry. It took twenty
years before Edison was widely imitated, by German chemists
and bacteriologists in their laboratories and in the General Elec-
tric laboratory in the United States. Since then, however, tech-
nological work has progressively developed as a discipline of
methodical inquiry everywhere in the Western world.
Technological research has not only a different methodology
from invention; it leads to a different approach, known as inno-
vation, or the purposeful and deliberate attempt to bring about,
through technological means, a distinct change in the way man
lives and in his environment - the economy, the society, the
community, and so on. Innovation may begin by defining a need
or an opportunity, which then leads to organizing technological
efforts to find a way to meet the need or exploit the opportunity.
To reach the moon, for instance, requires a great deal of new
technology; once the need has been defIned, technological work
can be organized systematically to produce this new technology.
Or innovation can proceed from new scientific knowledge and
an analysis of the opportunities it might be capable of creating.
Plastic fibres, such as nylon, came into being in the 1930s as a
result of systematic study of the opportunities offered by the
new understanding of polymers (that is, long chains of organic
molecules), which chemical scientists (mostly in Germany) had
gained during World War I.
Innovation is not a product of the twentieth century; both
Siemens and Edison were innova.tors as much as inventors. Both
started out with the opportunity of creating big new industries -
the electric railways (Siemens), and the electric lighting industry
(Edison). Both men analysed what new technology was needed
and went to work creating it. Yet only in this century - and
largely through the research laboratory and its approach to re-
search - has innovation become central to technological effort.
In innovation, technology is used as a means to brLrlg about
change in the economy, in society, in education, in warfare, and
so on. This has tremendously increased the impact of tech-
nology. It has become the battering ram which breaks through
even the stoutest ramparts of tradition and habit. Thus modem
technology influences trarutional society and culture in under-
developed countries. But innovation means also that tech-
nological work is not done only for technological reasons but
for the sake of a nontechnological economic, social, or military
end.
Scientific discovery has always been measured by what it
adds to our understanding of natural phenomena. The test of
invention is, however, technical- what new capacity it gives us
to do a specific task. But the test of innovation is its impact on
the way people live. Very powerful innovations may, therefore,
be brought about with relatively little in the way of new tech-
nological invention.
A very good example is the first major innovation of the
twentieth century, mass production, initiated by Henry Ford
between 1905 and 1910 to produce the Model T automobile. It
is correct, as has often been pointed out, that Ford contributed
no important technological invention. The mass-production
plant, as he designed and built it between 1905 and 1910, con-
tained not a single new element: interchangeable parts had been
known since before Eli Whitney, a century earlier; the conveyor
belt and other means of moving materials had been in use for
thirty years or more, especially in the meat-packing plants of
Chicago. Only a few years before Ford, Otto Doering, in build-
ing the first large mail-order plant in Chicago for Sears, Roe-
buck, used practically every one of the technical devices Ford
was to use at Highland Park, Detroit, to turn out the Model
T. Henry Ford was himself a highly gifted inventor who found
simple and elegant solutions to a host of technical problems-
from developing new alloy steels to improving almost every
machine tool used in the plant. But his contribution was an
innovation: a technical solution to the economic problem of
producing the largest number of finished products with the
greatest reliability of quality at the lowest possible cost. And
this innovation has had greater impact on the way men live than
many of the great technical inventions of the past.
THE SYSTEMS APPROACH
Mass production exemplifies, too, a new dimension that has

been added to technology in this century: the systems approach.
Mass production is not a thing, or a collection of things; it is a
concept - a unified view of the productive process. It requires,
of course, a large number of 'things', such as machines and
tools. But it does not start with them; they follow from the
vision of the system.
The space programme today is another such system, and its
conceptual foundation is genuine innovation. Unlike mass pro-
duction, the space programme requires a tremendous amount of
new invention, as well as new scientific discovery. Yet the fun-
damental scientific concepts underlying it are not at all new -
they are, by and large, Newtonian physics. What is new is the
idea of putting men into space by a systematic, organized ap-
proach.
Automation is a systems concept, closer to Ford's mass pro-
duction than to the space programme. There had been examples
of genuine automation long before anyone coined the term.
Every oil refinery built in the past forty years has been essen-
tially automated. But not until someone saw the entire pro-
ductive process as one continuous, controlled flow of materials
did we see automation. This has led to a tremendous amount of
new technological activity to develop computers, process con-
trols for machines, materials-moving equipment, and so on. Yet
the basic technology to automate a great many industrial pro-
cesses had been present for a long time, and all that was lacking
was the systems approach to convert them to the innovation of
automation.
The systems approach, which sees a host of formerly unre-
lated activities and processes as all parts of a larger, integrated
whole, is not something technological in itself. It is, rather, a way
of Jooking at the world and at ourselves. It owes much to Gestalt
psychology (from the German word for 'configuration' or'struc-
ture'), which demonstrated that we do not see lines and points in
a painting but configurations - that is, a whole - and that we do
not hear individual sounds in a tune but only the tune itself - the
configuration. And the systems approach was also generated by
twentieth-century trends in technology: the linking of tech-
nology and science, the development of the systematic discipline
of research, and innovation. The systems approach is, jn fact, a
measure of our newly found technological capacity. Earlier ages
could visualize systems but they lacked the technological means
to realize such visions.
The systems approach also tremendously increases the power
of technology. It permits today's technologists to speak of ma-
terials rather than of steel, glass, paper, or concrete, each of
which has, of course, its own (very old) technology. Today we see
a generic concept - materials - aU of which are arrangements of
the same fundamental building blocks of matter. Thus it hap-
pens that we are busy designing materials without precedent in
nature: synthetic fibres, plastics, glass that doe,s not break and
glass that conducts electricity, and so on. We increasingly decide
first what end use we want and then choose or fashion the ma-
terial we want to use. We define, for example, the specific prop-
erties we want in a container and then decide whether glass.
steel, aluminium, paper, one of a host of plastics, or anyone of
hundreds of materials in combination will be the best material
for it. This is what is meant by a 'materials revolution' whose
specific manifestations are technological, but whose roots are to
be found in the systems concept.
We are similarly on the threshold of an <energy revolution' -
making new use of such sources of energy as atomic reaction,
solar energy, the tides, and so forth; but also with a new systems
concept: energy. Again this concept is the result of major tech-
nological developments -- especially, of course, in atomic power
- and the starthig point for major new technological work.
Ahead of us, and barely started, is the greatest systems job we
can see now: the systematic exploration and development of the
oceans.
Water covers far rnore of the earth's surface than does land.
And since water, unlike soil, is penetrated by the rays of the sun
for a considerable depth. the life-giving process of photo-
synthesis covers infinitely more area ill the seas than it does on
land - apart from the fact that every single square inch of the
ocean is fertile. And the sea itself, as well as its bottom, contains
untold riches in metals and minerals. Yet, even today, on the
oceans man is still a hunter and a nomad rather than a cul-
tivator. He is in the same early stage of development as our
ancestors almost ten thousand years ago when they first tilled the
soil, Comparatively minor efforts to gain knowledge of the
oceans and to develop technology to cultivate them should
therefore yield returns - not only in knowledge. but in food,
energy, and raw materials also - far greater than anything we
could get from exploiting the already well-explored lands of the
continents. Oceanic development, rather than space ex-
ploration, might well tum out to be the real frontier in the next
century. Underlying this development will be the concept of the
oceans as a system, resulting from such technological develop-
ments as the submarine, and in turn sparking such new tech-
nological efforts as the Mohole project to drill through the
earth's hard crust beneath the ocean.
There are many other areas where the systems approach is
likely to have a profound impact. where it may lead to major
technological efforts, and through them, to major changes in the
way we live and in our capacity to do things. One such example
is the modern city - itself largely a creation of modern tech-
nology.
One of the greatest nineteenth-century inventions was inven-
tion itself, as has bf'"en said many times. It underlay the
explosive technological development of the years between 1860
and 1900, 'the heroic age of i.nvention'.It might similarly be said
that the great invention of the early twentieth century was inno-
vation: it underlies the deliberate attempt to organize pur-
poseful changes of whole areas of life which characterizes the
systems approach.
Innovation and the systems approach are only just emerging.
Their full impact is almost certainly still ahead. But they are
already changi..'1g man's life, society, a.lJ.d his world view. And
they are profoundly changing technology itself and its role.
5. Technology and
Society in the
Twentieth Century
THE PRETECHNOLOGICAL CIVILIZATION OF 1900
MODERN man everywhere takes technological civilization

for granted. Even primitive people in the jungles of Borneo or in
the High Andes, who may themselves still live in the Early
Bronze Age and in mud huts as they have for thousands of
years, need no explanation when the movie they are watching
shows the flipping of a light switch, the lifting of a telephone
receiver. the starting of an automobile or plane. or the launching
of another sateHite. In mid-twentieth century the human race
has come to feel that modern technology holds the promise of
conquering poverty on the earth and of conquering outer space
beyond. We have learned. too, that it carries the threat of
snuffing out all humanity in one huge catastrophe. Technology
stands today at the very centre of human perception and human
experience.
On the other hand. at the beginning of the twentieth century
modern technology barely existed for the great majority of
people. In terms of geography, the Industrial Revolution and its
tec1mologicaI fruits were largely confined, in 1900, to the small
minority of mankind that is of European descent and lives
around the North Atlantic shores. Only Japan. of the non-
First published in vol. 2 of Technology in Western Civilization, ed. Mel-
vin Krallzberg and Carroll W. Pursell, Jr. (New York: Oxford University
Press, 1967).
Technology and Society in the Twentieth Century 65
European, non-Western countries, had then begun to build up a
modem industry and modem technology, and in 1900 modem
Japan was still in its infancy. In Indian village, Chinese town,
and Persian bazaar, life was still preindustrial, still untouched
by the steam engine and telegraph, and by all other new tools of
the West. It was, indeed. almost an axiom - for Westerner and
non-Westerner alike - that modern technology was, for better or
worse, the birthright of the white man and restricted to him.
This assumption underlay the imperialism of the period before
World War I, and it was shared by such eminent non-West-
erners as Rabindranath Tagore 0861-1941), the Nobel Prize-
winning Indian poet, and Mahatma Gandhi (1869-1948), who,
just before World War I, began his long fight for Indian inde-
pendence. There was, indeed. enough apparent factual support
for this belief to survive. if only as a prejudice, until World War
II. Hitler, for instance, made the Japanese 'honorary Aryans'
and considered them 'Europeans in disguise' primarily because
they had mastered modem technology. And in the United States
the myth lingered on Lll the widespread belief. before Pearl Har-
bor, that the Japanese, not being of European stock, were not
proficient in handling such weapons of modern technology as
planes or battleships.
Yet, in the West, indeed even in the most highly developed
countries - England, the United States, and Germany - modern
technology played in 1900 only a minor role in the lives of most
people, the majority of whom were then still farmers or artisans
living either in the countryside or in small towns. The tools they
used and the life they led were preindustrial. and they remained
unaware of the modern technology that was so rapidly growing
up all around them. Only in a few large cities had modern tech-
nology imposed itself upon daily life - in the street railways,
increasingly powered by electricity after 1890, and in the daily
paper, dependent upon the telegraph and printed on steam-
driven presses. Only there had modern technology crossed the
threshold of the home with electric lights and the telephone.
Even so, to Western man in 1900, modern technology had
become tremendously exciting. It was the time of the great inter-
national exhibitions in everyone of which a new 'miracle' of
techlTICal invention stole the show. These were also the years in
which technological fiction became a best seller from
Moscow to San Francisco. About 1880, books by the French-
man Jules Verne (1828-1905), such as Journey to the Centre of
the Earth and Twenty Thousand Leagues under the Sea, be·
came wildly popular. By 1900 the English novelist H. G. Wells
0866--1946), whose works included the technological romance
The Time Machine (1893), had become more popular still. And
there was virtually unbounded faith in the benevolence of tech-
nological progress. AU tbis excitement was, bowever. focused on
things. That these things could and would have an impact on
society and on the way people behaved and thought had not
occurred to many.
The advances in technology in this century are, indeed, awe-
inspiring. Nevertheless, it can be argued that the foundations for
most of them had been wen laid by 1900, and certainly by 1910.
The electric light, the telephone, the moving picture, the phono-
graph, and the automobile had all been invented by 1900 and
were, indeed, being sold aggressively by prosperous and grow-
ing companies. And the aeroplane, the vacuum tube, and radio
telegraphy were invented in the opening years of the new cen-
tury.
The changes technology has wrought in society and culture
since then could, however, not have been seen by the men of
1900, The geographical explosion of technology has created the
flrst worldwide civilization; and it is a technological civilization.
It has already shifted the centre of the world away from Western
Europe thousands of miles to both West and East. More import-
ant still, modern technology in this century has made men re·
consider old concepts, such as the position of women in society,
and it has remade basic institutions - work, education, and war-
fare, for example. It has shifted a large number of people in the
technologically advanced countries from working with their
hands to working, almost without djrect contact with materials
and tools, with their minds. It has changed the physical environ-
ment of man from one of nature to the man-made big city. It has
further changed man's horizon. While it converts the entire
world into one rather tight community sharing knowledge, in-
formation, hopes, and fears, technology has brought outer space
into man's immediate, conscious experience. It has converted an
apocalyptic promise and an apocalyptic threat into concrete
possibilities here and now: offering both the utopia of a world
without poverty and the threat of the final destruction of hu-
manity.
Finally, in the past sixty years man's view of technology itself
has changed. We no longer see it as concerned with things only;
today it is a concern of man as well. As a result of this new
perspective we have come to realize that technology is not, as
our grandparents believed, the magic wand that can make all
human problems and limitations disappear. We now know that
technological potential is, indeed, even greater than they
thought. But we have also learned that technology, as a creature
of man, is as problematical, as ambivalent, and as capable of
good or evil, as is its creator.
This paper will attempt to point out some of the most import-
ant changes which modern technology has brought about in
society and culture, and some changes in our own view of and
approach to technology thus far, in the twentieth century.
TECHNOLOGY REMAKES SOCIAL INSTITUTIONS
Twentieth-century history, up to the 1960s, can be divided into

three major periods: the period before the outbreak of the First
World War in 1914 - a period culturally and politically much
like the nineteenth century; the First World War and the twenty
years from 1918 to the outbreak of World War II in 1939; and
from World War II until today. In each of these periods modern
technology has shaped basic institutions of Western society.
And in the most recent period it has started to undermine and
remake, also, many of the basic institutions of non-Western
society.
Emancipation of Women
In the years before World War I technology, in large measure,
brought about the emancipation of women and gave them a new
position in society. No nineteenth-century feminist, such as
Susan B. Anthony, had as strong an impact on the social pos-
ition of women as did the typewriter and telephone. If the 'Help
Wanted' advertisement of 1880 said 'typist' or 'telegrapher',
everybody knew that a man was wanted. whereas the ad of 1910
for a typist or telephone operator was clearly offering a
woman's job. The typewriter and the telephone enabled the girl
from a decent family to leave home and make a respectable
living on her own, not dependent on a husband or father. The
need for women to operate typewriters and switchboards forced
even the most reluctant European governments to provide pub-
lic secondary education for girls, the biggest single step towards
granting women equality. The flood of respectable and well-
educated young women in offices then made heavy demands for
changes in the old laws that withheld from women the right to
enter into contracts or to control their own earnings and prop-
erty, and finally forced men by 1920 to give women the vote
almost everywhere in the Western world.
Changes in the Organization of Work

Technology soon began to bring about an even greater trans-
formation about the time of World War 1. It started to make
over the manual work that had always provided a livelihood for
the great majority of people - as it still does in technologically
underdeveloped countries. The starting point was the appli-
cation of modem technological principles to manual work.
which went under the name of Scientific Management and was
largely developed by an American, Frederick Winslow Taylor
0856-1915).
While Henry Ford made the systems innovation of mass pro-
duction, Taylor applied to manual operations the principles that
machine designers during the nineteenth century had learned to
apply to the work of a tool; he identified the work to be done;
broke it down into its individual operations; designed the right
way to do each operation; and finally he put the operations
together, this time in the sequence in which they could be done
fastest and most economically. All this strikes us today as com-
monplace, but it was the first time that work had been looked at;
throughout history it had always been taken for granted.
The immediate result of Scientific Management was a revol-
utionary cut in the cost of manufactured goods - often to one-
tenth, sometimes to one-twentieth of what they had been before.
What had been rare luxuries inaccessible to all but the rich, such
as automobiles or household appliances, rapidly became avail-
able to the broad masses. More important, perhaps, is the fact
that Scientific Management made possible sharp increases in
wages while at the same time lowering the total cost of the
product. Hitherto lower costs of a finished product had always
meant lower wages to the worker producing it. Scientific Man-
agement preached the contrary: that lower costs should mean
higher wages and higher income for the worker. To bring this
about was indeed Taylor's main intent and that of his disciples,
who, unlike many earlier technologists, were motivated as much
by social as by technical considerations. 'Productivity' at once
became something the technologist could raise, if not create.
And with it, the standard of living of a whole economy might be
raised, something totally impossible - indeed, almost unim-
aginable - at any earlier time.
At the same time, Scientific Management rapidly changed the
structure and composition of the work force. It first led to
wholesale upgrading of the labour force. The unskilled
'labourer' working at a subsistence wage, who constituted the
largest single group in the nineteenth-century labour force,
became obsolete. In his place appeared a new group, the ma-
chine operators - the men on the automobile assembly line, for
instance. They themselves were no more skilled, perhaps, than
the labourers, but the technologist's knowledge had been injec-
ted into their work through Scientific Management so that they
could be paid - and were soon being paid - the wages of highly
skilled workers. Between 1910 and 1940 the machine operators
became the largest single occupational group in every industrial
country, pushing both farmers and labourers out of first place.
The consequences for mass consumption, labour relations, and
politics were profound and are still with us.
Taylor's work rested on the assumption that knowledge,
rather than manual skill, was the fundamental productive re-
source. Taylor himself preached that productivity required that
'doing' be divorced from 'planning', that is, that it be based on
systematic technological knowledge. His work resulted in a
tremendous expansion of the number of educated people
needed in the work force and, ultimately, in a complete shift in
the focus of work from labour to knowledge.
What is today called automation is conceptually a logical
extension of Taylor's Scientific Management. Once operations
have been analysed as if they were machine operations and
organized as such (and Scientific Management did this suc-
cessfully), they should be capable of being performed by
machines rather than by hand. Taylor's work immediately
increased the demand for educated people in the work force,
and eventually, after World War n, it began to produce a work
force in advanced countries like the United States in which edu-
cated people applying their knowledge to the job are the actual
'workers'. and outnumber the manual workers, whether labour-
ers, machine operators, or craftsmen.
The substitution of knowledge for manual effort as the pro-
ductive resource in work is the greatest change in the history of
work, which is, of course, a process as old as man himself. This
change is still in progress, but in the industrially advanced coun-
tries, especially in the United States, it has already completely
changed society. In 1900 eighteen out of every twenty Am-
ericans earned their living by working with their hands, ten of
the eighteen as farmers. By 1965, only five out of twenty of a
vastly increased American labour force did manual work, and
only one worked on the fann. The rest earned their living pri-
marily with knowledge, concepts, or ideas - altogether, with
things learned in school rather than at the workbench. Not all of
this knowledge is, of course, advanced; the cashier in the cafe-
teria is also a 'knowledge worker', though of very limited extent.
But all of it is work that requires education, that is, systematic
mental training rather than skill in the sense of exposure to
experience.
The Role of Education

As a result, the role of education in twentieth-century industrial
society has changed - another of the very big changes produced
by technology. By 1900 technology had advanced so far that
literacy had become a social need in the industrial countries. A
hundred years earlier literacy was essentially a luxury as far as
society was concerned; only a handful of people - ministers,
lawyers, doctors, government oftlcials, and merchants - needed
to be able to read and write. Even for a high-ranking general,
such as Wellington's partner at Waterloo, the Prussian Field
Marshal Bluecher, illiteracy was neither a handicap nor a dis-
grace. In the factory or the business office of 1900, however, one
had to be able to read and write, if only at an elementary school
level. By 1965 those without a substantial degree of higher edu-
cation, more advanced than anything that had been available
even to the most educated two hundred years ago, were actually
becoming unemployable. Education has moved, from having
been an ornament, if not a luxury, to becoming the central econ-
omic resource of technological society. Education is therefore
rapidly becoming a centre of spending and investment in the
industrially developed society.
This stress on education is creating a changed society; access
to education is best given to everyone, if only because society
needs all the educated people it can get. The educated man
resents class and income barriers which prevent the full exercise
of this knowledge, and because society requires and values the
services of the expert it must allow him full recognition and
rewards for his talents. In a completely technological civi-
lization, education replaces money and rank as the index of
status and opportunities.
Change in Warfare
By the end of World War n technology bad completely changed
the nature of warfare, and altered the character of war as an
institution. When Karl von Clausewitz (1780-1831), the father
of modern strategic thought, called war 'a continuation of policy
by other means' he only expressed in an epigram what every
politician and every military leader had known all along. War
was always a gamble. War was cruel and destructive. War, the
great religious leaders always preached, is sin. But war was also
a normal institution of human society and a rational tool of
policy. Many of the contemporaries, including Clausewitz him-
self, considered Napoleon wicked, but none thought him insane
for using war to impose his political will on Europe.
The dropping of the first atomic bomb on Hiroshima in 1945
changed all this. Since then it has become increasingly clear that
major war no longer can be considered normal, let alone
rational. Total war has ceased to be a usable institution of hu-
man society because in full-scale, modem technological war-
fare, there is no defeat, just as there is no victory. There is only
total destruction. There are no neutrals and no noncombatants.
A Worldwide Technological Civilization
World War II brought modem technology in its most advan-
ced forms directly to the most remote comers of the earth. All
armies required modem technology to provide the sinews of
war and the instruments of warfare. And all used non-Western
people either as soldiers in technological war or as workers on
modem machinery to provide war material. This made every-
one in the world aware of the awesome power of modem tech-
nology.
This, however, might not have had a revolutionary impact
upon older, non-Western, nontechnological societies but for the
promise of Scientific Management to make possible systematic
economic development. The new-found power to create produc-
tivity through the systematic effort we now call industrialization
has raised what President John F. Kennedyca1led 'the rising tide
of human expectations', the hope that technology can banish the
age-old curse of disease and early death, of grinding poverty,
and ceaseless toil. And whatever else this may require, it de-
mands acceptance by society of a thoroughly technological
civilization.
The shift of focus in the struggle between social ideologies
shows this clearly. Before World War II free enterprise and
communism were generally measured throughout the world by
their respective claims to have superior ability to create a free
and just society. Since World War II the question has largely
been: which system is better at speeding economic development
to a modem technological civilization? India offers another
illustration. Until his death in 1948. Mahatma Gandhi opposed
industrialization and sought a return to a preindustrial tech-
nology, symbolized in the hand spinning wheel. His close com-
rade and disciple lawaharlal Nehru (1889-1964) was forced,
however, by public opinion to embrace 'economic develop-
ment' , that is, forced-draft industrialization emphasizing the
most modem technology, as soon as he became the first prime
minister of independent India in 1947.
Even in the West, where it grew out of the indigenous culture,
technology has in the twentieth century raised fundamental
problems for society and has challenged - if not overthrown -
deeply rooted social and political institutions. Wherever tech-
nology moves it has an impact on the position of women in
society; on work and the worker; on education and social mobil-
ity; and on warfare. Since this is the case, in the non-Western
societies modem technology demands a radical break with
social and cultural tradition; and it produces a fundamental
crisis in society. How the non-Western world will meet this crisis
will, in large measure, determine what man's history will be in
the latter twentieth century - even, perhaps, whether there will
be any more human history. But unless the outcome is the disap-
pearance of man from this planet, our civilization will remain
irrevocably a common technological civilization.
MAN MOVES INTO A MAN-MADE ENVIRONMENT
By 1965 the number living on the land and making their living
off it had dwindled in the U.S. to one out of every twenty. Man
had become a city-dweller. At the same time, man in the city
increasingly works with his mind, removed from materials.
Man in the twentieth century has thus moved from an environ-
ment that \-vas essentially still nature to an environment, the
large city and knowledge work, that is increasingly man-made.
The agent of this change has, of course, been technology.
Technology, as has been said before, underlies the shift from
manual to mental work. It underlies the tremendous increase in
the productivity of agriculture which, in technologically de-
veloped countries like the United States or those of Western
Europe, has made one farmer capable of producing, on less
land, about fifteen times as much as his ancestor did in 1800 and
almost ten times as much as his ancestors in 1900. It therefore
enabled man to tear himself away from his roots in the land to
become a city-dweller.
74 'Technology, Management, and Society
Indeed. urbanization has come to be considered the index of
economic and social development. In the United States and in
the most highly industrialized countries of Western Europe up
to three-quarters of the population now live in large cities and
their suburbs. A country like the Soviet Union, that still re-
quires half its people to work on the land to be adequately fed,
is, no matter how well developed industrially, an ·under-
developed country'.
The big city is, however, not only the centre of modem tech-
nology; it is also one of its creations, The srJ.ft from animal to
mechanical power. and especially to electrical energy (which
needs no pasture lands), made possible the concentration of
large productive facilities in one area. Modern materials and
construction methods make it possible to house, move, and sup-
ply a large population in a small area. Perhaps the most import-
ant prerequisite of the large modern city, however, is modern
communications, the nerve centre of the city and the major
reason for its existence. The change in the type of work a tech-
nological society requires is another reason for the rapid growth
of the giant metropolis. A modern society requires that an al-
most infinite number of specialists in diverse fields of knowledge
be easy to find. easily accessible, and quickly and economically
available for new and changing work. Businesses or government
offices move to the city, where they can find the lawyers, ac-
countants, advertising men, artists, engineers, doctors, scien-
tists, and other trained persomlel they need. Such knowledgeable
people, in turn, move to the big city to have easy access to their
potential employers and clients.
Only sixty years ago, men depended on nature and were pri·
marily threatened by natural catastrophes, storms, floods, or
earthquakes. Men today depend on technology, and our major
threats are technological breakdowns. The largest cities in the
world would become uninhabitable in forty-eight hours were the
water supply or the sewage systems to give out. Men, now city-
dwellers, have become increasingly dependent upon technology.
and our habitat is no longer a natural ecology of wind and
weather, soil and forest, but a man-made ecology. Nature is no
longer an immediate experience; New York City children go to
the Bronx Zoo to see a cow. And whereas sixty years ago a rare
treat for most Americans was a trip to the nearest market town,
today most people in the technologically advanced countries
attempt to 'get back to nature' for a vacation.
MODERN TECHNOLOGY AND THE HUMAN HORIZON
Old wisdom - old long before the Greeks - held that a com-
munity was limited to the area through which news could easily
travel from sunrise to sunset. This gave a 'community' a dia-
meter or some fifty miles or so. Though each empire - Persian,
Roman, Chinese, and Inca - tried hard to extend this distance by
building elaborate roads and organizing special speedy courier
services, the limits on man's horizon until the late nineteenth
century remained unchanged and confined to how far one man
could travel by foot or on horseback in one day.
By 1900 there were already significant changes. The railroad
had extended the limit of one day's travel to seven hundred
miles or more - the distance from New York to Chicago or from
Paris to Berlin. And, for the first time, news and information
were made independent of the human carrier through the
telegraph. which carried them everywhere practically in-
stantaneously. It is no accident that a very popular book of
teclmological fiction to this day is Jules Verne's Around the
World in Eighty Days. For the victory of technology over dis-
tance is, perhaps, the most significant of all the gifts modem
technology has brought man.
Today the whole earth has become a local community if
measured by the old yardstick of one day's travel. The com-
mercial jet plane can reach, in less than twenty-four hours, prac-
tically any airport on earth. And unlike any earlier age, the
cornmon man can and does move around and is no longer
rooted to the small valley of his birth. The motor vehicle has
given almost everyone the power of mobility, and with physical
ability to move around comes a new mental outlook and a new
social mobility. 'The technological revolution on the American
farm began in earnest when the farmer acquired wheels; he
immediately became mobile, too, in his mental habits and ac-
cessible to new ideas and techniques. The beginning of the
Negro drive for civil rights in the American South came with the
used car. Behind the wheel of a Model T a Negro was as power-
ful as any white man, and his equal. Similarly, the Indian
worker on the Peruvian sugar plantation who has learned to
drive a truck will never again be fully subservient to the white
manager. He has tasted the new power of mobility, a greater
power than the mightiest kings of yesterday could imagine. It
is no accident that young people everywhere dream of a car of
their own; four-wheeled mobility is a true symbol of freedom
from the restraints of traditional authority.
News, data, information, and pictures have become even
more mobile than people. They travel in 'real time', that is, they
arrive at virtually the same time as they happen. They have,
moreover, become universally accessible. The radio brings to
anyone in possession of a cheap and simple receiving set news in
his own language from any of the world's major capitals. Tele-
vision and movies present the world everywhere as immediate
experience. And beyond the earth itself the horizon of man has,
within the last two decades, extended out into stellar space. It is
not just a bigger world, therefore, into which twentieth-century
technology has moved the human being; it is a different world.
TECHNOLOGY AND MAN
In this different world, technology itself is seen differently; we

are aware of it as a major element in our lives, indeed, in human
life throughout history. We are becoming aware that the major
questions regarding technology are not technical but human
questions, and are coming to understand that a knowledge of the
history and evolution of technology is essential to an underN
standing of human history. Furthermore, we are rapidly learn-
ing that we must understand the history, the development, and
the dynamics of technology in order to master our con-
temporary technological civilization, and that, unless we do so,
we will have to submit to technology as our master.
The naive optimism of 1900, which expected technology
somehow to create paradise on earth, would be shared by few
people today. Most would also ask: What does technology do to
man as well as for him? For it is only too obvious that tech-
nology brings problems, disturbances, and dangers as well as
benefits. First, economic development based on technology car-
ries the promise of abolishing want over large parts of the earth.
But there is also the danger of total war leading to total de-
struction; and the only way we now know to control
this danger is by maintaining in peacetime a higher level of
armaments in all major industrial countries than any nation has
ever maintained. This hardly seems a fitting answer to the prob-
lem, let alone a permanent one. Also, modem public-health
technology - insecticides above all - has everywhere greatly
increased man's life span. But since birth rates in the under-
developed countries remain at their former high level while the
death rates have declined, the world's poor nations are threat-
ened by a population explosion which not only eats up all the
fruits of economic development but threatens world famine and
new pestilence. In government, modem technology and the
modem economy founded on it have outmoded the national
state as a viable unit. Even Great Britain, with fifty million
inhabitants, has been proven in recent decades to have too small
a productive base and market for independent economic sur-
vival and success. Nationalism is still the most potent political
force, as developments in the new nations of Asia and Africa
clearly show; yet the revolution in transportation and com-
munication has made national borders an anachronism, re-
spected by neither aircraft nor electronic waves.
The metropolis has become the habitat of modem man. Yet
paradoxically we do not know how to make it habitable. We
have no effective political institutions to govern it. Urban decay
and traffic jams, overcrowding and urban crime, juvenile de-
linquency and loneliness are endemic in all modem great cities.
No one looking at any of the world's big cities would maintain
that they offer an aesthetically satisfying environment. The div-
orce from direct contact with nature in work with soil and ma-
terials has permitted us to live much better; yet technological
change itself seems to have speeded up so much as to deprive us
of the psychological and cultural bearings we need.
The critics of technology and dissenters from technological
optimism in 1900 were lonely voices. Disenchantment with tech-
nology did not set in until after World War I and the coming of
the Great Depression. The new note was first fully struck in the
novel Brave New World by the English writer Aldous Huxley
0894-1963), published in 1932, at the very bottom of the De-
pression. In this book Huxley portrayed the society of the near
future as one in which technology had become the master, and
man, its abject slave. was kept in bodily comfort without knowl~
edge of want or pain but also without freedom, beauty, or ere
ativity, indeed, without a personal existence. Five years later the
most popular actor of the period, the great Charlie Chaplin
(1889- ), drove home the same idea in his movie Modern
Times, which depicted the cornman man as the hapless and
helpless victim of a dehumanized technology. These two artists
have set the tone: only by renouncing modern civilization al~
together can man survive as man. This theme has since been
struck with increasing frequency, and certainly with L'1Creasing
loudness. The pessimists of today, however, suffer from a bad
case of romantic delusion; the 'happier society of the pre~
industrial past' they invoked never existed. In the late thirteenth
century. Genghis Khan and his Mongols, whose raids covered
an area from China to central Europe, killed as many people -.
and a much larger proportion of a much smaller population - as
two twentieth-century world wars and Hitler put together, yet
their technology was the bow and arrow.
However much justice there may be in Huxley's and Charlie
Chaplin's thesis, it is sterile. The repudiation of technology they
advocate is clearly not the answer. The only positive alternative
to destruction by technology is to make technology work as our
servant. In the final analysis this surely means mastery by man
over himself, for if anyone is to blame, it is not the tool but the
human maker and user. 'It is a poor carpenter who blames his
tools,' says an old proverb. It was naive of the nineteenth-cen~
tury optimist to expect paradise from tools and it is equally
naive of the twentieth-century pessimists to make the new tools
the scapegoat for such old shortcomings as man's blindness,
cruelty, immaturity, greed, and sinful pride.
It is also true that better tools demand a better, more highly
skilled, and more careful carpenter. As its ultimate impact on
man and his society, twentieth-century technology, by its very
mastery of nature, may thus have brought man face to face
again with his oldest and greatest challenge: himself.
6. The Once and
Future Manager
T HE professional manager has not one job, but three. The first
is to make economic resources economically productive. The
manager has an entrepreneurial job, a job of moving resources
from yesterday into tomorrow: a job, not of minimizing risk, but
of maximizing opportunity. Every manager spends a very large
part of his time with problems that are essentially economic, at
least in their results. For instance, where are the markets'! How
can we achieve a little more productivity from these resources?
What are the right things to do, and the right things to stop
doing? So everybody who is a manager, no matter whether he is
a general manager or a specialist, wrestles for part of his day
with an economic dimension.
Then there is a managerial or 'administrative' job of making
human resources productive, of making people work together.
bringing to a common task their individual skills and knowl-
edge; a job of making strengths productive and weaknesses ir-
relevant, which is the purpose of organization. Organization is a
machine for maximizing human strengths. If you have a man
very good at making things. and no good at marketing and
finance, who is in business for himself, you know that he is not
going to last very long. If you have an organization, even a small
one, you can use a good manufacturing man because you can
use his strengths, and his weaknesses are not relevant. You have
other people who are good at marketing, or at finance. so that
These notes from talks given at lectures and seminars in England were first
published in Management Today, May 1969.
you can build a team in which the strengths of individuals
count.
Then there is a third function. Whether they like it or not,
managers are not private, in the sense that what they do does not
matter. They are public. They are visible. They represent. They
stand for something in the community. In fact, they are the only
leading group in society - not just the business manager, but all
the executives of organizations in this developed, highly organ-
ized, highly institutionalized society. Managers have a public
function. They may discharge it by a great deal of work outside
the business within the community, from Royal Commissions
down to the local Boy Scout troop. Or they may discharge it
purely within their own business by leadership and example.
But they always do discharge it. Nothing anybody who is a man-
ager does is private, in the sense that one can say: 'This is my
own affair. It does not concern anybody else. What I do is, there-
fore, of no real interest to anybody.' Managers are on the stage,
with the spotlight on them.
So the executive job, as it is today, not as it will be tomorrow,
is threefold; a job in which we need objectives, and we need
tools; a job in which we need character, and we need com-
petence; a job in which we have to decide, 'this we are willing to
do, and, therefore, we need to learn how to do it well,' or 'this we
are not going to do, we will let someone else do it, it is beyond
our ken, beyond our competence.' These are the demarcations
of the job.
The Conglomerates will be the Stranded Giants of the

Next Decade
Whether anyone man, or any team of men, can manage a great
complexity of different businesses, as in the conglomerates, is a
doubtful matter. I came into the world of business a long time
ago. My first job in the City of London was to liquidate the
stranded giants of the 1920s. I was a pretty good international
grave robber. I do not want to go out liquidating the stranded
giants of the 1960s. I am afraid, however, that the con-
glomerates will be the stranded giants of the next decade.
Putting it very bluntly. I do not believe that one can manage a
The Once and Future Manager 81
business by reports. I am a figures man, and a quantifier, and
one of those people to whom figures talk. I also know that
reports are abstractions, and that they can only tell us what we
have determined to ask. They are high-level abstractions. That
is all right if we have the understanding, the meaning, and the
perception. One must spend a great deal of time outside, where
the results are. Inside a business one only has costs. One looks at
markets, at customers, at society, and at knowledge, all of which
are outside the business, to see what is really happening. That
reports will never tell you.
At the really critical moment, when a business is in trouble-
and I have never seen a business that is not in trouble sooner or
later - there is a very high premium on understanding a
business, and not just on calculating. So, the conglomerates
make me very uneasy, because they put far too much tmst in
reports. Reports are very comforting to me; they tell me a great
deal. But they have also misled me often enough to make me
realize that, unless I go out and gain understanding, I may be
acting on yesterday, even though the information is up to
date.
The belief that one can manage, and invest in, many
businesses is based on the assumption that, if things go wrong,
one can always sell out and walk away, and let somebody else
worry. But I think that to manage - which means being respon-
sible for performance and direction - one has to have a certain
core of understanding. If one has a shipping line, and a bank,
and an insurance company, and a chocolate company, and a
petrochemical company, and a textbook business - I am simply
listing the businesses of one company I know - when it comes to
the critical moment, one cannot really understand. I do not
understand that many businesses. It is hard enough to under-
stand one. I do not understand that many markets, or that many
temperaments. The people in a publishing house are very
different from the people in a department store - and should be.
Being a buyer of ladies' underwear is very different from being a
buyer of novels, both in temperament and in knowledge. I have,
therefore, very grave doubts about the conglomerates.
At the same time, in this modern world of ours, yesterday's
demarcations, yesterday's industry classifications, yesterday's
technology lines, no longer apply. They are becoming fuzzy;
they interact; they cut across. People who buy packaging do not
buy tin cans, and they do not buy paper, or glass; they buy just
packaging. They do not care what the material is. On the other
hand, if you have a glass company. the only thing which comes
out of the kilns is glass; no matter how hard you try, you are not
going to produce paper from them. Here is a very real problem,
which makes yesterday's industry structures increasingly inap-
propriate.
The conglomerate builders in America also have an under-
standing which the old-line managers do not have. They are the
first people to understand the new capital market. This has been
arriving for the past thirty or forty years. It is a market because
a large middle class suddenly arose which had enough surplus
money. In my youth, it was an axiom in the City that 99 per cent
of the people would never have enough surplus to do more than
buy life insurance and pay back their mortgages. which are
necessities. The capital market was less than 1 per cent of the
population. Today the capital market in the United Kingdom
is probably 25 per cent of the population. In America. it is
closer to 40 per cent. Even on fue Continent, it is going up
to 10 per cent or 15 per cent. That is a real market, with
choices.
The conglomerate people are the first to understand what that
market wants and needs, and they package for that market.
However. we have allieamed that the first response to a new
situation is the wrong response - the right question, but the
wrong answer. So I think that the conglomerates are giving the
wrong answer, and that we are all going to pay dearly for it, at
least in the United States.
I see a need to find a way in which you can adapt yourself to
the growing complexity of technology and market, while at the
same time maintaining a core of unity that can lie either in the
market, or in technology, Here are two examples of the right
kinds of conglomerate. Sears, Roebuck is probably the largest
retailer in the world. It is willing to buy anything which the
American family needs, whether it be fabric, underwear, life
insurance. or garden furniture. As long as the family buys it, it is
Sears, Roebuck's business, because Sears, Roebuck under-
stands what the family is as an economic unit, and is the expert
buyer for the family. The role of the merchant is never to be a
seller; it is always to be a buyer for the customer. That is a
conglomerate. But, however many different items it carries, it is
a unified business.
At the other extreme, Corning Glass is willing to go into any
market, as long as it is based on glass technology. It is in the
customer market, it is the largest producer of television tubes -
any market, as long as it is glass - because they understand their
technology. These two extremes both are manageable and make
sense. But I am afraid that my friend who is trying to balance
the economic risks of a shipping line by having a perfume
company is going to be in trouble. In fact. he already is.
Never Look at Any One Measure Alone in Any Business: Look

at Multiple Measures
I will never accept anything as 'the' right measure of efficiency.
Perhaps this is an admission of defeat. I have given up even
looking for the right measure. I want multiple measures. When
in comes to capital appropriations, I want to see return on capi-
tal, and pay-out, and discounted cash flow - all three. Today.
this is one of the things I demand of the computer. Ten years
ago. this meant that 25,000 clerks with 25,000 pens would have
to work 25,000 years to get it. I look at the three and ask what
they really tell me. If the Home Office pathologist cuts a hair
lengthwise and crosswise and on the bias. he looks at all three of
them under the microscope, so that he will see the one that tells
him something about the murder.
I would never start out with earnings per share. because lever-
age is a very dangerous thing. First, it works both ways. as some
of us with older memories will remember, and second, the
underlying assumption that a business can be unprofitable or
unproductive but my investment in it can be productive, is a
very short-range assumption. It is all right if you can sell out
after six weeks but not if you are stuck with it. I look at return
on total assets as one of the key figures, as I look at return per
dollar employed, in other words. the productivity of capital. the
value added. But I also look at earnings per share, because after
I understand the economics of a business, I then ask how I
fmance it.
I speak like an old banker, which is exactly what I am, but
you would be surprised how backward the art of finance is and
how few industrialists realize how one structures finance. Many
businesses use equity capital to finance the production of com-
modities, which is madness. Commodities are something that
the banker will loan money on. Few people realize that once you
understand the total economics, then you form the financial
structure, using the various money streams, which change all the
time. Very often you see busitlesses where the econo M
mics are sound but the financing is wrong, so that the earnings
per share are way too low: where one can refinance a business,
restructure it, give a business the capacity to attract capital.
Sometimes you see the opposite, where everybody in the market
is rushing in and buying shares in a business wildly because the
earnings per share seem to be going up; and actually it is a low-
profit business, very cunningly camouflaged, through financial
manipulation. This can last usually for a maximum of eighteen
months. Then the stock market suddenly discovers that some-
thing is wrong; but, for eighteen months, a lot of people can be
fooled. I would never look at one measure alone, on anything in
business. First, these measurements are not good enough; sec-
ond, we do not understand enough for any single measurement
to be 'the' ultimate measurement.
The First Yardstick by Which Management is Judged is, Do

They Keep Us Busy?
In every organization you know, there are many people who are
being promoted up to the point where they no longer perform.
Up to that point, they did well, so they were promoted. When
they no longer perform, they are not promoted, but they stay
there, we all know this. If it is inevitable - and it is inevitable -
that we are promoting many people on the basis of per-
formance, up to the point where we promote them beyond their
capacity, perhaps this is something which we ought to tackle,
instead of just being reconciled to it. The best managers I know
spend a good deal of time upon something on which the rest of
us spend no time, namely, on thinking through their organ-
izational dilemmas.
Take, for example, the man who started out when the
company was small. He was a very good bookkeeper. The
company grew, and geological forces raised him to the point
where he was now financial V.P. of a very large business - and
he is still a bookkeeper. Everybody knows some of these
examples, not only in the financial area but in every area. He has
been with the company twenty-eight years. He is approaching
fifty-five, and he has come in every morning at nine, and has
been the last man to leave. Nobody has ever criticized him, and
now, suddenly, he is beyond his competence, out of his depth,
and a danger to the organization.
\\-'hat do we do now? Most of us say, 'We cannot do anything,
so let us try to build around him.' The really good managers
whom I know do not accept that. They say, 'Yes, we owe loyalty
where loyalty has been given. We should have taken corrective
action long ago, but it is too late now. We should not have let him
go up to that position, but it is too late. But we Calmot allow him
to remain there, because he is doing a great deal of damage.' The
damage is caused, not because he is not a good financial officer
and you need one, but because he tells your organization, 'This is
what management really expects.' He makes cynics out of the
young people, and this is one of the sins for which there is no
forgiveness.
You cannot fire tbis man, not because the organization would
take a dim view of it, but because most of us are reasonably
decent human beings. On the other hand, if you leave him there,
you corrupt. So what do you do? Sometimes, one cannot do
anything, but say, 'All right, we shall have to sweat out the next
ten years until he retires.' But more often than not, if you really
do spend time, you do find a solution that is dignified and con-
siderate. These few cases - they are never very many - are the
test of management. It is by this that your organization, your
professional, administrative, and management people, right
down to the shop fioor, really measure you.
An organization measures its management by two yardsticks.
The first is 'Do they keep us busy? Do they know how to keep us
working?' Because if you do not, then you obviously do not take
your organization or your own job seriously. The one thing
people demand of management is competence. The organ~
ization where people are allowed to sit around and mark time
has contempt for its management The other yardstick is 'Do
they treat the exceptional cases with imagination, intelligence.
and compassion?' 'These are your test cases. Everybody has this
proven level of incompetence in their management group. If the
man has been with you only five years, you fire him; that is easy.
But if he had been with you thirty years, can you move him out
where he at least will not do damage? What can you do that is
dignified and considerate, and yet tens everybody down the line,
'They had his number, and acted on it' '?
In the largest organization I know, there are not more than a
dozen cases every two or three years. So this is not a large prob-
lem in numbers, but it is a big problem in impact. There is no one
solution. These cases have to be handled strictly individually.
They are the human problems that keep good managers awake
at night. By your compassion, but also by your realism, in solv-
ing them, your organization will judge you. This is leadership
in a business.
The Facts and the Myth oj Job Mobility in America Are Not
Necessarily the Same
We have plenty of companies in America that advertise for a
chemical engineer under forty, with at least forty years' experi-
ence; that is very common. The facts, and the myth, of Am-
erica.."'1 job mobility are not necessarily quite the same. When
you actually analyse one of our large companies, there is a very
large amount of turnover and mobility in the management and
professional ranks during the first five or seven years. There is a
considerable amount at the top, and none in between - none.
There we have almost lifetime employment, like the Japan-
ese.
If you actually break it dO'l}ffi into market segments, you will
find that the young people hop around a great deal. In many
cases they have no choice. A great many companies have
magnificent personnel policies on paper. and that is all they
have. Take a young man who starts out in design engineering.
After three years he discovers that this is not what he really
wants to do or is good at. His company is advertising for sales
engineers, but he has no way of applying, if only because his
boss would take a very dim view of any intimation that he
might wish to move. So he quits, and the company has only itself
to blame.
My students are men of thirty to thirty-three, with six, seven,
or ten years' experience, and they come to me and tell me such
things. I look at them and say, 'Whom do you work forT They
say, 'The ABC Company.' I say to them, 'Across the street from
where you work is the employment agency your company uses.
You quit, go there, and the next day you will have the job you
have been trying to be transferred to for eighteen months.' It
works every time.
That is not the only reason why the young people are mobile.
To be mobile is one way of finding out where you belong. This is
not to say that some of them do not overdo it. Then they settle
down, they marry, and children come along. The forces that
keep them static increase their pull. When they reach top man-
agement they may start moving around again.
We have another, smaller problem in another area: the good,
technical, functional man of forty-four or forty-five, who has
now been Director of Market Research for fifteen years. By now
he knows all about the toy market that he is ever going to know,
and he is bored. He knows perfectly well that he is never going
to be vice-president (marketing); he may want to move, and he
should move. Where he is, he is becoming a barnacle, and slow-
ing down the ship to a considerable extent. These are usually
timid people, with much at stake in pensions and so forth. There
we should have more mobility, in that middle group of purely
functional people, who will not rise to general management, and
do not wish to do so. They are bored with what they have been
doing for too long. They have lost enthusiasm. They have lost
any willingness to learn. They know only the right way, the
wrong way, and the company way.
D
Small Business Has Done Much Better Than Any Other in the
Last Twenty Years
I have heard for some forty years that the small business is in
trouble, and I used to believe it. After twenty years, I said.
'Where is the evidence?' I have not seen any. In fact, the small
business has done much better than any other in the last twenty
years, in every place, including Britain. More small businesses
have been started and more small businesses have been prosper-
ous. What is 'small' may have changed. But the distribution of
businesses has changed amazingly little in the last fifty years, in
any major country. The merger move on today is not really
threatening the small business.
Most small businesses believe they need management less;
they need management more. A large business can hire a lot of
specialists; a small business cannot and, therefore, has to be
better at what it is doing. Second, they need objectives much
more than do large businesses. They need a realization of
what they are really trying to do. They need much more con-
centration, as they have fewer energies. And they have a
different but very serious problem of management succession.
precisely because they are usually family companies and be-
cause they cannot offer a great deal to the professional non·
family man, unless they make him an owner, which is not easy
with our tax laws. So they have to insist much more rigorously
on performance in top jobs. The secret of a family company is a
very simple one; as long as you demand that the family members
at the top work twice as hard as anybody else, you are all right;
but the moment you allow the playboy in management, you are
gone, because then the people you employ will not work for you
any more, if they are any good. In a family company, sub-
ordinates will be perfectly willing to work for a not terribly
bright family member, as long as he works.
The real problem in small businesses is not that of being a
small business, it is that of the business that outgrows small size;
that is where you have your mortality; those are the businesses
that are being bought up - the business that has outgrown what
the original founder can manage, that by any objective analysis
should grow, but bumps against an invisible ceiling all the time.
There you have a problem of how to make it possible for a man
to change his basic habits, because he strangles the business.
Some of them, bluntly, do not want the business to grow.
I have seen businesses where the founding management sud-
denly realizes that it has three or four or five hundred employees
and six markets and now has to build itself a management team,
get some information, and think. through its own role. The foun-
der realizes that he will have to stop playing at every position
and will have to build and encourage and lead players. That is a
real crisis of small businesses. It is very difficult for them to
grow lnto medium-sized ones because this is not a matter of
quantity, but a matter of basic change in habit, in behaviour,
and in values.
The Main Impact of the Computer Has Been to Create

Unlimited Jobs for Clerks
The computer came on the scene in the late 1940s and, despite
all the talk about how fast things go today, we have not yet got
an information industry. What we need is not going to be a
physical object. It is going to be what is called software - the
concepts, the ideas, the logic. There also has to be a lot of
peripheral and transmitting and receiving and sending equip-
ment that will make the computer a tool one can use, which it is
not today. So far the main impact of the computer has been the
creation of unlimited employment opportunities for clerks. This
is not great progress. But we are coming very close to the point
where we will have an information industry. The pieces are
probably all there: the communications satellite and the tele-
vision screen and the duplicating machine and the fast printer.
What we lack primarily are large concepts which will enable
people to use the machine. It will not really become usable as
long as we make the asinine attempt to have the computer speak
English, which it cannot do. In music, the difference between
East and West is the fact that many centuries ago St. Ambrose
invented notation. Up to that time music was described in
words, as it still is in the East, which means you cannot have
ensemble music, you cannot have keys, and you have to mem-
orize. But we all expect seven-year-olds to learn notation in two
weeks, and most of them can do it.
We are beginning to learn notation which will essentially en-
able anybody to use the computer without that unspeakable
clumsy, slow, and expensive 'programming' or translation job.
The proper notation, which will enable us to use an electronic
medium electronically, rather than trying to use bastard
language that it cannot handle and we cannot handle, is perhaps
ten years away.
The future manager will find the computer as much a fact of
life as children today find the telephone. This is a new form of
energy; information is energy for the mind. What should the
manager try to do with it? The first question is, Does it free you?
Does it enable you to spend less and less time controlling and
more and more time doing the important things? If the result of
the computer is that you pore over more records, you are abus-
ing it or you are being abused by it. Then you have less control,
incidentally: control is not an abundance of facts, but knowing
what facts to have and what they mean.
If it enables you to spend no time controlling operations,
because you have thought through what you expect - and, if
what you expect does not happen, you know immediately, but,
so long as it does happen, you do not have to worry very much -
then you are using the computer properly. The first test is, How
many hours outside the office does the computer give you? In
the office, you are cost-centred and not result-centred. The com-
puter is a tool of liberation if used correctly. Otherwise, you
become its servant. It should liberate you from being chained to
operations and to your desk and enable you to have time for
people and for the outside, where the results are.
The second test is, Are you using it to enable the people in
your organization to do what they are ostensibly being paid for?
Or are you using it to make it even easier for them to do every-
thing except what they are being paid for? There used to be very
little choice, but there is no reason for this any more - if you
instruct your systems and computer people properly, instead of
having them tell you what they should focus on, which is in-
variably the payroll. Nobody had any difficulty in getting out the
payroll before the computer; so use it for the payroll, but do not
believe that it is very much of an advance to do the unnecessary
three times as fast.
The area in which management in most businesses is today
most impeded in getting performance by information and data
processing is the field sales force. Sales managers are now so
snowed under with all kinds of paper that they do not know who
the customers are, they do not train the sales force. They have
never been out. Good salesmen are very poor paper handlers:
there is almost an inverse relationship between the ability of a
salesman to sell and his handwriting legibility. In that room
where you have half a dozen or a dozen girls processing the
orders that come in from the field, invariably they are all slaving
and sweating over the orders from the good salesman: if only
because the others do not send in orders. Good salesmen are not
paper pushers, and vice versa.
Therefore, this is the area that needs to be looked at. The only
resource of a salesman is time. If you find, as you will find, that
70 per cent or 80 per cent of your salesmen's time is occupied by
sending in information that then has to be gone over again, that
is one in which to put the computer to work. The computer
people will say that this is not really technically demanding.
They are wrong, and you must say, 'Never mind, my boy. If you
want to do technically demanding jobs, go back to the univer-
sity. You are on my payroll.' Maybe you can say it a little more
nicely. I long ago learned not to be nice, because people do not
hear it when you hint.
Ask 'What are the areas where handling data has become an
end in itself and has been allowed to overgrow the job?' That is
where the data processing people had better go to work. Then
ask 'What are the repetitive crises that really sidetrack the
whole organization again and again?' Is it the annual inventory
battle, of which I take a dim view? Or other repetitive crises that
really should not happen - things that we have not really
thought through, that we have not anticipated? At least now we
can build early warning into the system.
So these are the instructions I give to my computer people. I
say, 'By now, children, you have learned how to do payroll; you
may even have learned how to do credit; you may even have
learned how to follow an order through the plant so that one can
coordinate plant scheduling with shipping and customer prom-
ises.' (Although that is something everybody says he has done, I
have yet to see anybody who really has.) 'Fine. You have learned
how to do large-scale clerical work. Now I want you to start
working on information.'
The Job Which Most Managers Were Brought Up to Spend

Most Time on Will Disappear
The literature of management has been concerned, over the last
fifty years, with the management part of the job, because it was
the new thing. This is not going to become less important, but it
is going to become relatively less urgent. The job which most
managers have been brought up to spend most of their time on
will disappear. They will no longer spend most of their time
scratching for a little dubious information about what happened
yesterday. Accept the fact that, the day after tomorrow, they
will be able to get it. Our great-great-grandfathers, who started
industries, spent most of their time trying to get a little power.
We now turn a switch. Nobody worries a great deal about where
to get power from. Tomorrow we will no longer have to worry
about where we get the other form of energy: the input of the
mind, the information input. That will be easy, too.
Now, however, we have to learn a great deal about the en-
trepreneurial part of the job, to which we have really paid very
little attention during these last fifty or sixty years. It is going to
be different and quite demanding for two reasons. First, I think
it is likely that the last third of the century will be as innovative
an era as was the corresponding period of the nineteenth cen-
tury. We are already getting industries that are based on the
knowledge of this century and are quite different; and there is
going to be need for a lot of innovation, not just technological,
but social and economic as well. At the same time, the pattern of
the late nineteenth century, in which you had the individual
inventor, who then somehow teamed up with the money man, is
likely to be repeated.
A great deal of the innovating activity will have to be carried
on in existing businesses, where it has not been done so far. By
and large, the old folklore which says that existing businesses
are incapable of doing the really new things has so far been
proved. Even though they all spend a lot of money on research
and development. there is not very much to show for it, except
some very beautiful buildings in parklike surroundings.
We have to learn to do the job, simply because the economic
realities force us to do so. Not only is every single taxation
system, in every single developed country, forcing the capital to
stay in existing businesses; but also the human resources are
there, and it is of the essence of the new industries that the
development stage is where you really need men and money. It
is not true that inventions become marketable products faster
these days. They become marketable products much less fast. In
the nineteenth century, within a few months of invention of the
electric light bulb and the telephone. on the other side of the
Atlantic, you had commercial installation of both in London.
This speed we do not have today. This would take ten years of
development work today; and the development phase has be-
come far more expensive, and you need far more knowledge for
it. Our complexities are greater and this, too, means that ex-
isting businesses will very largely have to do the work.
This puts a very great premium on learning systematically to
innovate, as part of the management job in the existing business.
This is something where all of us really start out on pretty much
the same level of nonperformance, so that everybody has a
chance of doing it. The technology gap is a thing of the past,
simply because, when it comes to the new industries, there are
no advantages on one side or the other: it depends on who is
going to do the better job of learning how one does this par-
ticular kind of work, which is very largely marketing, very
largely development. But it also depends on the ability to have
two different kinds of organization under the same corporate
form, the managerial and the entrepreneurial, which are not
organized in the same way. They require that, in our minds, we
keep them not separate but, at least, distinct.
If you also want to know in which way your industry is going,
what are tomorrow's products and tomorrow's needs, do not
look to your home market. It is very unreliable whether it is as
big as the United States or as small as Luxembourg. Look to the
international market: it is almost totally reliable. It is not true
that the United States sets the fashions: this is a fashionable
newspaper myth. The world market has been setting the
fashions. The real market research today is world market re-
search; we have to learn to see a world market, h"'1stead of just
national economies.
The idea of the sovereign state as the one central institution
- the idea of Hobbes, Locke, and Rousseau - no longer cor-
responds to reality; all the large, organized, managed, special-
purpose institutions of society are autonomous. They can be
conducted. they can be led, they can be controlled, to a certain
extent; but they cannot be made undone. They are necessities.
They are the only way of getting the job done. You can national-
ize them, but that does not mean that you control them. On the
contrary we have all learned that the one way not to have con-
trol is to nationalize something. It is one of the few well-docu-
mented experiences of our generation.
Although business is not really that good, and knows it,
business is still way ahead of the other institutions, largely be-
cause it has been working on the problems longer. So we are
coming to be looked upon as a model. Management is a central
function, not in business, but in our society, on the performance
of which the very existence of the society depends. Therefore,
managers, and business managers in particular, suddenly have a
dimension added: of exemplar, of leadership. These, then, are
the new challenges, the new jobs. How do we make organ-
izations capable of innovating? How do we make knowledge
productive? How do we make our business and our industries
capable of operating in a very complicated and very dangerous
world economy? And what do we really have to do, so that we
embody this leadership function, this representative function,
this spotlight role of being the most visible, the most articulate,
and the most advanced example of this new species, the people
who make organization productive for society and individual
alike'!
Is the Traditional Organization Structure Going to Work

Tomorrow as It lIas till Now?
There is sufficient reason to wonder whether the traditional Of-
ganization structure, with which we are all familiar, is going to
work tomorrow the way it has worked for the past forty years.
Everybody is familiar with the pyramid. We took our organ-
ization structure from the military, and so it is a rank-focused
structure. 'When you look at the high-technology and high-
knowledge businesses, this structure does not work. You do
need the authority of decisions. There has to be somebody who
fmany can say 'yes' or 'no', after which the matter rests and
debate ceases. You do need an orderly process for on-going
work. But ideas do not observe these channels, or they die.
What we see emerging are, essentially, very complex struc-
tures, the analogy to which is not mechanical, as it has been in
the traditional organization, but biological. There is no bio-
logical organization that has only one axis. Biological organ-
izations have at least two, and usually three. Muscles, nerves,
the circulatory system - these are all organizing principles. They
coexist in very complex relationships. Probably the kindest way
to describe what we are doing is to say that we are 'fooling
around' with systems which maintain an ordered structure, and
yet enable a great deal of positioning according to the logic of
the job, on the one hand, and the logic of knowledge on the
other.
The high-technology companies are simply showing the way.
Their problem is very acute. You may have a physicist, next to a
cell biologist, next to a communications engineer, and you can-
not say that one is more important than the others. In one task,
one man is more important; in the next task, another is. So you
need to be able to have spontaneous teams, with a high degree of
purpose and order and self-discipline, within a framework of
orderly decision making and procedure. Though there are
examples where this actually works, they are not yet sufficient to
enable us to distil the principle. But we can say that it can be
done, and is going to be done. As we move from an organization
where there were a few people at the top who had all the de-
cision-making power and aU the knowledge, while the rest were
at their machines, to an organization where the bulk of the
people are paid for knowledge input and, above all, for inno-
vation input, we are going to see more of this development.
Free-form organizations. or whatever fancy word you want to
use for them, need exceedingly clear objectives - much clearer
objectives than the hierarchical, pyramidal organization needs,
where the fellow at the top can change his mind and you get, at
least on paper, fairly rapid changes all the way down. (You do
not, in reality.) Free-form organizations also need a willingness
to commit themselves to objectives and to rather demanding
performance goals. Otherwise, they degenerate into a debating
society.
Second, they require that the people in the group take respon-
sibility for their contribution; they require that the people at the
top say, 'Look, we are going to leave you alone as much as we
can, but one can only delegate what one understands; one can-
110t delegate what one does not understand. Therefore, if you
want autonomy - and we want you to have autonomy - it is your
job to think through and tell us what contribution we should
hold you accountable for, what are your priorities. Maybe we
are going to look at them and say they seem very fine but they
make no sense to us, or we are going to look at something and
say it is very fine, but we are still responsible for this company
and this is not what we are trying to do. But it is your respon-
sibility to take the initiative and to think it through and to focus
yourself on the results of the total organization. Maybe you will
say that what you really want to work on will not have results
until the year 1992. Fine. There are certain things that have that
long a lead-time; there is nothing we can do about it; but at least
let them be part of our objective and of our goals.' Unless you
enforce self-discipline, a good time is had by all - but that is
all.
Managers Have to Accept That Industrial Relations Will

Become Increasingly Bitter
While the headlines are going to be focused for a long time on the
Industrial Relations aspect of the management of people, this is
yesterday's rear-guard action and, like all rear-guard actions, it
cannot be won. The purpose of a rear-guard action is to enable
the main force to get away. Increasingly, the real job will be the
mobilization of knowledge and of the knowledge worker. The
cost of the people who are being paid to put knowledge to work
is very high: not only because they are paid well, but also be-
cause they are not usually people who can be used with great
versatility. Knowledge is always specialized, always specific.
These are also people who either perform very well or do not
perform at all. Mediocre knowledge work, as a rule, is not
worth having.
But so far most of us still act as if we believe that we can
substitute three mediocre clerks for one first-rate knowledge
worker. Not only do three mediocre clerks not produce as much
as one knowledge worker; three mediocre people produce
nothing at all- they only get in each other's way. We are grossly
overstaffed and grossly undermanned in most places. Knowl-
edge, in the last analysis, is the only resource of the developed
countries. When it comes to willing backs, the underdeveloped
countries are way ahead. One cannot compete with the pro-
ductivity of labour in underdeveloped countries, if they learn a
little management.
While we will have to worry about Industrial Relations,
therefore, this is, increasingly, going to be a purely negative, a
purely defensive area, in which all one can do is hope that one
does not lose ground. The opportunity lies in making knowledge
productive and thereby making the labour force of yesterday
essentially irrelevant and immaterial. This, however, also im-
plies that industrial relations are going to become increasingly
bitter. Accept the fact - accept that the industrial worker in the
developed world knows that he is dispensable, and his union
leader knows it very well. That makes him increasingly bitter
and increasingly resistant. The industrial worker, the main
beneficiary of the last seventy years of industrial development,
suddenly sees his status and his function in the industrial society
threatened. We converted the casual labourer of yesterday, who
had neither income nor job security, into the machine operator
of today, who has both. And those he is going to keep, but not
the status and function, the power that he has had: when a
Labour government starts talking about trade-union legislation,
something has happened that is fundamental.
The problem will not be solved by the old, traditional remedy
of worker membership on the board. Wherever we have tried
this, it has corrupted a few unionists, and that is all it has done. It
has not had an impact on the rank and file, and it has not im-
peded management. It is more a symbolical than a real thing.
I would say, 'Do not involve workers in management process.
What are the decisions they should take responsibility for that
managers are doing and that are only remotely connected with
the things for which managers are responsible?'
Almost thirty years ago, when I helped run a liberal arts
college, we called in the students and told them that there was a
war on, that we were shorthanded and that they were going to
have to run certain things: which was practically everything
except the teaching and the hiring of faculty and the deter-
mination of the curriculum, which we did. But they ran every-
thing else, including the feeding. They made a botch of it the
first year - no worse, let me say, than the faculty committee had
done. But in the second year they did a good job; there was no
problem, and the leaders emerged. They tried a few crazy things
and some of them worked, and some of them did not; but they
did a fairly responsible job or they went hungry and, after they
had gone without meals twice in a row, the feeding arrangements
worked. You would be surprised how salutary it was for them to
find out that, if you do not plan meals, you do not get any.
How many of the things managers do are only incidental to
their job, including a lot of what is plant discipline - shift as-
signments and so on - that could be left to employees them-
selves? No doubt, a lot of management people are working on
these matters. All right then, have some redundancies.
7. The First Technological
Revolution and
Its Lessons
Aw ARE that we are living in the midst of a technological rev-

olution, we are becoming increasingly concerned with its mean-
ing for the individual and its impact on freedom, on society, and
on our political institutions. Side by side with messianic prom-
ises of utopia to be ushered in by technology, there are the most
dire warnings of man's enslavement by technology, his alien-
ation from himself and from society, and the destruction of all
human and political values.
Tremendous though today's technological explosion is, it is
hardly greater than the first great revolution technology
wrought in human life seven thousand years ago when the first
great civilization of man, the irrigation civilization. established
itself. First in Mesopotamia, and then in Egypt and in the Indus
Valley, and finally in China, there appeared a new society and a
new polity: the irrigation city, which then rapidly became the
irrigation empire. No other change in man's way of life and in
his making a living, not even the changes under way today, so
completely revolutionized human society and community. In
fact, the irrigation civilizations were the beginning of history. if
only because they brought writing.
The age of the irrigation civilization was pre-eminently an age
of technological innovation. Not until a historical yesterday, the
eighteenth century, did technological innovations emerge which
Presidential address to the Society for the History of Technology, 29 De-
cember 1965; first published in Technology and Culture, Spring 1966.
were comparable in their scope and impact to those early
changes in technology, tools, and processes. Indeed, the tech-
nology of man remained essentially unchanged until the eight-
eenth century insofar as its impact on human life and human
society is concerned.
But the irrigation civilizations were not only one of the great
ages of tEchnology. They represent also mankind's greatest and
most productive age of social and political innovation. The his-
torian of ideas is prone to go back to ancient Greece, to the Old
Testament prophets, or to the China of the early dynasties for
the sources of the beliefs that still move men to action. But our
fundamental social and political institutions antedate political
philosophy by several thousand years. They all were conceived
and established in the early dawn of the irrigation civilizations.
Anyone interested in social and governmental institutions and
in social and political processes will increasingly have to go
back to those early irrigation cities. And, thanks to the work of
archaeologists and linguists during the last fifty years, we in-
creasingly have the information, we increasingly know what the
irrigation civilizations looked like, we increasingly can go back
to them for our understanding both of antiquity and of modern
society. For essentially our present-day social and political insti-
tutions, practically without exception, were then created and
established. Here are a few examples.
(1) The irrigation city first established government as a dis-
tinct and permanent institution. It established an impersonal
government with a clear hierarchical structure in which very
soon there arose a genuine bureaucracy - which is, of course,
what enabled the irrigation cities to become irrigation em-
pires .
Even more basic: the irrigation city first conceived of man as
a citizen. It had to go beyond the narrow bounds of tribe and
clan and had to weld people of very different origins and blood
into one community. This required the first supra-tribal deity,
the god of the city. It also required the first clear distinction
between custom and law and the development of an impersonal,
abstract, codified legal system. Indeed, practically all legal con-
cepts, whether of criminal or of civil law. go back to the irri~
gation city. The first great code of law, that of Hammurabi,
The First Technological Revolution and Its Lessons 101
ahnost four thousand years ago, would still be applicable to a
good deal of legal business in today's highly developed, indus-
trial society.
The irrigation city also first developed a standing army - it
had to. For the farmer was defenceless and vulnerable and,
above all, immobile. The irrigation city which, thanks to its tech-
nology, produced a surplus, for the first time in human affairs,
was a most attractive target for the barbarian outside the gates,
the tribal nomads of steppe and desert. And with the army came
specific fighting technology and fighting equipment: the war
horse and the chariot, the lance and the shield, armour and the
catapult.
(2) It was in the irrigation city that social classes first de-
veloped. It needed people permanently engaged in producing
the farm products on which all the city lived; it needed farmers.
It needed soldiers to defend them. And it needed a governing
class with knowledge, that is, originally a priestly class. Down to
the end of the nineteenth century these three 'estates' were still
considered basic in society. *
But at the same time the irrigation city went in for special-
ization of labour resulting in the emergence of artisans and
craftsmen: potters, weavers, metalworkers, and so on; and of
professional people: scribes, lawyers; judges, physicians.
And because it produced a surplus, it first engaged in organ-
ized trade which brought with it not only the merchant but
money, credit, and a law that extended beyond the city to
give protection, predictability, and justice to the stranger, the
trader from far away. This, by the way, also made necessary
international relations and international law. In fact, there
is not very much difference between a nineteenth-century
trade treaty and the trade treaties of the irrigation empires of
antiquity.
(3) The irrigation city first had knowledge, organized it, and
institutionalized it. Both because it required considerable
knowledge to construct and maintain the complex engineering
works that regulated the vital water supply and because it had to
• See the brilliant though one-sided book by Karl A. Wittvogel, Oriental
Despotism: A Comparative Study 0/ Total Power (New Haven, Conn.,
1957).
manage complex economic transactions stretching over many
years and over hundreds of mUes, the irrigation city needed
records, and this, of course, meant writing. It needed astron-
omical data, as it depended on a calendar. It needed means of
navigating across sea or desert. It, therefore, had to organize
both the supply of the needed information and its processing
into learnable and teachable knowledge. As a result, the irri-
gation city developed the first schools and the first teachers. It
developed the first systematic observation of natural phenom-
ena, indeed. the first approach to nature as something outside of
and different from man and governed by its own rational and
independent laws.
(4) Finally, the irrigation city created the individua1. Outside
the city, as we can still see from those tribal communities that
have survived to our days, only the tribe had existence. The
individual as such was neither seen nor paid attention to. In the
irrigation city of antiquity, however, the individual became, of
necessity, the focal point. And with this emerged not only com-
passion and the concept of justice; with it emerged the arts as we
know them, the poets, and eventually the religions and the phil·
osophers.
This is, of course, not even the barest sketch. All I wanted to
suggest is the scope and magnitude of social and political inno-
vation that underlay the rise of the irrigation civilizations. All I
wanted to stress is that the irrigation city was essentially 'mod-
ern', as we have understood the term. and that, until today.
history largely consisted in building on the foundations laid five
thousand or more years ago. In fact, one can argue that human
history, in the last five thousand years, has largely been an ex-
tension of the social and political institutions of the irrigation
city to larger and larger areas, that is, to an areas on the globe
where water supply is adequate for the systematic tilling of the
soil. In its beginnings, the irrigation city was the oasis in a tribal,
nomadic world. By 1900 it was the tribal, nomadic world that
had become the exception.
The irrigation civilization was based squarely upon a tech-
nological revolution. It can with justice be called a "tech-
nological polity', All its institutions were responses to
opportunities and challenges that new technology ofi:ered. An
its institutions were essentially aimed at making the new tech-
nology most productive.
I hope you will allow me one diversion.

The history of the irrigation civilizations has yet to be written.
There is a tremendous amount of material available now, where
fifty years ago we had, at best, fragments. There are splendid
discussions available of this or that irrigation civilization, for
instance of Sumer. But the very big job of recreating this great
achievement of man and of telling the story of his first great
civilization is yet ahead of us.
This should be pre-eminently a job for historians of tech-
nology such as we profess to be. At the very least the job calls
for a historian with high interest in, and genuine understanding
of, technology. The essential theme around which this history
will have to be written must be the impacts and capacities of the
new techn010gy and the opportunities and challenges which
this, the first great technological revolution, presented. The
social, political, cultural institutions, familiar though they are to
us today - for they are in large measure the institutions we have
been living with for five thousand years - were all brand-new
then, and were all the outgrowth of new technology and of at-
tempts to solve the problems the new technology posed.
It is our contention in the Society for the History of Tech-
nology that the history of technology is a major, distinct strand
in the web of human history. We believe that the history of
mankind cannot be properly understood without relating to it
the history of man's work and man's tools, that is, the history of
technology. Some of our colleagues and friends -let me mention
only such familiar names as Lewis Mumford, Fairfield Osborn,
Joseph Needham, R. J. Forbes, Cyril Stanley Smith, and Lynn
White - have in their own works brilliantly demonstrated the
profound impact of technology on political, social, economic,
and cultural history. But while technological change has always
had impact on the way men live and work, surely at no other
time has teclmology so literally shaped civilization and culture
as during the first technological revolution, that is, during the
rise of the irrigation civilizations of antiquity.
Only now, however, is it possible to tell the story. No longer
can its neglect be justified. For the facts are available. as I stated
before. And we now. because we live in a technological revol-
ution ourselves. are capable of understanding what happened
then - at the very dawn of history. There is a big job to be done:
to show that the traditional approach to our history - the ap-
proach taught in our schools - in which 'relevant' history really
begins with the Greeks (or with the Chinese dynasties). is short-
sighted and distorts the real 'ancient civilization'.
I have, however, strayed off my topic: the question I posed at

the beginning. what we can learn from the first technological
revolution regarding the impacts likely to result on man, his
society, and his government from the new industrial revolution,
the one we are living in. Does the story of the irrigation civi-
lization show man to be determined by his technical achieve-
ments. in thrall to them. coerced by them? Or does it show him
capable of using technology to his own, to human ends. and of
being the master of the tools of his own devising?
The answer which the irrigation civilizations give us to this
question is threefold.
(1) Without a shadow of doubt, major technological change
creates the need for social and political innovation. It does make
obsolete existing institutional arrangements. It does require
new and very different institutions of community, society, and
government. To this extent there can be no doubt: technological
change of a revolutionary character coerces; it demands inno-
vation.
(2) The second answer also implies a strong necessity. There
is little doubt. one would conclude from looking at the irrigation
civili:za.tions, that specific technological changes demand equally
specific social and political innovations. That the basic insti-
tutions of the irrigation cities of the Old World, despite great
cultural difference, all exhibited striking similarity may not
prove much. After all, there probably was a great deal of cul-
tural diffusion (though I refuse to get into the quicksand of
debating whether Mesopotamia or China was the original inno-
vator). But the fact that the irrigation civili:za.tions of the New
World around the Lake of Mexico and in Maya Yucatan,
though culturally completely independent. millennia later evol.
ved institutions which, in fundamentals, closely resemble those
of the Old World (e.g. an organized government with social
classes and a permanent military, and writing) would argue
strongly that the solutions to specific conditions created by new
technology have to be specific and are, therefore, limited in
number and scope.
In other words, one lesson to be learned from the first tech-
nological revolution is that new technology creates what a phil-
osopher of history might call 'objective reality'. And objective
reality has to be dealt with on its terms. Such a reality would, for
instance, be the conversion, in the course of the first techno-
logical revolution, of human space from 'habitat' into 'settle-
ment' , that is, into a permanent territorial unit always to be
found in the same place - unlike the migrating herds of pastoral
people or the hunting grounds of primitive tribes. This alone
made obsolete the tribe and demanded a permanent, imper-
sonal, and rather powerful government.
(3) But the irrigation civilizations can teach us also that the
new objective reality determines only the gross parameters of
the solutions. It determines where, and in respect to what, new
institutions are needed. It does not make anything 'inevitable'. It
leaves wide open how the new problems are to be tackled. what
the purpose and values of the new institutions are to be.
In the irrigation civilizations of the New World the indi-
vidual, for instance. failed to make his appearance. Never. as far
as we know, did these civilizations get around to separating law
from custom nor. despite a highly developed trade, did they
invent money.
Even within the Old World, where one irrigation civilization
could learn from the others, there were very great differences.
They were far from homogeneous even though all had similar
tasks to accomplish and developed similar institutions for
these tasks. The different specific answers expressed above
all different views regarding man, his position in the universe,
and his society - different purposes and greatly differing
values.
Impersonal bureaucratic government had to arise in all these
civilizations; without it they could not have functioned. But in
the Near East it was seen at a very early stage that such a
government could serve equally to exploit and hold down the
common man and to establish justice for all and protection for
the weak. From the beginning the Near East saw an ethical
decision as crucial to government. In Egypt, however, this de-
cision was never seen. The question of the purpose of govern-
ment was never asked. And the central quest of government in
China was not justice but harmony.
It was in Egypt that the individual first emerged, as witness
the many statues, portraits, and writings of professional men,
such as scribes and administrators, that have come down to us-
most of them superbly aware of the uniqueness of the individual
and clearly asserting his primacy. It is early Egypt, for instance,
which records the names of architects who built the great pyra-
mids. We have no names for the equally great architects of the
castles and palaces of Assur or Babylon, let alone for the early
architects of China. But Egypt suppressed the individual after a
fairly short period during which he flowered (perhaps as part of
the reaction against the dangerous heresies of Ikhnaton). There
is no individual left in the records of the Middle and New King-
doms, which perhaps explains their relative sterility.
In the other areas two entirely different basic approaches
emerged. One, that of Mesopotamia and of the Taoists, we
might call 'personalism'. the approach that found its greatest
expression later in the Hebrew prophets and in the Greek
dramatists. Here the stress is on developing to the fullest the
capacities of the person. In the other approach - we might call it
'rationalism', taught and exemplified above all by Confucius -
the aim is the moulding and shaping of the individual according
to pre-established ideals of rightness and perfection. I need not
ten you that both these approaches still permeate our thinking
about education.
Or take the military. Organized defence was a necessity for
the irrigation civilization. But three different approaches
emerged: a separate military class supported through tribute by
the producing class, the farmers; the citizen-army drafted from
the peasantry itself; and mercenaries. There is very little doubt
that from the beginning it was clearly understood that each of
these three approaches had very real political consequences. It is
hardly coincidence, 1 believe, that Egypt, originally unified by
overthrowing local, petty chieftains, never developed afterward
a professional permanent military class.
Even the class structure, though it characterizes all irrigation
civilizations, showed great differences from culture to culture
and within the same culture at different times. It was being used
to create permanent castes and complete social immobility, but
it was also used with great skill to create a very high degree of
social mobility and a substantial measure of opportunities for
the gifted and ambitious.
Or take science. We now know that no early civilization ex-
celled China in the quality and quantity of scientific obser-
vations. And yet we also know that early Chinese culture did
not point towards anything we would call science. Perhaps be-
cause of their rationalism the Chinese refrained from general.
ization. And though fanciful and speculative, it is the
generalizations of the Near East and the mathematics of Egypt
which point the way towards systematic science. The Chinese,
with their superb gift for accurate observation, could obtain an
enormous amount of information about nature. But their view
of the universe remained totally unaffected thereby - in sharp
contrast to what we know about the Middle Eastern develop-
ments out of which Europe arose.
In brief, the history of man's first technological revolution
indicates the following:
(1) Technological revolutions create an objective need for
social and political innovations. They create a need also for
identifying the areas in which new institutions are needed and
old ones are becoming obsolete.
(2) The new institutions have to be appropriate to specific new
needs. There are right social and political responses to tech-
nology and wrong social and political responses. To the extent
that only a right institutional response will do, society and
government are largely circumscribed by new technology.
(3) But the values these institutions attempt to realize, the
human and social purposes to which they are applied, and, per·
haps most important, the emphasis and stress laid on one pur·
pose as against another, are largely within human control. The
bony structure, the hard stuff of a society, is prescribed by the
tasks it has to accomplish. But the ethos of the society is in
man's hands and is largely a matter of the 'how' rather than of
the 'what'.
For the first time in thousands of years, we face again a situ-
ation that can be compared with what our remote ancestors
faced at the time of the irrigation civilization. It is not only the
speed of technological change that creates a revolution, it is its
scope as well. Above all, today, as seven thousand years ago,
technological developments from a great many areas are grow-
ing together to create a new human environment. This has not
been true of any period between the first technological revol-
ution and the technological revolution that got under way two
hundred years ago and has still clearly not run its course.
We, therefore, face a big task of identifying the areas in which
social and political innovations are needed. We face a big task in
developing the institutions for the new tasks, institutions ad-
equate to the new needs and to the new capacities which tech-
nological change is casting up. And, finally, we face the biggest
task of them all, the task of ensuring that the new institutions
embody the values we believe in, aspire to the purposes we
consider right, and serve human freedom, human dignity, and
human ends.
If an educated man of those days of the first technological
revolution - an educated Sumerian perhaps or an educated an-
cient Chinese -looked at us today, he would certainly be totally
stumped by our technology. But he would, I am sure, find our
existing social and political institutions reasonably familiar -
they are after all, by and large, not fundamentally different from
the institutions he and his contemporaries first fashioned. And,
I am quite certain, he would have nothing but a wry smile for
both those among us who predict a technological heaven and
those who predict a technological hell of 'alienation', of 'tech-
nological unemployment', and so on. He might well mutter to
himself, 'This is where I came in.' But to us he might well say,
'A time such as was mine and such as is yours, a time of true
technological revolution, is not a time for exultation. It is not a
time for despair either. It is a time for work and for respon-
sibility.'
8. Long-range Planning
IT is easier to define long-range planning by what it is not

rather than by what it is. Three things in particular, which it is
commonly believed to be, it emphatically is not.
(l) First, it is not 'forecasting'. It is not masterminding the
future, in other words. Any attempt to do so is foolish; human
beings can neither predict nor control the future.
If anyone still suffers from the delusion that the ability to
forecast beyond the shortest time-span is given to us, let him
look at the headlines in yesterday's paper, and then ask himself
which of them he could possibly have predicted ten years ago.
Could he have forecast that by today the Russians would

have drawn even with us in the most advanced branches of
physical sciences and of engineering? Could he have forecast
that West Germany, in complete ruins and chaos then, would
have become the most conservative country in the world and
one of the most productive ones, let alone that it would be-
come very stable politically? Could he have forecast that the
Near East would become a central trouble spot, or would he
have had to assume that the oil revenues there would take
care of all problems?
This is the way the future always behaves. To try to master-

mind it is, therefore, childish; we can only discredit what we are
doing by attempting it. We must start out with the conclusion
that forecasting is not respectable and not worthwhile beyond
This article, reprinted from Management Science. vol. 5, No.3 (April 1959)
is based on a paper given before the Fourth International Meeting of the
Institute of Management Sciences, held in Detroit, 17-18 October 1957.
the shortest of periods. Long-range planning is necessary pre-
cisely because we cannot forecast.
But there is another, and even more compelling, reason why
forecasting is not long-range planning. Forecasting attempts to
find the most probable course of events, or at best, a range of
probabilities. But the entrepreneurial problem is the unique
event that will change the possibilities, for the entrepreneurial
universe is not a physical- but a value-universe. Indeed, the cen-
tral entrepreneurial contribution, and the one which alone is
rewarded with a profit, is to bring about the unique event, the
innovation that changes the probabilities.
Let me give an example - a very elementary one which has
nothing to do with innovation but which illustrates the import-
ance of the improbable even for purely adaptive business-
behaviour.
A large coffee distributor has for many years struggled with

the problem of the location and capacity of its processing
plants throughout the country. It had long been known that
coffee prices were as important a factor in this, as location of
market, volume, or transportation and delivery strategy.
Now if we can forecast anything, it is single-commodity
prices; and the price forecasts of the company economists have
been remarkably accurate. Yet the decisions on plant location
and capacity based on these forecasts have again and again
proven costly blunders. Extreme pricing events, the prob-
ability of which at anyone time was exceedingly low, had,
even if they lasted only for a week at a time, impact on the
economics of the system that were vastly greater than that of
the accurately forecast 'averages' . Forecasting, in other
words, obscured economic reality. What was needed (as the
Theory of Games could have proven) was to look at the ex-
treme possibilities, and to ask, 'Which of these can we not
afford to disregard?'
The only thing atypical in this example is that it is so simple.

Usually things are quite a bit more complex. But despite its
(deceptive) simplicity it shows why forecasting is not an ad-
equate basis even for purely adaptive behaviour. let alone
Long-range Planning 111
for the entrepreneurial decisions of long-range planning.
(2) The next thing to be said about what long-range planning
is not, is that it does not deal with future decisions. It deals with
the futurity of present decisions.
Decisions exist only in the present. The question that faces
the long-range planner is not what we should do tomorrow. It is:
what do we have to do today to be ready for an uncertain
tomorrow? The question is not what will happen in the future.
It is: what futurity do we have to factor into our present think-
ing and doing, what time-spans do we have to consider, and how
do we converge them to a simultaneous decision in the pre-
sent?
Decision making is essentially a time machine which syn-
chronizes into one present a great number of divergent
time-spans. This is, I think, something which we are only learn-
ing now. OUf approach today still tends towards the making of
plans for something we will decide to do in the future. This may
be a very entertaining exercise, but it is a futile one.
Again, long-range planning is necessary because we can make
decisions only in the present; the rest are pious intentions. And
yet we cannot make decisions for the present alone; the most
expedient, most opportunist decision -let alone the decision not
to decide - may commit us on a long-range basis, if not per-
manently and irrevocably.
(3) Finally, the most common misconception of all, long-
range planning is not an attempt to eliminate risk. It is not even
an attempt to minimize risk. Indeed, any such attempt can only
lead to irrational and unlimited risk and to certain disaster.
The central fact about economic activity is that, by definition,
it commits present resources to future and, therefore, highly
uncertain expectations. To take risk is, therefore, the essence of
economic activity. Indeed, one of the most rigorous theorems of
economics (Boehm-Bawerk's Law) proves that existing means
of production will yield greater economic perfonnance only
through greater uncertainty, that is, through greater risk.
But while it is futile to try to eliminate risk, and questionable
to try to minimize it, it is essential that the risks taken be the
right risks. The end result of successful long-range planning
must be a capacity to take a greater risk; for this is the only way
to improve entrepreneurial performance. To do this, however,
we must know and understand the risks we take. We must be
able to rationally choose among risk-taking courses of action
rather than plunge into uncertainty on the basis of hunch, hear-
say, or experience (no matter how meticulously quantified).
Now I think. we can attempt to define what long-range plan-
ning is. It is the continuous process of making present
entrepreneurial (risk-taking) decisions systematically and with
the best possible knowledge of their futurity, organizing sys-
tematically the efforts needed to carry out these decisions, and
measuring the results of these decisions against the expectations
through organized, systematic feedback.
'This is all very well: many experienced businessmen might say

(and do say). 'But why make a production out of it? Isn't this
what the entrepreneur has been doing all along, and doing quite
successfully? Why, then, should it need all this elaborate
mumbo jumbo? Why should it be an organized, perhaps even a
separate activity? Why, in other words, should we even talk
about 'long-range planning', let alone do it?'
It is perfectly true that there is nothing very new to en-
trepreneurial decisions. They have been made as long as we
have had entrepreneurs. There is nothing new in here regarding
the essentials of economic activity. It has always been the com-
mitment of present resources to future expectations; and for the
last three hundred years this has been done in contemplation of
change. (This was not true earlier. Earlier economic activity was
based on the assumption that there would be no change, which
assumption was institutionally guarded and defended. Al-
together up to the seventeenth century it was the purpose of all
human institutions to prevent change. The business enterprise is
a significant and rather amazing novelty in that it is the first
human institution having the purpose of bringing about
change.)
But there are several things which are new; and they have
created the need for the organized, systematic, and, above all,
specific process that we call 'long-range planning'. *
• 'Long-range planning' is not a term I like or would have picked myself. It
(1) The time-span of entrepreneurial and managerial de-
cisions has been lengthening so fast and so much as to make
necessary systematic exploration of the uncertainty and risk of
decisions.
In 1888 or thereabouts, an old and perhaps apocryphal

story goes, the great Thomas Edison, already a world figure,
went to one of the big banks in New York for a loan on
something he was working on. He had plenty of collateral and
he was a great man; so the vice-presidents all bowed and said
'Certainly, Mr. Edison, how much do you need?' But one of
them, out of idle curiosity asked, 'Tell me, Mr. Edison, how
long will it be before you have this new product?' Edison
looked him in the eye and said, 'Son, jUdging from past ex-
perience, it will be about eighteen months before I even know
whether I'll have a product or not.' Whereupon the vice-presi-
dents collapsed in a body, and, despite the collateral, turned
down the loan application. The man was obviously mad;
eighteen months of uncertainty was surely not a risk a sane
businessman would take!
Today practically every manager takes ten or twenty year

risks without wincing. He takes them in product development,
in research, in market development, in the development of a
sales organization, and in almost anything. This lengthening of
the time-span of commitment is one of the most significant feat-
ures of our age. It underlies our economic advances. But while
quantitative in itself, it has changed the qualitative character of
entrepreneurial decisions. It has, so to speak, converted time
from being a dimension in which business decisions are being
made into an essential element of the decisions themselves.
(2) Another new feature is the speed and risk of innovation.
To define what we mean by this term would go far beyond the
scope of this paper. *
is a misnomer - as are so many of our terms in economics and management,
such as 'capitalism', 'automation', 'operational research', 'industrial engineer-
ing', or 'depreciation'. But it is too late to do anything about the term; it has
become common usage.
* For discussion, see my book, The Landmarks of Tomorrow (London:
Heinemann, 1959).
But we do not need to know more than that industrial re-
search expenditures (that is, business expenditures aimed at
innovating primarily peacetime products and processes) have
increased in this country from less than $100 million in 1928 to
$7,000 or 8,000 million in 1958. Clearly, a technologically slow-
moving, if not essentially stable, economy has become one of
violent technological flux, rapid obsolescence. and great uncer-
tainty.
(3) Then there is the growing complexity both of the business
enterprise internally. and of the economy and society in which it
exists. There is the growing specialization of work which creates
increasing need for common vision, common understanding,
and common language. without which top-management de-
cisions, however right. will never become effective action.
(4) Finally - a subtle, but perhaps the most important point
- the typical businessman's concept of the basis of en-
trepreneurial decision is, after all. a misconception.
Most businessmen still believe that these decisions are made
by 'top management'. Indeed, practically all textbooks lay down
the dictum that 'basic policy decisions' are the 'prerogative of
top management'. At most, top management 'delegates' certain
decisions.
But this reflects yesterday's rather than today's reality. let
alone that of tomorrow. It is perfectly true that top management
must have the final say. the final responsibility. But the business
enterprise of today is no longer an organization in which there
are a handful of 'bosses' at the top who make all the decisions
while the 'workers' carry out orders. It is primarily an organ-
ization* of professionals of highly specialized knowledge exer-
cising autonomous. responsible judgment. And every one of
them - whether manager or individual expert contributor - con-
stantly makes truly entrepreneurial decisions, that is, decisions
which affect the economic characteristics and risks of the entire
enterprise. He makes them not by 'delegation from above' but
inevitably in the performance of his own job and work.
For this organization to be functioning, two things are
needed: knowledge by the entire organization of what the di-
• For a discussion of this 'new organization', see again my Landmarks ot
Tomorrow.
.Long-range Planning 115
recti on, the goals, the expectations are; and knowledge by top
management as to what the decisions, commitments, and efforts
of the people in the organization are. The needed focus - one
might call it a model of the relevants in internal and external
environment - only a 'long-range plan' can provide.
One way to summarize what is new and different in the pro-
cess of entrepreneurial decision making is in terms of infor-
mation. The amount, diversity, and ambiguity of the
information that is beating in on the decision maker have all
been increasing so much that the built-in experience reaction
that a good manager has cannot handle it. He breaks down; and
his breakdown will take either of the two forms known to any
experimental psychologist. One is withdrawal from reality, i.e.
'1 know what I know and I only go by it; the rest is quite irrel-
evant and I won't even look at it.' Or there is a feeling that the
universe has become completely irrational so that one decision
is as good as the other, resulting in paralysis. We see both in
executives who have to make decisions today. Neither is likely
to result in rational or in successful decisions.
There is something else managers and management scien-

tists might learn from the psychologists. Organization of in-
formation is often more important to the ability to perceive
and act than analysis and understanding of the information.
I recall one experience with the organization of research-plan-
ning in a pharmaceutical company. The attempt to analyse
the research decisions .- even to define alternatives of de-
cisions - was a dismal failure. In the attempt, however, the
decisions were classified to the point where the research
people could know what kind of a decision was possible at
what stage. They still did not know what factors should or
should not be considered in a given decision, nor what its
risks were. They could not explain why they made this de-
cision rather than another one, nor spell out what they ex-
pected. But the mere organization of this information enabled
them again to apply their experience and to 'play hunches' -
with measurable and very significant improvement in the per-
formance of the entire research group.
'Long-range planning' is more than organization and analysis
of information; it is a decision-making process. But even the
information job cannot be done except as part of an organized
planning effort - otherwise there is no way of determining which
information is relevant.
What, then, are the requirements of long-range planning? We

cannot satisfy all of them as yet with any degree of competence;
but we can specify them.
Indeed, we can - and should - give two sets of specifications:
one in terms of the characteristics of the process itself; another
in terms of its major and specific new-knowledge content.
(1) Risk-taking entrepreneurial decisions, no matter whether

made rationally or by tea-leaf reading, always embody the same
eight elements:
(a) Objectives. This is, admittedly, an elusive term, perhaps

even a metaphysical one. It may be as difficult for Management
Science to define 'objectives' as it is for biology to define 'life'.
Yet, we will be as unable to do without objectives as the biolo-
gists are unable to do without life. Any entrepreneurial decision,
let alone the intergrated decision-system we call a 'long-range
plan', has objectives, consciously or not.
(b) Assumptions. These are what is believed by the people
who make and carry out decisions to be 'real' in the internal and
external universe of the business.
(c) Expectations - the future events or results considered
likely or attainable.
These three elements can be said to define the decision.
(d) Alternative courses of action. There never is - indeed, in a
true uncertainty situation there never can be - 'one right de-
cision'. There cannot even be 'one best decision'. There are
always 'wrong decisions'. that is, decisions inadequate to the
objectives, incompatible with the assumptions, or grossly im~
probable in the light of the expectations. But once these have
been eliminated, there will still be alternatives left - each a
different configuration of objectives. assumptions. and expec-
tations, each with its own risks and its own ratio between risks
and rewards, each with its own impact, its specific efforts, and
its own results. Every decision is thus a value-judgment - it is
not the 'facts that decide'; people have to choose between imper-
fect alternatives on the basis of uncertain knowledge and frag-
mentary understanding.
Two alternatives deserve special mention, if only because

they have to be considered in almost every case. One is the
alternative of no action (which is, of course, what postponing
a decision often amounts to); the other is the very important
choice between adaptive and innovating action - each having
risks that differ greatly in character though not necessarily in
magnitude.
(e) The next element in the decision-making process is the

decision itself.
<f) But there is no such thing as one isolated decision; every
decision is, of necessity, part of a decision-structure.
Every financial man knows, for instance, that the original

capital appropriation on a new investment implies a com-
mitment to future- and usually larger-capital appropriations
which, however, are almost never as much as mentioned in
the proposal submitted. Few of them seem to realize. how-
ever, that this implies not only a positive commitment but
also, by mortgaging further capital resources, limits future
freedom of action. The structuring impact of a decision is
even greater in respect to allocations of scarce manpower such
as research people.
(g) A decision is only pious intention unless it leads to action.

Every decision, therefore, has an impact stage.
This impact always follows Newton's Second Law, so to
speak; it consists of action and reaction. It requires effort. But it
also dislocates. There is. therefore, always the question: what
effort is required, by whom, and where? What must people
know, what must they do, and what must they achieve? But
there is also the question - generally neglected - what does this
decision do to other areas? Where does it shift the burden, the
weaknesses, and the stress points; and what impact does it have
on the outside; in the market, in the supply structure, in the
community, and so on?
(h) And, finally, there are results.
Each of these elements of the process deserves an entire book
by itself. But I think I have said enough to show that both, the
process itself and each element in it, are rational, no matter how
irrational and arbitrary they may appear. Both the process and
all its elements can, therefore, be defined, can be studied, and
can be analysed. And both can be improved through systematic
and organized work. In particular, as in all rational processes,
the entire process is improved and strengthened as we define,
clarify, and analyse each of its constituent elements.
(2) We can also, as said above, describe long-range planning

in terms of its specific new-knowledge content.
Among the areas where such new knowledge is particularly
cogent, might be mentioned:
(a) The time dimensions of planning.
To say 'long-range' or 'short-range' planning implies that a
given time-span defines the planning; and this is actually how
businesses look at it when they speak of a 'five-year plan' or a
'ten-year plan'. But the essence of planning is to make present
decisions with knowledge of their futurity. It is the futurity that
determines the span, and not vice versa.
Strictly speaking, 'short range' and 'long range' do not de-

scribe time-spans but stages in every decision. 'Short-range' is
the stage before the decision has become fully effective, the
stage during which it is only 'costs' and not yet 'results'. The
'short range' of a decision to build a steel mill are the five
years or so until the mill is in production. And the 'long-range'
of any decision is the period of expected performance needed
to make the decision a successful one - the twenty or more
years of above break.-even point operations in the case of the
steel mill, for instance.
There are limitations on futurity. In business decisions the

most precise mathematical statement is often that of my eighth-
grade teacher that parallels are two lines which do not meet this
side of the schoolyard. Certainly, in the expectations and antici-
pations of a business, the old rule of statistics usually applies -
that anything beyond twenty years equals infinity; and since
expectations beyond twenty years hence have normally a present
value of zero, they should receive normally only a minimal allo-
cation of present efforts and resources.
Yet it is also true that, if future results require a long gestation
period, they will be obtained only if initiated early enough.
Hence, long-range planning requires knowledge of futurity:
what do we have to do today if we want to be some place in the
future? What will not get done at all if we do not commit re-
sources to it today?
If we know that it takes ninety-nine years to grow Douglas

firs in the Northwest to pulping size, planting seedlings today
is the only way we can provide for pulp supply in ninety-nine
years. Some one may well develop some speeding-up hor-
mone; but we cannot bank on it if we are in the paper indus-
try. It is quite conceivable, may, indeed, be highly probable,
that we will use trees primarily as a source of chemicals long
before these trees grow to maturity. We may even get the bulk
of paper supply thirty years hence from less precious, less
highly structured sources of cellulose than a tree, which is the
most advanced chemical factory in the plant kingdom. This
simply means, however, that our forests may put us into the
chemical industry some time within the next thirty years; and
we had better learn now something about chemistry. If our
paper plants depend on Douglas fir, our planning cannot
confine itself to twenty years, but must consider ninety-nine
years. For we must be able to say whether we have to plant
trees today, or whether we can postpone this expensive job.
But on other decisions even five years would be absurdly
long. If our business is buying up distress merchandise and
selling it at auction, then next week's clearance sale is 'long-
range future'; and anything beyond is largely irrelevant to
us.
It is the nature of the business and the nature of the decision
which determine the time-spans of planning.
Yet the time-spans are not static or 'given'. The time decision
itself is the first and a highly important risk-taking decision in
the planning process. It largely determines the allocation of re-
sources and efforts. It largely determines the risks taken (and
one cannot repeat too often that to postpone a decision is in
itself a risk-taking and often irrevocable decision). Indeed, the
time decision largely determines the character and nature of the
business.
(b) Decision structure and configuration.
The problem of the time dimension is closely tied in with that
of decision structure.
Underlying the whole concept of long-range planning are two
simple insights.
We need an integrated decision structure for the business as

a whole. There are really no isolated decisions on a product,
or on markets, or on people. Each major risk-taking decision
has impact throughout the whole; and no decision is isolated
in time. Every decision is a move in a chess game, except that
the rules of enterprise are by no means as clearly defined.
There is no finite 'board' and the pieces are neither as neatly
distinguished nor as few in number. Every move opens some
future opportunities for decision, and forecloses others. Every
move, therefore, commits positively and negatively.
Let me illustrate these insights with a simple example. that of

a major steel company today.
I posit that it is reasonably clear to any student of tech-

nology (not of steel technology but of technology in general)
that steelmaking is on the threshold of major technological
change. What they are perhaps the steelmaker knows, but
that they are I think any study of the pattern, rhythm. and, I
would say, morphology of technological development. might
indicate. A logical - rather than metallurgical - analysis of
the process would even indicate where the changes are likely
to occur. At the same time, the steel company faces the need
of building new capacity if it wants to keep its share of the
market, assuming that steel consumption will continue to in-
crease. A decision to build a plant today, when there is
nothing available but the old technology, means in effect that
for fifteen to twenty years the company cannot go into the
new technology except at prohibitive cost. It is very unlikely,
looking at the technological pattern, that these changes will
be satisfied by minor modifications in existing facilities; they
are likely to require new facilities to a large extent. By build-
ing today the company closes certain opportunities to itself,
or at least it very greatly raises the future entrance price. At
the same time, by making the decision to postpone building, it
may foreclose other opportunities such as market position,
perhaps irrevocably. Management therefore has to under-
stand - without perhaps too much detail- the location of this
decision in the continuing process of entrepreneurial de-
cision.
At the same time, entrepreneurial decisions must be fun-

damentally expedient decisions. It is not only impossible to
know all the contingent effects of a decision, even for the short-
est time period ahead. The very attempt to know them would
lead to complete paralysis.
But the determination of what should be considered and what
should be ignored, is in itself a difficult and consequential de-
cision. We need knowledge to make it - I might say that we need
a theory of entrepreneurial inference.
(c) The characteristics of risks.
It is not only magnitude of risk that we need to be able to
appraise in entrepreneurial decisions. It is above all the charac-
ter of the risk. Is it, for instance, the kind of risk we can afford to
take, or the kind of risk we cannot afford to take? Or is it that
rare but singularly important risk, the risk we cannot afford not
to take - sometimes regardless of the odds?
The best General Electric scientists, we are told, advised

their management in 1945 that it would be at least forty years
before nuclear energy could be used to produce electric
power commercially. Yet General Electric - rightly - decided
that it had to get into the atomic energy field. It could not
afford not to take the risk as long as there was the remotest
possibility that atomic energy would, after all. become a feas-
ible source of electric power.
We know from experience that the risk we cannot afford not

to take is like a 'high-low' poker game. A middle hand will
inevitably lose out. But we do not know why this is so. And the
other, and much more common, kinds of risk we do not really
understand at all.
(d) Finally, there is the area of measurements.
I do not have to explain to readers of Management Science
why measurements are needed in management, and especially
for the organized entrepreneurial decisions we call 'long-range
planning'.
But it should be said that in human institutions, such as a
business enterprise, measurements, strictly speaking, do not and
cannot exist. It is the definition of a measurement that it be
impersonal and objective, that is, extraneous to the event
measured. A child's growth is not dependent on the yardstick or
influenced by being recorded. But any measurement in a
business enterprise determines action - both on the part of the
measurer and the measured - and thereby directs. limits, and
causes behaviour and performance of the enterprise. Measure-
ment in the enterprise is always motivation, that is, moral force.
as much as it is ratio cognoscendi.
In addition, in long-range planning we do not deal with ob-
servable events. We deal with future events, that is, with ex-
pectations. And expectations, being incapable of being
observed, are never 'facts' and cannot be measured.
Measurements, in long-range planning, thus present very real
problems, especially conceptual ones. Yet precisely because
what we measure and how we measure determines what will be
considered relevant, and determines thereby not just what we
see, but what we - and others - do, measurements are all-im-
portant in the planning process. Above all, unless we build ex-
pectations into the planning decision in such a way that we can
very early realize whether they are actually fulfilled or not -
including a fair understanding of what are significant deviations
both in time and in scale - we cannot plan; and we have no
feedback, no way of self-control in management.
We obviously also need for long-range planning managerial
knowledge - the knowledge with respect to the operations of a
business. We need such knowledge as that of the resources avail-
able, especially the human resources, their capacities and their
limitations. We need to know how to 'translate' from business
needs, business results, and business decisions into functional
capacity and specialized effort. There is, after all, no functional
decision. there is not even functional data, just as there is no
functional profit, no functional loss, no functional investment,
no functional risk, no functional customer, no functional pro-
duct, and no functional image of a company. There is only a
unified company product, risk, investment, and so on, hence only
company performance and company results. Yet at the same
time the work obviously has to be done by people each of whom
has to be specialired. Hence for a decision to be possible, we
must be able to integrate divergent individual knowledges and
capacities into one organization potential; and for a decision to
be effective, we must be able to translate it into a diversity of
individual and expert, yet focused, efforts.
There are also big problems of knowledge in the en-
trepreneurial task that I have not mentioned - the problems of
growth and change, for instance, or those of the moral values of
a society and their meaning to business. But these are problems
that exist for many areas and disciplines other than manage-
ment.
And in this paper I have confined myself intentionally to
knowledge that is specific to the process of long-range planning.
Even so I have barely mentioned the main areas. But I think I
have said enough to substantiate three conclusions:
(a) Here are areas of genuine knowledge, not just areas in
which we need data. What we need above all, are basic theory
and conceptual thinking.
(b) The knowledge we need is new knowledge. It is not to be
found in the traditional disciplines of business such as aecount-
ing or economics. It is also not available, by and large, in the
physical or life sciences. From the existing disciplines we can
get a great deal of help, of course, especially in tools and tech-
niques. And we need all we can get. But the knowledge we need
is distinct and specific. It pertains not to the physical, the bio-
logical, or the psychological universe, though it partakes of them
all. It pertains to the specific institution, the enterprise, which is
a social institution existing in contemplation of human values.
What is 'knowledge' in respect to this institution, let alone what
is 'scientific', must, therefore, always be determined by refer-
ence to the nature, function, and purposes of this specific (and
very peculiar) institution.
(c) It is not within the decision of the entrepreneur whether he
wants to make risk-taking decisions with long futurity; he
makes them by definition. All that is within his power is to de-
cide whether he wants to make them responsibly or irrespon-
sibly, with a rational chance of effectiveness and success, or as
blind gamble against all odds. And both because the process is
essentially a rational process, and because the effectiveness of
the entrepreneurial decisions depends on the understanding and
voluntary efforts of others, the process will be the more respon-
sible and the more likely to be effective, the more it is a rational,
organized process based on knowledge.
Long-range planning is risk-taking decision making. As such it

is the responsibility of the policy maker. whether we call him
entrepreneur or manager. To do the job rationally and sys-
tematically does not change this. Long-range planning does not
'substitute facts for judgment', does not 'substitute science for
the manager' . It does not even lessen the importance and role of
managerial ability, courage. experience. intuition, or even
hunch - just as scientific biology and systematic medicine have
not lessened the importance of these qualities in the individual
physician. On the contrary. the systematic organization of the
planning job and the supply of knowledge to it should make
effective individual managerial qualities of personality and
vision.
But at the same time, long-range planning offers major oppor-
tunity and major challenge to Management Science and to the
Management Scientist.* We need systematic study of the pro-
• I would like to say here that I do not believe that the world is divided into
cess itself and of every one of its elements. We need systematic
work in a number of big areas of new knowledge - at least we
need to know enough to organize our ignorance.
At the same time, long-range planning is the crucial area; it
deals with the decisions which, in the last analysis, determine
the character and the survival of the enterprise.
So far, it must be said, Management Science has not made
much contribution to long-range planning. Sometimes one won-
ders whether those who call themselves Management Scientists
are even aware of the risk-taking character of economic activity
and of the resultant entrepreneurial job of long-range planning.
Yet, in the long run, Management Science and Management
Scientists may well, and justly. be judged by their ability to
supply the knowledge and thinking needed to make long-range
planning possible. simple. and effective.
'managers' and 'management scientists'. One man may well be both. Cer-
tainly, management scientists must understand the work and job of the man-
ager, and vice versa. But conceptually and as a kind of work the two are
distinct.
9. Business Objectives
and Survival Needs
T HE literature of business management, confined to a few

'how to do' books only fifty years ago, has grown beyond any
one man's capacity even to catalogue it. Professional education
for business has become the largest and most rapidly growing
field of professional education in this country and is growing
rapidly in all other countries in the free world. It also has ere--
ated in the advanced continuing education for experienced. ma-
ture. and successful executives - perhaps first undertaken in
systematic form at the University of Chicago - the only really
new educational concept in a hundred and fifty years.
Yet so far we have little in the way of a 'discipline' of business
enterprise, little in the way of an organized, systematic body of
knowledge. with its own theory. its own concepts, and its own
methodology of hypothesis. analysis, and verification.
THE NEED FOR A THEORY OF BUSINESS BEHAVIOUR
The absence of an adequate theory of business enterprise is not

just an academic concern; on the contrary. it underlies four
major problems central to business as well as to a free-enterprise
society.
(1) One is the obvious inability of the layman to understand
modern business enterprise and its behaviour. What goes on.
and why, 'at the top' or 'on the fourteenth floor' of the large
corporation - the central economic and one of the central social
First published in The Journal of Business oj the University of Chicago,
April 1958.
Business Objectives and Survival Needs 127
institutions of modem industrial society - is as much of a mys-
tery to the outsider as the magician's sleight of hand is to the
small boy in the audience. And the outsiders include not only
those truly outside business enterprise. They include workers
and shareholders; they include many professionally trained men
in the business - the engineers or chemists. for instance - in-
deed, they include a good many management people themselves:
supervisors, junior executives, functional managers. They may
accept what top management does but they accept on faith
rather than by reason of knowledge and understanding. Yet
such understanding is needed for the success of the individual
business as well as for the survival of industrial society and of
the free-enterprise system.
One of the real threats is the all-but-universal resistance to
profit in such a system. the all-but-universal (but totally fal-
lacious) belief that socialism - or any other ism - can operate an
industrial economy without the rake-off of profit, and the all-
but-universal concern lest profit be too high. That the danger in
a dynamic, industrial economy is that profit may be too low to
permit the risks of innovation, growth, and expansion - that,
indeed, there may be no such thing as profit but only provision
for the costs of the future - very few people understand.
This ignorance has resisted all attempt at education; this re-
sistance to profits has proved impervious to all propaganda or
appeals, even to the attempts at profit-sharing.
The only thing capable of creating understanding of the es-
sential and necessary function of profit in an expanding, risk-
taking, industrial economy is an understanding of business
enterprise. And that, for all without personal. immediate experi-
ence in the general management of a business, can come only
through a general 'model' of business enterprise, that is, through
the general theory of a systematic discipline.
(2) The second problem is the lack of any bridge of under-
standing between the macroeconomics of an economy and the
microeconomics of the most important actor in this economy,
the business enterprise. The only microeconomic concept to be
found in economic theory today is that of 'profit maximization'.
To make it fit the actual. observable behaviour of business enter-
prise, however, economists have had to bend. stretch, and
qualify it until it has lost all meaning and all usefulness. It has
become as complicated as the 'epicycles' with which pre-Cop-
ernican astronomers tried to save the geocentric view of the
universe: profit maximization may mean short-run immediate
revenue or long-range basic profitability of wealth-producing
resources; it may have to be qualified by a host of unpredictables
such as managerial power drives, union pressures, technology,
etc.; and it completely fails even then to account for business
behaviour in a growing economy. It does not enable the eco-
nomist to predict business reaction to public policy any more; to
the governmental policy maker, business reaction is as irrational
as government policy, by and large, seems to the businessman.
But in modern industrial society we must be able to 'translate'
easily from public policy to business behaviour and back again.
The policy maker must be able to assess the impact of public
policy on business behaviour; and the businessman - especially
in the large enterprise - must be able to assess the impact of his
decisions and actions on the macroeconomy. Profit-maxi-
mization does not enable us to do either, primarily because it
fails to understand the role and function of profit.
(3) The third area in which the absence of a genuine theory of
business enterprise creates very real problems is that of the
internal integration of the organization. The management
literature is full of discussions of the 'problem of the specialist'
who sees only his own functional area or of the 'problem of the
scientist in business' who resents the demand that he sub-
ordinate his knowledge to business ends. Yet we will be getting
ever more specialized; we will, of necessity, employ more and
more highly trained professionals. Each of those must be dedi-
cated to his speciality; yet each must share a common vision and
common goals and must voluntarily engage in a common effort.
To bring this about is already the most time- and energy-con-
suming job of management, certainly in our big businesses, and
no one I know claims to be able to do it successfully.
Twenty years ago it was still possible to see a business as a
mechanical assemblage of 'functions'. Today we know that,
when we talk of a business, the functions simply do not exist.
There is only business profit, business risk, business product,
business investment, and business customer. The functions are
irrelevant to anyone of them. And yet it is equally obvious, if
we look at the business, that the work has to be done by people
who specialize, because nobody can know enough even to know
all there is to be known about one of the major functions today-
they are growing too fast. It is already asking a great deal of a
good man to be a good functional man, and, in some areas, it is
rapidly becoming almost too much to ask of a man. How, then,
do we transmute functional knowledge and functional con-
tribution into general direction and general results? The ability
of big business - but even of many small ones - to survive
depends on our ability to solve this problem.
(4) The final problem - also a symptom both of the lack of
discipline and of the need for it - is of course the businessman's
own attitude towards theory. When he says, 'This is theoretical',
he by and large still means: 'This is irrelevant'. Whether manag-
ing a business enterprise could or should be a science (and one's
answer to this question depends primarily on how one defines
the word science), we need to be able to consider theory the
foundation for good practice. We would have no modern doc-
tors, unless medicine (without itself being a science in any strict
sense of the word) considered the life-sciences and their theories
the foundation of good practice. Without such a foundation in a
discipline of business enterprise, we cannot make valid general
statements, cannot, therefore, predict the outcome of actions or
decisions, and can judge them only by hindsight and by their
results - when it is too late to do anything. All we can have at
the time of decision would be hunches, hopes, and opinions,
and, considering the dependence of modern society on business
enterprise and the impact of managerial decisions, this is not
good enough.
Without such a discipline we could also neither teach nor
learn, let alone work systematically on the improvement of our
knowledge and of our performance as managers of a business.
Yet the need both for managers and for constant improvement
of their knowledge and performance is so tremendous, quan-
titatively as well as qualitatively, that we simply cannot depend
on the 'natural selection' of a handful of geniuses.
The need for a systematic discipline of business enterprise is
particularly pressing in the underdeveloped growth countries of
the world. Their ability to develop themselves will depend
above all, on their ability rapidly to develop men capable of
managing business enterprise, that is, on the availability of a
discipline that can be taught and can be learned. If all that is
available to them is development through experience, they will
almost inevitably be pushed towards some form of collectivism.
For, however wasteful all collectivism is of economic resources,
however destructive it is of freedom, dignity, and happiness, it
economizes the managerial resource through its concentration
of entrepreneurial and managerial decisions in the hands of a
few planners at the top.
WHAT ARE THE SURVIVAL NEEDS OF BUSINESS

ENTERPRISE?
We are still a long way from a genuine 'discipline' of business

enterprise. But there is emerging today a foundation of knowl-
edge and understanding. It is being created in some of our large
companies and in some of our universities. In some places the
starting point is economics, in some marketing, in some the
aoministrative process, in others such new methodologies as
operational or systems research or long-range planning. But
what all these approaches, regardless of starting point or termin-
ology, have in common is that they start out with the question:
What are the survival needs of business enterprise? What, in
other words, does it have to be, to do, to achieve - to exist at all?
For each of these needs there has, then, to be an objective.
It may be said that this approach goes back to the pioneering
work on business objectives that was done at the Bell Telephone
System under the presidency of Theodore Vail a full forty
years ago. Certainly, that was the first time the management of a
large business enterprise refused to accept the old, glib state-
ment, 'The objective of a business is to make a profit', and asked
instead, 'On what will our survival as a privately owned business
depend?' The practical effectiveness of the seemingly so obvious
and simple approach is proved by the survival, unique in de-
veloped countries, of privately owned telecommunications in
the United States and Canada. A main reason for this was cer-
tainly the 'survival objective' Vail set for the Bell System: 'Pub-
lic satisfaction with our service' . Yet, though proved in practice,
this remained, until recently, an isolated example. And it prob-
ably had to remain such until, within the last generation, the
biologists developed the approach to understanding of systems
by means of defining 'essential survival functions'.
'Survival objectives' are general; they must be the same in
general for each and every business. Yet they are also specific;
different performance and different results would be needed in
each objective area for any particular business. And every indi-
vidual business will also need its own specific balance between
them at any given time.
The concept of survival objectives thus fulfils the first re-
quirement of a genuine theory - that it be both formal and yet
concretely applicable. that is, practical. Survival objectives are
also objective both as to their nature and as to the specific re-
quirements in a given situation. They do not depend on opinion
or hunch. Yet - and this is essential - they do not 'determine'
entrepreneurial or managerial decisions; they are not (as is so
much of traditional economics or of contemporary behavioural
science) an attempt to substitute formulas for risk-taking de-
cision or responsible judgment. They attempt rather to establish
the foundation for decision and jUdgment, to make what is the
specific task of entrepreneur and manager possible, effective,
and rational. and to make it understandable and understood.
We have reached the stage where we know the 'functions' of a

business enterprise, with function being used the way the bio-
logist talks about procreation as a function essential for the
perpetuation of a living species.
There are five such survival functions of business enterprise.
Together they define the areas in which each business. to sur-
vive, has to reach a standard of performance and produce re-
sults above a minimum level. They are also the areas affected by
every business decision and, in turn, affecting every business
result. Together these five areas of survival objectives describe
therefore (operationally) the nature of business enterprise.
(1) The enterprise needs, first, a human organization de-
signed for joint performance and capable of perpetuating it-
self.
It is an assemblage not of brick and mortar but of people.
These people must work as individuals; they cannot work any
other way. Yet they must voluntarily work for a common result
and must, therefore, be organized for joint performance. The
first requirement of business is, therefore, that there be an
effective human organization.
But business must also be capable of perpetuating itself as a
human organization if only because all the things we decide
every day, if indeed, we are managers - take for their operation
more time than the Good Lord has allotted us. We are not
making a single decision the end of which we are likely to see
while still working. How many managerial decisions will be
liquidated within twenty years, will have disappeared, unless
they are totally foolish decisions? Most of the decisions we
make take five years before they even begin to have an impact;
this is the short range of a decision. And then they take ten or
fifteen years before (at the very earliest) they are liquidated,
have ceased to be effective, and, therefore, have ceased to have
to be reasonably right.
This means that the enterprise as a human organization has to
be able to perpetuate itself. It has to be able to survive the life-
span of anyone man.
(2) The second survival objective arises from the fact that the
enterprise exists in society and economy. In business schools
and business thinking we often tend to assume that the business
enterprise exists by itself in a vacuum. We look at it from the
inside. But the business enterprise is a creature of society and
economy. If there is one thing we do know, it is that society
and/or economy can put any business out of existence over~
night - nothing is simpler. The enterprise exists on sufferance
and exists only as long as society and economy believe that it
does a job and a necessary, a useful, and a productive one.
I am not talking here of public relations; they are only one
means. I am not talking of something that concerns only the
giants. And I am not talking of socialism. Even if the free-
enterprise system survives, individual businesses and industries
within it may be - and of course often have been - restricted,
penalized, or even put out of business very fast by social or
political action such as taxes or zoning laws, municipal ordi~
nances or federal regulation, and so forth. Anticipation of
social climate and economic policy, on the one hand, and organ-
ized behaviour to create what business needs to survive in re-
spect to both are, therefore, genuine survival needs of each
business at all times. They have to be considered in every action
and have to be factored into every business decision.
Equally, the business is a creature of the economy and at the
mercy of changes in it - in population and income, ways of life
and spending patterns, expectations and values. Again here is
need for objectives which anticipate so as to enable the business
to adapt and which at the same time aim at creating the most
favourable conditions.
(3) Then, of course, there is the area of the specific purpose of
business, of its contribution. The purpose is certainly to supply
an economic good and service. This is the only reason why
business exists. We would not suffer this complicated, difficult,
and controversial institution except for the fact that we have not
found any better way of supplying economic goods and services
productively, economically, and efficiently. So, as far as we
know, no better way exists. But that is its only justification, its
only purpose.
(4) There is another purpose characteristic which I would, so
to speak, call the nature of the beast; namely, that this all hap-
pens in a changing economy and a changing technology. Indeed,
in the business enterprise we have the first institution which is
designed to produce change. All human institutions since the
dawn of prehistory or earlier had always been designed to pre-
vent change - all of them: family, government, church, army.
Change has always been a catastrophic threat to human security.
But in the business enterprise we have an institution that is
designed to create change. This is a very novel thing. Inciden-
tally, it is one of the basic reasons for the complexity and
difficulty of the institution.
This means not only that business must be able to adapt to
change - that would be nothing very new. It means that every
business, to survive, must strive to innovate. And innovation,
that is, purposeful. organized action to bring about the new, is as
important in the social field - the ways, methods, and organ-
ization of business, its marketing and market, its financial and
personnel management, and so on - as it is in the technological
areas of product and process.
In this country industrial research expenditures have risen
from a scant one-tenth of 1 per cent of national income to I! or 2
per cent in less than thirty years. The bulk of this increase has
come in the last ten years; this means that the impact in the form
of major technological changes is still ahead of us. The speed of
change in nontechnological innovation, for instance, in dis-
tribution channels, has been equally great. Yet many businesses
are still not even geared to adaptation to change; and only a mere
handful are geared to innovation - and then primarily in the
technological areas. Here lies, therefore, a great need for a valid
theory of business enterprise but also a great opportunity for
contribution.
(5) Finally, there is an absolute requirement of survival,
namely, that of profitability, for the very simple reason that
everything I have said so far spells out risk. Everything I have
said so far says that it is the purpose, the nature, and the neces-
sity of this institution to take risks, to create risks. And risks are
genuine costs. They are as genuine a cost as any the accountant
can put his finger on. The only difference is that, until the future
has become past, we do not know how big a cost; but they are
costs. Unless we provide for costs, we are going to destroy capi-
tal. Unless we provide for loss, which is another way of saying
for future cost, we are going to destroy wealth. Unless we pro-
vide for risk. we are going to destroy capacity to produce. And,
therefore, a minimum profitability, adequate to the risks which
we. by necessity, assume and create, is an absolute condition of
survival not only for the enterprise but for society.
This says three things. First, the need for profitability is ob-
jective. It is of the nature of business enterprise and as such is
independent of the motives of the businessman or of the struc-
ture of the 'system'. If we had archangels running businesses
(who, by definition, are deeply disinterested in the profit motive)
they would have to make a profit and would have to watch
profitability just as eagerly, just as assiduously, just as faith-
fully, just as responsibly. as the most greedy wheeler-dealer or
as the most convincedly Marxist commissar in Russia.
Second, profit is not the 'entrepreneur's share' and the
'reward' to one 'factor of production'. It does not rank on a par
with the other 'shares', such as that of labour, for instance, but
above them. It is not a claim against the enterprise but the claim
of the enterprise - without which it cannot survive. How the
profits are distributed and to whom is of great political import-
ance; but for the understanding of the needs and behaviour of a
business it is largely irrelevant.
Finally, 'profit maximization' is the wrong concept, whether
it be interpreted to mean short-range or long-range profits or a
balance of the two. The relevant question is, 'What minimum
does the business need?' - not 'What maximum can it make?'
This 'survival minimum' will, incidentally, be found to exceed
present maxima in many cases. This, at least, has been my ex-
perience in most companies where a conscious attempt to think
through the risks of the business has been attempted.
Here are five dimensions. and each of these five is a genuine

view of the whole business enterprise. It is a human organ-
ization, and we can look upon it only in that aspect, as does our
human relations literature. We can look at it from its existence in
society and economy, which is what the economist does. This is
a perfectly valid, but it is a one-sided view.
We can similarly, look at the enterprise only from the point of
view of its goods and services. Innovation and change are yet
another dimension, and profitability is yet another. These are all
genuine true aspects of the same being. But only if we have all
five of them in front of us do we have a theory of business
enterprise on which practice can be built.
For managing a business enterprise means making decisions,
every one of which both depends on needs and opportunities in
each of these five areas and, in turn, affects performance and
results in each.
THE WORK TO BE DONE

The first conclusion from this is that every business needs objec-
tives - explicit or not - in each of these five areas, for mal-
function in anyone of these endangers the entire business. And
failure in anyone area destroys the entire business - no matter
how well it does in the other four areas. Yet these are not inter-
dependent but autonomous areas.
(l) Here, then, is the first task of a discipline of business
enterprise: to develop clear concepts and usable measurements
to set objectives and to measure performance in each of these
five areas.
'The job is certainly a big one - and a long one. There is no
area as yet where we can really define the objectives, let alone
measure results. Even in respect to profitability we have, despite
great recent advances in managerial economics, figures for the
past rather than measurements that relate current or expected
profitability to the specific future risks and needs. In the other
areas we do not even have that, by and large. And in some - the
effectiveness of the human organization, the public standing in
economy and society, or the area of innovation - we may. for a
long time to come, perhaps forever, have to be content with
qualitative appraisal making possible judgment. Even this
would be tremendous progress.
(2) A second conclusion is hardly less important: no one
simple objective is 'the' objective of a business; no one single
yardstick 'the' measure of performances, prospects, and results
of a business; no one single area 'the' most important area.
Indeed, the most dangerous oversimplification of business en-
terprise may well be that of the 'one yardstick', whether return
on investment, market standing, product leadership, or what
have you. At their best these measure performance in one genu-
ine survival area. But malfunction or failure in anyone area is
not counterbalanced by performance in any other area, just as a
sturdy respiratory or circulatory system will not save an animal
if its digestive or nervous system collapses. Success, like failure,
in business enterprise is multidimensional.
(3) This, however, brings out another important need: a
rational and systematic approach to the selection and balance
among objectives so as best to provide for survival and growth
of the enterprise. These can be called the 'ethics' of business
enterprise, in so far as ethics is the discipline that deals with
rational value choices among means to ends. It can also be the
'strategy' of entrepreneurship. Neither ethics nor strategy is
capable of being absolutely determined. yet neither can be ab-
solutely arbitrary. We need a discipline here that encompasses
both the 'typical' decision which adapts to circumstances and
'plays' the averages of statistical probability, and the inno-
vating, 'unique event' of entrepreneurial vision and courage,
breaking with precedent and trends and creating new ones - and
there are already some first beginnings of such a discipline of
entrepreneurship. But such a discipline can never be more than
theory of composition is to the musical composer or theory of
strategy to the military leader: a safeguard against oversight, an
appraisal of risks, and, above all, a stimulant to independence
and innovation.
Almost by definition, the demands of different survival objec-
tives pull in different directions, at least for anyone time period.
And it is axiomatic that the resources even of the wealthiest
business, or even of the richest country, never cover in full all
demands in all areas; there is never so much that there has to be
no allocation. Higher profitability can thus be achieved only by
taking a risk in market standing, in product leadership, or in
tomorrow's human organization, and vice versa. Which of these
risks the enterprise can take, which it cannot take, and which it
cannot afford not to take - these risk-taking value decisions
between goals in one area versus goals in others, and between
goals in one area today versus goals in others tomorrow, is a
specific job of the entrepreneur. This decision itself will remain a
'judgment', that is, a matter of human values, appraisal of the
situation, weighing of alternatives, and balancing of risks. But
an understanding of survival objectives and their requirements
can supply both the rational foundation for the decision itself
and the rational criteria for the analysis and appraisal of en-
trepreneurial performance.
AN OPERATIONAL VIEW OF THE BUDGETING PROCESS
The final conclusion is that we need a new approach to the

process in which we make our value decisions between different
objective areas - the budgeting process. And in particular do we
need a real understanding of that part of the budget that deals
with the expenses that express these decisions, that is, the 'man-
aged' and 'capital' expenditures.
Commonly today, budgeting is conceived as a financial pro-
cess. But it is only the notation that is financial; the decisions are
entrepreneurial. Commonly today, managed expenditures and
capital expenditures are considered quite separate. But the dis-
tinction is an accounting (and tax) fiction and misleading; both
commit scarce resources to an uncertain future; both are, econ-
omically speaking, capital expenditures. And they, too, have to
express the same basic decisions on survival objectives to be
viable. Finally, today, most of our attention in the operating
budget is given, as a rule, to other than the managed expenses,
especially to the variable expenses, for that is where, histori-
cally, most money was spent. But, no matter how large or small
the sums, it is in our decisions on the managed expenses that we
decide on the future of the enterprise.
Indeed, we have little control over what the accountant calls
variable expenses - the expenses which relate directly to units of
production and are fixed by a certain way of doing things. We
can change them, but not fast. We can change a relationship
between units of production and labour costs (which we, with a
certain irony, still consider variable expenses despite the fringe
benefits). But within any time period these expenses can only
be kept at a norm and cannot be changed. This is, of course,
even more true for the expenses in respect to the decisions of the
past, our fixed expenses. We cannot make them undone at all,
whether these are capital expenses or taxes or what have you.
They are beyond our control.
In the middle, however, are the expenses for the future which
express our risk-taking value choices: the capital expenses and
the managed expenses. Here are the expenses on facilities and
equipment, on research and merchandising, on product de-
velopment and people development, on management and organ-
ization. This managed expense budget is the area in which we
really make our decisions on our objectives. (That, incidentally,
is why I dislike accounting ratios in that area so very much,
because they try to substitute the history of the dead past for the
making of the prosperous future.)
We make decisions in this process in two respects. First. what
do we allocate people for? For the money in the budget is really
people. What do we allocate people, and energy. and efforts to?
To what objectives? We have to make choices, as we cannot do
everything.
And, second, what is the time scale? How do we, in other
words, balance expenditures for long-term permanent efforts
against any decision with immediate impact? The one shows
results only in the remote future, if at all. The development of
people (a fifteen-year job), the effectiveness of which is untested
and unmeasurable, is, for instance, a decision on faith over the
long range. The other may show results immediately. To slight
the one, however, might, in the long range, debilitate the
business and weaken it. And, yet, there are certain real short-
term needs that have to be met in the business - in the present as
well as in the future.
Until we develop a clear understanding of basic survival
objectives and some yardsticks for the decisions and choices in
each area, budgeting will not become a rational exercise of re-
sponsible judgment; it will retain some of the hunch character
that it now has. But our experience has shown that the concept
of survival objectives alone can greatly improve both the quality
and effectiveness of the process and the understanding of what
is being decided. Indeed, it gives us, we are learning, an effective
tool for the integration of functional work and specialized
efforts and especially for creating a common understanding
throughout the organization and common measurements of con-
tribution and performance.
The approach to a discipline of business enterprise through
an analysis of survival objectives is still a very new and a very
crude one. Yet it is already proving itself a unifying concept,
simply because it is the first general theory of the business enter-
prise we have had so far. It is not yet a very refined, a very
elegant, let alone a very precise, theory. Any physicist or math-
ematician would say: This is not a theory; this is still only rhet-
oric. But at least, while maybe only in rhetoric, we are talking
about something real. For the first time we are no longer in the
situation in which theory is irrelevant, if not an impediment,
and in which practice has to be untheoretical, which means
cannot be taught, cannot be learned, and cannot be conveyed, as
one can only convey the general.
This should thus be one of the breakthrough areas; and
twenty years hence this might well have become the central con-
cept around which we can organize the mixture of knowledge,
ignorance, and experience, of prejudices, insights, and skills,
which we call 'management' today.
10. The Manager and
the Moron
T HE computers, despite all the excitement they have been

generating, are not yet economically important. It's only now
that IBM is shipping them out at a rate of a thousand a month
that they're even beginning to have an impact. But we haven't
begun to use the potential of the computer. So far we are using it
only for clerical chores, which are unimportant by definition. To
be sure, the computer has created something that had never
existed in the history of the world - namely, paying jobs for
mathematicians. But that is hardly a major economic con-
tribution, no matter what the graduate dean thinks.
So the economic impact of the new tecbnologies is still in the
future. If we subtracted every single one of them from the civi-
lian economy, we would hardly notice it in the figures - perhaps
a percentage point or two.
But this situation of linear movement is rapidly changing in
every respect. And the greatest change is one that an economist,
looking only at the figures, wouldn't even notice: in the past
twenty years we have created a brand-new form of capital, a
brand-new resource, namely, knowledge.
Up until 1900, any society in the world would have done just
as well as it did without men of knowledge. We may have
needed lawyers to defend criminals and doctors to write death
certificates, but the criminals would have done almost as well
without the lawyers. and the patients without the doctors. We
needed teachers to teach other ornaments of society. but this,
First published in The McKinsey Quarterly, Spring 1967.

too, was largely decoration. The world prided itself on men of
knowledge, but it didn't need them to keep the society run-
ning.
As late as the mid-forties, General Motors carefully con-
cealed the fact that one of its three top men, Albert Bradley, had
a Ph.D. It was even concealed that he had gone to college. be-
cause, quite obviously, a respectable man went to work as a
water boy at age fourteen. A Ph.D. was an embarrassing thing
to have around.
Nowadays. companies boast about the Ph.D.'s on their pay-
rolls. Knowledge has become our capital resource, a terribly
expensive one. A man who graduates from a good business
school represents some $100,000 of social investment, not
counting what his parents spent on him. and not counting the
opportunity costs. His grandparents and great-grandparents had
to go to work at the age of twelve or thirteen with the hoe in the
potato patch so that he could forgo those ten years of con·
tribution to society. And that's a tremendous capital invest-
ment.
Besides spending all that money, we are also doing something
very revolutionary. We are applying knowledge to work. Seven-
odd thousand years ago, the first great human revolution took
place when our ancestors first applied skill to work. They did
not use skill to substitute for brawn. The most skilled work very
often requires the greatest physical strength; no ditchdigger
works harder than the surgeon performing a major operation.
Rather, our ancestors put skills on top of physical labour. And
now - a second revolution - we've put knowledge on top of both.
Not as a substitute for skill, but as a whole new dimension. Skill
alone won't do it any more.
Now. this has two or three important implications for man-
agement.
First, we must learn to make knowledge productive. As yet
we don't really know how. The payroll cost of knowledge
workers already amounts to more than half the labour costs of
practically all businesses I know. That represents a tremendous
capital investment in human beings. But so far neither pro·
ductivity trends nor profit margins show much sign of respon-
ding to it. Pretty clearly. although business is paying for
The Manager and the Moron 143
knowledge workers, it isn't getting much back. And if you look
at the way we manage knowledge workers, the reason is obvi-
ous: we don't know how.
One of the few things we do know is that for any knowledge
worker. even for the file clerk, there are two laws. The first one
is that knowledge evaporates unless it's used and augmented.
Skill goes to sleep, it becomes rusty, but it can be restored and
refurbished very quickly. That's not true of knowledge. If
knowledge isn't challenged to grow, it disappears fast. It's
infinitely more perishable than any other resource we have ever
had. The second law is that the only motivation for knowledge is
achievement. Anybody who has ever had a great success is mo-
tivated from then on. It's a taste one never loses. So we do know
a little about how to make knowledge productive.
THE OBSOLESCENCE OF EXPERIENCE
Another implication flows from the creation of this new knowl-

edge resource. The new generation of managers, those now aged
thirty-five or under, is the first generation that thinks in terms of
putting knowledge to work before one has accumulated a dec-
ade or two of experience. Mine was the lost generation of man-
agers who measured their value entirely by experience. All of us,
of necessity, managed by experience - not a good process, be-
cause experience cannot be tested or be taught. Experience must
be experienced; except by a very great artist, it cannot be con-
veyed.
This means that the new generation and my generation are
going to be horribly frustrated working together. They rightly
expect us, their elders and betters, to practise some of the things
that we preach. We don't dream of it. We preach knowledge and
system and order, since we never had them. But we go by experi-
ence, the one thing we do have. We feel frustrated and lost
because, after devoting half our lifetimes to acquiring experi-
ence, we still don't really understand what we're trying to do.
The young are always in the right, because time is on their side.
And that means we have to change.
This brings us to the third implication, a very important one.
Any business that wants to stay ahead will have to put very
young people into very big jobs - and fast. Older men cannot
do these jobs - not because they lack the necessary intelligence,
but because they have the wrong conditioned reflexes. The
young ones stay in school so long they don't have time to ac-
quire the experience we used to consider indispensable for
big jobs. And the age structure of our population is such that
in the next twenty years, like it or not, we are going to have
to promote people we wouldn't have thought old enough, a
few years ago, to find their way to the water cooler. Companies
must learn to stop replacing the sixty-five-year-old man with the
fifty-nine-year-old. They must seek out their good thirty-five-
year-aIds.
For all its importance, however, the appearance of knowl-
edge as a new capital resource is not the most vivid change in
our environment, if only because it does not yet have a visible
impact on the world's economic figures. Probably the most vivid
change is in technology.
Many of the old technologies, of course, still have a lot of life
in them. I think it's quite clear that the automobile, for instance,
has yet to experience its greatest growth period. In the de-
veloped countries, however, it's in a defensive position. I don't
think we need a great deal of imagination to foresee the day
when the private car will be banned in the midtown areas or the
day when the internal combustion engine will be limited to over-
the-road use.
Or consider steel. I think one can quite easily foretell tech-
nological changes that will cut the cost of steel by about 40 per
cent. But whether that's enough to recreate momentum for the
steel industry is debatable. I think that steel would probably
need a greater cost advantage to make it again the universal
material it used to be. Since steel, like all multipurpose ma-
terials, isn't ideal for anyone use, it has to compete on price.
And, as you know, the steel industry has lost 20 per cent of the
markets it had before World War II. It's concrete here, plastic
there, and so on. Whether steel wil110se the automotive body
business to one of the new composition materials in the next ten
years is a moot question. Only a fool would bet on it at this
point, but by the same token only a fool would bet against it. If
it does happen, it's very doubtful whether even a 40 per cent
reduction in cost might be enough to keep steel from joining the
long parade of yesterday's engines of economic growth.
In agriculture, the great need is for an advance in productivity
- but again. not in the developed countries. By now, the agricul-
tural population in the developed countries has shrunk to such a
small percentage of the total that even tripling its productivity
would make little difference in the over-all economic picture.
And so on. I'm not saying that the industries based on old
technologies can't advance. but I am saying they're unlikely to
provide .the impetus we need for continuing expansion. From
now on, I think, the expansion will have to be powered by new
industries based on new technologies, something we have not
seen to any extent since before World War I.
ENTER THE KNOWLEDGE UTILITY

One of the most potentially earth-shaking forces in our econ-
omy is the technology of information. I don't mean simply the
computer. The computer is to information what the electric
power station is to electricity. The power station makes many
other things possible, but it's not where the money is. The
money is in the gimmicks and gizmos, the appliances, the
motors and facilities made possible and necessary by electricity.
that didn't exist before.
Information, like electricity, is energy. Just as electrical en-
ergy is energy for mechanical tasks, information is energy for
mental tasks. The computer is the central power station, but
there are also the electronic-transmission facilities - the sat-
ellites and related devices. We have devices to translate the en-
ergy, to convert the information. We have the display capacity
of the television tube, the capability to translate arithmetic into
geometry. to convert from binary numbers into curves. We can
go from computer core to memory display, and from either one
into hard copy. All the pieces of the information system are
here. Technically, there is no reason why Sears, Roebuck could
not offer tomorrow, for the price of a television set, a plug-in
appliance that would put us in direct contact with all the infor-
mation needed for schoolwork from kindergarten through col-
lege.
Already the time-sharing principle has begun to take hold. I
don't think it takes too much imagination to see that a typical
large company is about as likely to have its own computer twen-
ty years hence as it is to have its own steam-generating plant
today. It is reasonably predictable that computers will become a
common carrier, a public utility, and that only organiza-
tions with quite extraordinary needs will have their own. Steel
mills today have their own generators because they need such an
enormous emount of power. Twenty years hence, an institution
that's the equivalent of a steel mill in terms of mental work -
MIT, for example - might well have its own computer. But I
think most other universities, for most purposes, will simply
plug into time-sharing systems.
It would be silly to try to predict in detail the effects of any
development as big as this. All one can foresee for certain is a
great change in the situation. One cannot predict what it will
lead to, and where and when and how. A change as tremendous
as this doesn't just satisfy existing wants, or replace things we
are now doing. It creates new wants and makes new things
possible.
A NEW AGE OF INFORMATION
The impact of information, however, should be greater than

that of electricity, for a very simple reason. Before electricity,
we had power; we had energy. It was very expensive and rather
scarce, but we had it. Before now, however, we have not had
information. Information has been unbelievably expensive, al-
most totally unreliable, and always so late that it was of little if
any value. Most of us who had to work with information in the
past, therefore, knew we had to invent our own. One developed,
if one had any sense, a reasonably good instinct for what inven-
tion was plausible and likely to fly, and what wasn't. But real
information just wasn't to be had. Now. for the first time. it's
beginning to be available - and the over-all impact on society is
bound to be very great.
Without attempting to predict the precise nature and timing
of this impact, I think we can safely make a few assumptions.
ASSUMPTION ONE: Within the next ten years, information
will become very much cheaper. An hour of computer time
today costs several hundred dollars at a minimum; I have seen
figures that put the cost at about a dollar an hour in 1973 or so.
Maybe it won't come down that steeply, but come down it
will.
ASSUMPTION TWO: The present imbalance between the ca-

pacity to compute and store information and the capacity to use
it will be remedied. We will spend more and more money on
producing the things that make a computer usable - the soft-
ware, the programs, the terminals, and so on. The customers
aren't going to be content just to have the computer sitting
there.
ASSUMPTION THREE: The kindergarten stage is over. We're

past the time when everybody was terribly impressed by the
computer's ability to do two plus two in fractions of a nano-
second. We're also past the stage of trying to find work for the
computer by putting all the unimportant things on it - using it as
a very expensive clerk. Actually, nobody has yet saved a penny
that way, as far as I can tell. Clerical work - unless it's a tre-
mendous job, such as addressing seven-million copies of Life
magazine every week - is not really done very cheaply on the
computer. But then, kindergartens are never cheap.
Now we can begin to use the computer for the things it should
be used for - information, control of manufacturing processes,
control of inventory, shipments, and deliveries. I'm not saying
we shouldn't be using the computer for payrolls, but that's be-
side the point. If payrolls were all it could do, we wouldn't be
interested in it.
MANAGING THE MORON

We are beginning to realize that the computer makes no de-
cisions; it only carries out orders. It's a total moron, and therein
lies its strength. It forces us to think, to set the criteria. The
stupider the tool, the brighter the master has to be - and this is
the dumbest tool we have ever had. All it can do is say either
zero or one, but it can do that awfully fast. It doesn't get tired
and it doesn't charge overtime. It extends our capacity more
than any tool we have had for a long time, because of all the
really unskilled jobs it can do. By taking over these jobs,it allows
us - in fact, it compels us - to think through what we are do-
ing.
But though it can't make decisions, the computer will- if we
use it intelligently - increase the availability of information.
And that will radically change the organization structure of
business - of all institutions, in fact. Up to now we have been
organizing, not according to the logic of the work to be done,
but according to the absence of information. Whole organ-
ization levels have existed simply to provide standby trans-
mission facilities for the breakdowns in information flow that
one could always take for granted. Now these redundancies are
no longer needed. We mustn't allow organizational structure to
be made more complicated by the computer. If the computer
doesn't enable us to simplify our organizations, it's being
abused.
Along with vastly increasing the availability of information,
the computer will reduce the sheer volume of data that man-
agers have had to cope with. At present the computer is the
greatest possible obstacle to management information, because
everybody has been using it to produce tons of paper. Now.
psychology tells us that the one sure way to shut off all per-
ception is to flood the senses with stimuli. That's why the man-
ager with reams of computer output on his desk is hopelessly
uninformed. That's why it's so important to exploit the com-
puter's ability to give us only the information we want - nothing
else. The question we must ask is not, 'How many figures can I
get?' but 'What figures do I need? In what form? When and
how?' We must refuse to look at anything else. We no longer
have to take figures that mean nothing to us and read them the
way a gipsy reads tea leaves.
Instead, we must decide on our information needs and how
the computer can fill those needs. To do that, we must under-
stand our operating processes, and the principles behind the
processes. We must apply knowledge and analysis to them, and
convert them to a clerk's routine. Even a work of genius.
thought through and systematized, becomes a routine. Once it
has been created, a shipping clerk can do it - or a computer can
do it. So, once we have achieved real understanding of what we
are doing, we can define our needs and program the computer to
fill them.
BEYOND THE NUMBERS BARRIER
We must realize, however, that we cannot put in the computer

what we cannot quantify. And we cannot quantify what we can-
not define. Many of the important things, the subjective things,
are in this category. To know something, to really understand
something important, one must look at it from sixteen different
angles. People are perceptually slow, and there is no shortcut to
understanding; it takes a great deal of time. Managers today
cannot take the time to understand, because they don't have it.
They are too busy working on things they can quantify - things
they could put in a computer.
This is why the manager should use the computer to control
the routines of business, so that he himself can spend ten
minutes a day controIling instead of five hours. Then he can use
the rest of his time to think about the important things he cannot
really know - people and environment. These are things he
cannot define; he has to take the time to go and look. The
failure to go out and look is what accounts for most of our
managerial mistakes today.
Our greatest managerial failure rate comes in the step from
middle to top management. Most middle managers are doing
essentially the same things they did on their entrance jobs: con-
trolling operations and fighting fires. In contrast, the top man-
ager's primary function is to think. The criteria for success at
the top level bear little resemblance to the criteria for promotion
from middle management.
The new top manager, typically, has been promoted on the
basis of his ability to adapt successfully. But suddenly he's so
far away from the firing line that he doesn't know what to adapt
to - so he fails. He may be an able man, but nothing in his work
experience has prepared him to think. He hasn't the foggiest
notion how one goes about making entrepreneurial or policy
decisions. That's why the failure rate at the senior-management
level is so high. In my experience, two out of three men pro-
moted to top management don't make it; they stay middle man·
agement. They aren't necessarily fired. Instead, they get put on
the Executive Committee with a bigger office, a bigger title, a
bigger salary - and a higher nuisance value because they have
had no exposure to thinking. This is a situation we are going to
eliminate.
On the other hand, we are going to open up a new problem of
development at the middle-management level. It isn't difficult
for us to get people into middle management today. But it is
going to be, because we shall need thinking people in the middle,
not just at the top. The point at which we teach people to think
will have to be moved further and further down the line. We can
already see this problem in the big commercial banks.
We will have to manage knowledge correctly in order to pre-
serve it. And this gets us into myriad questions of teaching and
learning, of developing knowledge and techniques of thinking-
not only in the developed nations, but in countries that are yet
unaware of the distinction between management-by-experience
and management-by-thinking, countries that are unaware of
management itself. But that is another subject.
11. The Technological
Revolution: Notes on
the Relationship of
Technology, Science,
and Culture
THE standard answer to the question. 'What brought about

the explosive change in the human condition these last two hun-
dred years?' is 'The Progress of Science.' This paper enters a
demurrer. It argues that the right answer is more likely: 'A fun-
damental change in the concept of technology.' Central to this
was the re-ordering of old technologies into systematic public
disciplines with their own conceptual equipment. e.g. the
'differential diagnosis' of nineteenth-century medicine. In the
century between 1750 and 1850 the three main technologies of
Man - Agriculture, the Mechanical Arts (today's Engineering).
and Medicine - went in rapid succession through this process,
which resulted almost immediately in an agricultural, an indus-
trial, and a medical 'revolution' respectively.
This process owed little or nothing to the new knowledge of
contemporary science. In fact, in every technology the practice
with its rules of thumb was far ahead of science. Technology,
therefore. became the spur to science; it took, for instance, sev-
enty-five years until Clausius and Kelvin could give a scientific
formulation to the thermodynamic behaviour of Watt's steam
First published in Technology and Culture. Fall 1961.
R-F
engine. Science could, indeed, have had no impact on the Tech~
nological Revolution until the transformation from craft to tech-
nological discipline had first been completed.
Dut technology had an immediate impact on science, which
was transformed by the emergence of systematic technology.
The change was the most fundamental one - a change in
science's own definition and image of itself. From being 'natural
phiiosophy', science became a social institution. The words in
which science defined itself remained unchanged: 'the sys-
tematic search for rational knowledge'. But 'knowledge'
changed its meaning from being 'understanding', i.e. focused on
man's mind, to being 'control', Le. focused on application in
and through technology. Instead of raising, as science had al-
ways done, fundamental problems of metaphysics. it came to
rruse, as it rarely had before, fundamental social and political
problems.
It would be claiming too much to say that technology estab-
lished itself as the paramount power over science. But it was
technology that built the future home, took out the marriage
licence, and hurried a rather reluctant science through the cer-
emony. And it is technology that gives the union of the two its
character; it is a coupling of science to technology, rather than a
coupling of science and technology.
The evidence indicates that the key to this change lies in new
basic concepts regarding technology. that is, in a genuine Tech-
nological Revolution with its own causes and its own dy-
namics.
Of all major technologies medicine alone has been taught

systematically for any length of time. An unbroken line leads
back for one thousand years, from the medical school of today
to the medical schools of the Arab caliphates. The trail, though
partly overgrown, goes back, another fourteen hundred years,
through the School of Alexandria to Hippocrates. From the
beginning, medical schools taught both theoretical knowledge
and clinical practice. engaged simultaneously, therefore. in
science and technology. Unlike any other technologist in the
West, the medical practitioner has continuously enjoyed social
esteem and position.
The Technological Revolution 153
Yet, until very late - 1850 or thereabouts - there was no
organized or predictable relationship between scientific knowl-
edge and medical practice. The one major contribution to health
care which the West made in the Middle Ages was the invention
of spectacles. The generally accepted date is 1286; by 1290 the
use of eyeglasses is fully documented. * This invention was, al-
most certainly, based directly upon brand-new scientific knowl-
edge, most probably on Roger Bacon's optical experiments. Yet
Bacon was still alive when spectacles came in - he died in 1294.
Until the nineteenth century there is no other example of such
all but instantaneous translation of new scientific knowledge
into technology -least of all in medicine. Yet Galen's theory of
vision, which ruled out any mechanical correction, was taught in
the medical schools until 1700. t
Four hundred years later, in the age of Galileo, medicine
took another big step - Harvey's discovery of the circulation of
the blood, the first major new knowledge since the ancients.
Another hundred years, and Jenner's smallpox vaccination
brought both the first specific treatment and the first prevention
of a major disease.
Harvey's [mdings disproved every single one of the theoreti-
cal assumptions that underlay the old clinical practice of bleed-
ing. By 1700 Harvey's findings were taught in every medical
school and repeated in every medical text. Yet bleeding re-
mained the core of medical practice and a universal panacea for
another hundred years, and was still applied liberally around
1850.t What killed it finally was not scientific knowledge -
available and accepted for two hundred years - but clinical
observation.
* E. Rosen, 'The Invention of Eyeglasses', Journal for the History of Medi-

cine, vol. 11 (1956), pp. 13-46. 183-218.
t It was among the great Boerhaave's many 'firsts' to have taught the first
course in ophthahnology and to examine actual eyes - in 1708 in Leyden.
Newton's Optics was the acknowledged inspiration. (See George Sarton, 'The
History of Medicine versus the History of Art', Bulletin of the History of
Medicine, vol. 10 (1941), pp. 123-35.)
t Bleeding actually reached a peak in the 1820s. when it was touted as the
universal remedy by no less an authority than Broussais, the most famous
professor at the Paris Academy of Medicine. According to Henry E. Sigrist
(Great Doctors; London: Allen and Unwin, 1933). it became so popular that
in the one year, 1827. 33 million leeches were imported into France.
In contrast to Harvey, Jenner's achievement was essentially
technological and without any basis in theory. It is perhaps the
greatest feat of clinical observation. Smallpox vaccination had
hard sledding - it was, after all, a foolhardy thing deliberately to
give oneself the dreaded pox. But what no one seemed to pay
any attention to was the complete incompatibility of Jenner's
treatment with any biological or medical theory of the time, or
of any time thereafter until Pasteur. one hundred years later.
That no one, apparently, saw fit to try explaining vaccination or
to study the phenomenon of immunity appears to us strange
enough. But how can one explain that the same doctors who
practised vaccination, for a century continued to teach theories
which vaccination had rendered absurd?
The only explanation is that science and technology were not
seen as having anything to do with one another. To us it is
commonplace that scientific knowledge is being translated into
technology, and vice versa. This assumption explains the viol-
ence of the arguments regarding the historical relationship be-
tween science and the 'useful arts'. But the assumptions of the
debate are invalid: the presence of a tie proves as little as its
absence - it is our age, not the past. which presumes consistency
between theory and practice.
The basic difference was not in the content but in the focus of
the two areas. Science was a branch of philosophy, concerned
with understanding. Its object was to elevate the human mind. It
was misuse and degradation of science to use it - Plato's famous
argument. Technology. on the other hand, was focused on use.
Its object was increase of the human capacity to do. Science
dealt with most general. technologies with the most concrete.
Any resemblances between the two were 'purely coincidental'.*
• There was, to be sure, one famous dissent, one important and highly
effective approach to science as a means to doing and as a foundation for
technology. Its greatest spokesman was St. Bonaventura, the thirteenth-cen-
tury antiphonist to St. Thomas Aquinas (see especially St. Bonaventura's
Reduction of all Arts to Theology). A hundred years earlier the dissenters
actually dominated in the twelfth-century Platonism of the the-
ologian-technologist schools of St. Victoire and Chartres, builders alike ot
mysticism and of the great cathedrals. On this see Charles Homer Haskins,
The Renaissance of the Twelfth Century (Cambridge, Mass.: Harvard Uni-
versity Press, 1927); Otto von Simson, The Gothic Cathedral (London: Rout-
ledge and Kegan Paul, 1956); and Abbot Suger on the Abbey Church of St.-
There are no hard and fast dates for a major change in an
attitude. a world view. And the Technological Revolution was
nothing less. We do know, however, that it occurred within the
half century 1720 to 1770 - the half century that separates New-
ton from Benjamin Franklin.
Few people today realize that Swift's famous encomium on
the man who makes two blades grow where one grew before,
was not in praise of the scientist. On the contrary. it was the
final, crushing argument in a biting attack on them. and es-
pecially against the august Royal Society. It was meant to extol
the sanity and benefits of nonscientific technology against the
arrogant sterility of an idle inquiry into nature concerned with
understanding; this is against Newtonian Science. for Swift was,
as always, on the unpopular side. But his basic assumption -
that science and application were radically different and worlds
apart - was clearly the prevailing one in the opening decades of
the eighteenth century. No one scientist spoke out against the
weirdest technological 'projects' of the South Sea Bubble of
1720, even though their theoretical infeasibility must have been
obvious to them. Many, Sir Isaac Newton taking the lead, inves-
ted heavily in them.* And while Newton. as Master of the Royal
Mint, reformed its business practices, he did not much bother
with its technology.
Denis and its Art Treasures, edited by Erwin Panofsky (princeton, 1946).
The dissenters did not, of course, see material technology as the end of
knowledge; rational knowledge was a means towards the knowledge of God
or at least His glorification. But knowledge, once its purpose was application,
immediately focused on material technology and purely wordly ends - as St.
Bernard pointed out in his famous attack on Suger's 'technocracy' as early as
1127.
The dissent never died down completely. But after the Aristotelian triumph
of the thirteenth century, it did not again become respectable, let alone domi-
nant until the advent of Romantic Natural Philosophy in the early nineteenth
century, well after the Technological Revolution and actually its first (and so
far only) literary offspring. It is well known that there was the closest con-
nection between the Romantics - with Novalis their greatest poet, and with
Schelling their official philosopher - and the first major discipline which, from
its inception, was always both science and technology: organic chemistry. Less
well known is the fact that the Romantic movement, its philosophers,
writers, and statesmen came largely out of the first Technical University, The
Mining Academy in Freiberg (Saxony) that had been founded in 1776.
,.. J. Carswell, The South Sea Bubble (London: Cresset Press, 1960).
1S6 Technology, Management, and Society
Fifty years later, around 1770, Dr. Franklin is the 'phil-
osopher' par excellence and the West's scientific lion. Franklin,
though a first-rate scientist, owed his fame to his achievements
as a technologist - 'artisan' in eighteenth-century parlance. He
was a brilliant gadgeteer, as witness the Franklin stove and
bifocals. Of his major scientific exploits, one - the investigation
of atmospheric electricity - was immediately turned into useful
application: the lightning rod. Another, his pioneering work in
oceanography with its discovery of the Gulf Stream, was under-
taken for the express purpose of application, viz. to speed up the
transatlantic mail service. Yet the scientists hailed Franklin as
enthusiastically as did the general public.
In the fifty years between 1720 and 1770 - not a particularly
distinguished period in the history of science, by the way - a
fundamental change in the attitude towards technology, both of
laity and of scientists, must have taken place. One indication is
the change in English attitude towards patents. During the
South Sea Bubble they were still unpopular and attacked as
'monopolies'. They were still given to political favourites rather
than to an inventor. By 1775 when Watt obtained his patent,
they had become the accepted means of encouraging and re-
warding technological progress.
We know in detail what happened to technology in the period
which includes both the Agricultural Revolution and the open-
ing of the Industrial Revolution. Technology as we know it
today, that is. systematic, organized work on the material tools
of man, was born then. It was produced by collecting and organ-
izing existing knowledge, by applying it systematically, and by
publishing it. Of these steps the last one was both the most novel
- craft skill was not for nothing cal1ed a 'mystery' - and the
most important.
The immediate effect of the emergence of technology was not
only rapid technological progress: it was the establishment of
technologies as systematic disciplines to be taught and 1earned
and, finally, the reorientation of science towards feeding these
new disciplines of technological application.
Agriculture* and the mechanical artst changed at the same
time, though independently.
... G. E. Fussell, The Farmers Tools, 1500-1900 (London, 1952);
BegLrming with such men as Jethro Tull and his systematic
work on horse-drawn cultivating machines in the early years of
the seventeenth century and culminating towards its end in
Coke of Holkham's work on balanced large-scale farming and
selective livestock breeding, agriculture changed from a 'way of
life' into an industry. Yet this work would have had little impact
but for the systematic publication of the new approach, es-
pecially by Arthur Young. This assured both rapid adoption
and continuing further work. As a result, yields doubled while
manpower needs were cut in half - which alone made possible
that large-scale shift of labour from the land into the city and
from producing food to consuming food on which the Industrial
Revolution depended.
Around 1780. Albrecht Thaer in Germany, an enthusiastic
follower of the English. founded the first agricultural college - a
college not of 'farming' but of 'agriculture'. This in turn, still in
Thaer's lifetime, produced the first, specifically application-
focused new knowledge, namely, Liebig's work on the nutrition
of plants, and the first science-based industry, fertilizer.
The conversion of the mechanical arts into a technology fol-
lowed the same sequence and a similar time table. The hundred
years between the 1714 offer of the famous £20,000 prize for a
reliable chronometer and Eli Whitney's standardization of parts
was, of course, the great age of mechanical invention - of the
machine tools, of the prime movers, and of industrial organ-
ization. Technical training, though not yet in systematic form,
began with the founding of the Ecole des Pontes et Chaussees in
1747. Codification and pUblication in organized form goes back
to Diderot's Encyclopedie, the first volume of which appeared
A. J. Bourde, The Influence of England on the French Agronomes (Cam-

bridge, 1953); A. Demolon, L'Evolution Scientifique e! l'Agriculture Fran-
t;aise (Paris, 1946); R. Krzymowski; Geschichte der deutschen Landwirtschaft
(Stuttgart, 1939).
t A. P. Usher, History of Mechanical Inventions (Rev. Ed., Cambridge,
Mass., 1954); also the same author's 'Machines & Mechanisms' in Vol. III of
Singer, et af., A History of Technology (Oxford, 1957); J. W. Roe, English
and American Tool Builders (London, 1916); K. R. Gilbreth, 'Machine
Tools', in History of Technology, VoL IV (Oxford, 1958); on early tech-
nical education see: Franz Schnabel, Die Anfaenge des Technischen Hoch-
schulwescns (Freiburg, 1925).
in 1750. In 1776 - that miracle year that brought the Declaration
of Independence. The Wealth of Nations, Blackstone's Com~
mentaries, and Watt's first practical steam engine - the first
modern technical university opened: the Bergakademie (Mining
Academy) in Freiberg, Saxony. Significantly enough. one of the
reasons for its establishment was the need for technically
trained managers created by the increasing use of the New~
cornen steam engine. especially in deep-level coal mining.
In 1794. with the establishment of the Ecole Polytechnique in
Paris, the profession of engineer was established. And again,
within a generation. we see a reorientation of the physical scien-
ces - organic chemistry and electricity begin their scientific
career. being simultaneously sciem.;es and technologies. Liebig,
Woehler. Faraday, Henry, Maxwell were great scientists whose
work was quickly applied by great inventors, designers, and
industrial developers.
Only medicine, of the major technologies, did not make the
transition in the eighteenth century. The attempt was made -
by the Dutchman Gerhard van Swieten, * not only a great phys-
ician but politically powerful as adviser to the Habsburg Court.
Van Swieten attempted to marry the clinical practice which his
teacher Boerhaave had started at Leyden around 1700 with th.e
new scientific methods of such men as the Paduan Morgagru
whose Pathological Anatomyt (761) first treated diseases as
atllictions of an organ rather than as 'humours'. But - a lesson
one should not forget - the very fact that medicine (or rather,
something by that name) was already respectable and organized
as an academic faculty defeated the attempt Vienna relapsed
into medical scholasticism as soon as van Swieten and his
hacker, the Emperor Joseph n, died.
It was only after the French Revolution had abolished an
medical schools and medical societies that a real change could
01< The standard biography of van Swieten is W. MuelJer, Gerhard van
Swieten (Vienna, 1883); on the organized l'esistance of academic medicine to

the scientific approach, see G. Strakosch-Grassmann, Geschichte des oes-
terreichischen Unterrichtswesens (Vienna. 1905).
t This is the name commonly used fol' the work. Its actual title was De
Sedibus et causis morborum per anatomen indigatis; the first English trans-
lation appeared in 1769 under the title, The Seats and Causes of Diseases
investigated by Anatomy.
be effected. Then another court physician, Corvisart, Nap-
oleon's doctor, accomplished, in Paris around 1820, what van
Swieten had failed in. Even then, opposition to the scientific
approach remained powerful enough to drive Semmelweis out
of Vienna and into exile when he found, around 1840, that tra-
ditional medical practices were responsible for lying-in fever
with its ghastly death toll. Not until 18 50, with the emergence of
the modern medical school in Paris, Vienna, and Wuel'zburg,
did medicine become a genuine technology and an organized
discipline.
This, too, happened, however, without benefit of science.
What was codified and organized was primarily old knowledge.
acquired in practice. Immediately after the reorientation of the
practice of medicine, the great medical scientists appeared -
Claude Bernard, Pasteur, Lister, Koch. And they were all appli~
cation-focused, all driven by a desire to do, rather than by a
desire to know.
We know the results of the Technological Revolution, and its
impacts. We know that, contrary to Malthus, food supply in the
last two hundred years has risen a good deal more than an
exploding human popUlation. We know that the average life-
span of man a hundred and fifty years ago was still close to the
'natural life-span': the twenty-five years or so needed for the
physical reproduction of the species. In the most highly de-
veloped and prosperous areas, it has almost tripled. And we
know the transformation of our lives through the mechanical
technologies, their potential, and their dangers.
Most of us also know that the Technological Revolution has
resulted in something even more unprecedented: a common
world civilization. It is corroding and dissolving history, tra-
dition, culture. and values throughout the world, no matter how
old, how highly developed, how deeply cherished and loved.
And underlying this is a change in the meaning and nature of
knowledge and of our attitude to it. Perhaps one way of saying
this is that the non-Western world does not want Western
science primarily because it wants better understanding. It
wants Western science because it wants technology and its
fruits. It wants control, not understanding. The story of Japan's
Wesiernization between 1867 and her emergence as a modern
nation in the Chinese War of 1894 is the classical, as it is the
earliest. example.*
But this means that the Technological Revolution endowed
technology with a power which none of the 'useful arts' -
whether agricultural, mechanical, or medical - had ever had
before: impact on man's mind. Previously. the useful arts had to
do only with how man lives and dies, how he works, plays. eats,
and fights. How and what he thinks. how he sees the world and
himse1f in it, his beliefs and values, lay elsewhere - in religion, in
philosophy, in the arts, in science. To use technological means
to affect these areas was traditionally 'magic' - considered at
least evil, if not asinine to boot.
With the Technological Revolution, however, application
and cognition, matter and the mind. tool and purpose, knowl-
edge and control have come together for better or worse.
There is only one thing we do not know about the Tech-

nological Revolution - but it is essential: what happened to
bring about the basic change in attitudes, beliefs, and values
which released it? Scientific progress, I have tried to show, had
little to do with it. But how responsible was the great change in
world outlook which, a century earlier, had brought about the
great Scientific Revolution? What part did the rising capitalism
play? And what was the part of the new, centra~d national
state with its mercantilistic policies on trade and industry and its
bureaucratic obsession with written, systematic, rational pro-
cedures everywhere? (After all, the eighteenth century codified
the laws as it codified the useful or applied arts.) Or do we have
to do here with a process, the dynamics of which lie in tech-
nology? Is it the 'progress of technology' which piled up to the
point when it suddenly turned things upside down, so that the
'control' which nature had always exercised over man now be-
came. at least potentially, control which man exercises over
nature?
This should be, I submit, a central question both for the gen-
eral historian and for the historian of technology.
* This is brought out most clearly in William Lockwood, The Economic
Development of Japan, 1868-1938 (Princeton: University Press, 1954).
The Techtwlogical Revolution 161
For the first, the Technological Revolution marks one of the
great turning points - whether intellectually, politically, cul-
turally, or economically. In all four areas the traditional - and
always unsuccessful - drives of systems, powers, and religions
for world domination are replaced by a new and highly success-
ful world-imperialism, that of technology. Within a hundred
years, it penetrates everywhere and puts, by 1900, the symbol of
its sovereignty, the steam engine, even into the Dalai Lama's
palace in Lhasa.
For the historian of technology, the Technological Revol-
ution is not only the cataclysmic event within his chosen field; it
is the point at which such a field as technology emerges. Up to
that point there is, of course, a long and exciting history of crafts
and tools, artifacts and mechanical ingenuity, slow, painful ad-
vances and sudden. rapid diffusion. But only the historian,
endowed with hindsight, sees this as technology, and as be-
longing together. To contemporaries, these were separate
things, each belonging to its own sphere, application, and way
of life.
Neither the general historian nor the historian of technology
has yet, however, concerned himself much with the Tech-
nological Revolution. The fust - if he sees it at all- dismisses
technology as the bastard child of science. The only general
historian of the first rank (excepting only that keen connoisseur
of techniques and tools, Herodotus) who devotes time and atten-
tion to technology, its role and impact is, to my knowledge,
Franz Schnabel.* That Schnabel taught history at a technical
university <Karlsruhe) may explain his interest. The historians
of technology, for their part, tend to be historians of materials,
tools, and techniques rather than historians of technology. The
rare exceptions tend to be llontechnologists such as Lewis
Mumford or Roger Burlingame who, understandably, are con-
cerned more with the impact of technology on society and cul-
ture than with the development and dynamics of technology
itself.
Yet technology is important today precisely because it unites
* Franz Schnabel, Deutsche Geschichte im 19. lahrhundert (4 vols., Frei-
burg i.B., 1929-1937); the discussion of technology and medicine is found
chiefly in Vol. m.
162 Technology, Managernent, and Society
both the universe of doing and that of knowing, connects both
the intellectual and the natural histories of man. How it came
thus to be in the centre - when it always before had been scat-
tered around the periphery - has yet to be probed, thought
through, and reported.
12& Can Management
Ever Be a Science?
SOME time ago I was asked by one of the management associ-

ations to make a speech on 'Management Science in Business
Planning'. I used this invitation to do something I had long
intended to do, which was to scan the last four or five years of
literature in the areas of management science: operational re-
search; statistical theory and statistical decision making; sys-
tems theory, cybernetics. data processing, and information
theory; econometrics, management accounting, and accounting
theory; and so on. I also looked fairly closely at the management
science work done in a number of businesses, either by their
own staffs or by outside consultants.
No one, I am convinced. can read this literature or can survey
the work done without being impressed by the potential and
promise of management science. To be sure, managing will al-
ways remain somewhat of an art; the talent, experience. vision,
courage, and character, of the managers will always be major
factors in their performance and in that of their enterprises. But
this is true of medicine and doctors. too. And, as with medicine,
management and managers - especially the most highly en-
dowed and most highly accomplished managers - will become
the more effective as their foundation of organized systematic
knowledge and organized systematic search grows stronger, and
as their roots in a real discipline of management and en-
trepreneurship grow deeper. That such a discipline is possible,
the work akeady done in management science proves.
An address delivered at the Fiftieth Anniversary Conference of the Har-
vard Business School, September 1958.
But no one, I am also convinced, can survey the work to date
without being worried at the same time. The potential is there -
but it is in danger of being frittered away. Instead of a manage-
ment science which supplies knowledge. concepts. and
discipline to manager and entrepreneur. we may be developing a
management gadget bag of techniques for the efficiency ex-
pert.
The bulk of the work today concerns itself with the sharp-
ening of already existing tools of specific technical functions -
such as quality control or inventory control warehouse location
or freight-car allocation, machine loading. maintenance sched-
uling. or order handling. And. in fact, a good deal of the work is
little more than a refinement of industrial engineering. cost ac-
counting. or procedures analysis. Some. though not very much,
attention is given to the analysis and improvement of functional
efforts - primarily those of the manufacturing function but also.
to some extent, of marketing and of money management.
But there is almost no work, no organized thought. no em-
phasis on managing an enterprise - on the risk-making, risk-
taking, decision-making job. In fact. I could find only two
examples of such work: the industrial dynamics programme at
Massachusetts Institute of Technology* and the operational re-
search and synthesis work done in some parts of the General
Electric Company. Throughout management science - in the
literature as well as in the work in progress - the emphasis is on
techniques rather than on principles, on mechanics rather than
on decisions. on tools rather than on results, and. above all, on
efficiency of the part rather than on performance of the
whole.
However, if there is one fundamental insight underlying all
management science, it is that the business enterprise is a system
of the highest order: a system the 'parts' of which are human
beings contributing voluntarily of their knowledge, skill, and
dedication to a joint venture. t And one thing characterizes all
• See Jay W. Forrester, 'Industrial Dynamics: A Major Breakthrough for

Decision Makers', Harvard Business Review, July-August 1958, p. 37.
t See Kenneth E. Boulding, 'General Systems Theory', Management
Science, April 1956, p. 197.
Can Management Ever Be a Science? 165
genuine systems, whether they be mechanical like the control of
a missile, biological like a tree, or social like the business enter-
prise: it is interdependence. The whole of a system is not necess-
arily improved if one particular function or part is improved or
made more efficient. In fact, the system may well be damaged
thereby. or even destroyed. In some cases the best way to streng-
then the system may be to weaken a part - to make it less precise
or less efficient. For what matters in any system is the per-
fonnance of the whole; this is the result of growth and of dy-
narr.ic balance, adjustment, and integration rather than of mere
tech."'1ical efficiency.
Primary emphasis on the efficiency of parts in management
science is, therefore, bound to do damage. It is bound to opti-
mize precision of the tool at the expense of the health and per-
formance of the whole. (That the enterprise is a social rather
than a mechanical system makes the danger all the greater, for
the other parts do not stand still. They either respond so as to
spread the maladjustment throughout the system or organize for
sabotage.)
This is hardly a hypothetical danger. The literature abounds
in actual examples - inventory controls that improve pn}-
duction runs and cut down working capital but fail to consider
the delivery expectations of the customer and the market risks
of the business; machine-loading schedules that overlook the
impact of the operations of one department on the rest of the
plant; forecasts that assume the company's competitors will just
stand still; and so on.
Technically this is all excellent work. But therein lies its
danger. The new tools are so much more powerful than the old
tools of technical and functional work - the tools of trial and
error and of cut and fit - that their wrong or careless use must do
damage.
For management science to become a gadget bag, therefore,
not only means a missed opportunity; it may also mean loss of
its potential to contribute altogether, if not its degeneration into
a mischief maker.
Hence the questions arise: Is it inevitable that management

science become a gadget bag? Or would this be the result of
something management science does today or fails to do? And
what would be the requirements for a real management science
that supplies the knowledge and the methodology we need?
The first clue lies, perhaps, in the origin of this new 'manage-
ment science' approach - and the origin is an unusual one in-
deed.
Every other discipline of man began with a crude attempt to
define what its subject was. Then people set to work fashioning
concepts and tools for its study. But management science began
with the application of concepts and tools developed within a
host of other disciplines for their own particular purposes. It
may have started with the heady discovery that certain math-
ematical techniques, hitherto applied to the study of the physi-
cal universe, could also be applied to the study of business
operations.
As a result, the focus of much of the work in management
science has not been on such questions as: 'What is the business
enterprise? What is managing? What do the two do, and what
do the two need?' Rather, the focus has been on: 'Where can I
apply my beautiful gimmick?' The emphasis has been on the
hammer rather than on driving in the nail, let alone on building
the house. In the literature of operational research, for instance,
there are several dissertations along the lines of '155 appli-
cations of linear programming'. but I have not seen any pub-
lished study on 'typical business opportunities and their
characteristics'.
What this indicates is a serious misunderstanding on the part
of the management scientist of what 'scientific' means.
'Scientific' is not - as many management scientists naively seem
to think - synonymous with quantification. If this were true,
astrology would be the queen of the sciences. It is not even the
application of the 'scientific method'. After all, astrologers ob-
serve phenomena, derive the generalization of a hypothesis
therefrom, and then test the hypothesis by further organized
observation. Yet astrology is superstition rather than science
because of its childish assumption that there is a real zodiac,
that the signs in it really exist, and that their fancied re-
semblance to some such earthly creature as a fish or a lion
defines their character and properties (whereas all of them are
nothing but the mnemonic devices of the navigators of anti-
quity).
In other words 'scientific' presupposes a rational definition
of the universe of the science (that is, of the phenomena which it
considers to be real and meaningful) as well as the formulation
of basic assumptions or postulates which are appropriate, con-
sistent, and comprehensive. This job of defining the universe of
a science and of setting its basic postulates has to be done,
however crudely, before the scientific method can be applied. If
it is not done. or done wrongly. the scientific method cannot be
applied. If it is done, and done right, the scientific method be-
comes applicable and, indeed, powerful.
This idea is, of course, nothing new. It goes back to the dis-
tinction between the premises that are generally valid and those
that pertain to a specific discipline, made in Aristotle's Anal-
ytica Posteriora. On the rediscovery of this principle during the
last century rests the power of modern science and of its
methods.*
Management science still has to do this job of defining its

universe. If it does this, then all the work done so far will become
fruitful - at least as preparation and training ground for real
achievement. The first task for management science, if it is to be
able to contribute rather than distort and mislead, is, therefore.
to define the specific nature of its subject matter. This might
include as a basic definition the insight that the business enter-
prise is a system made up of human beings. The assumptions.
opinions. objectives. and even the errors of people (and especi-
ally of managers) are thus primary facts for the management
scientists. Any effective work in management science really has
to begin with analysis and study of them.
Starting, then, with this recognition of what there is to be
studied, management science must next establish its basic as-
sumptions and postulates - without which no science can de.-
velop proper methods. It might first include the vital fact that
every business enterprise exists in economy and society; that
• For a statement of the modem position, see Howard Eves and Carroll
V. Newsom, An Introduction to Foundations and Fundamental Concepts of
Mathematics (New York: Holt Rinehart, 1958), pp. 29-30.
even the mightiest is the servant of its environment by which it
can be dismissed without ceremony, but that even the lowliest
affects and moulds the economy and society instead of just
adapting to them; in other words, that the business enterprise
exists only in an economic and social ecology of great com-
plexity.
The basic postulates might include the following ideas:
(1) The business enterprise produces neither things nor ideas
but humanly determined values. The most beautifully designed
machine is still only so much scrap metal until it has utility for a
customer.
(2) Measurements in the business enterprise are such com-
plex, not to say metaphysical, symbols as money - at the same
time both highly abstract and amazingly concrete.
(3) Economic activity, of necessity, is the commitment of pre-
sent resources to an unknowable and uncertain future - a com-
mitment, in other words. to expectations rather than to facts.
Therefore, risk is of the essence, and risk making and risk
taking constitute the basic function of enterprise. And risks are
not only taken by the 'general manager', but right through the
whole organization by everybody who contributes knowledge -
that is, by every manager and professional specialist. This risk is
something quite different from risk in the statistician's prob-
ability; it is the risk of the unique event, the irreversible qualitat-
ive breaking of the pattern.
(4) Inside and outside the business enterprise there is constant
irreversible change; indeed, the business enterprise exists as the
agent of change in an industrial society, and it must be capable
both of purposeful evolution to adapt to new conditions and of
purposeful innovation to change the conditions.
Some of this is often said in the preface of books on manage-
ment science. It generally stays in the preface, however. Yet for
management science to contribute to business understanding, let
alone become a science, postulates like the foregoing ought to be
the fabric of its work. Of course we need quantification - though
it tends to come fairly late in the development of a discipline
(only now, for instance, can scientists really quantify in bio-
logy). We need the scientific method. And we need work on
specific areas and operations - careful, meticulous detail work.
But, above all, we need to recognize the particular character of
business enterprise and the unique postulates necessary for its
study. It is on this vision that we must build.
The first need of a management science is, then, that it respect
itself sufficiently as a distinct and genuine discipline.
The second clue to what is lacking in management science as

applied today is the emphasis throughout its literature and
throughout its work on 'minimizing risk' or even on 'eliminating
risk' as the goal and ultimate purpose of its work.
To try to eliminate risk in business enterprise is futile. Risk is
inherent in the commitment of present resources to future ex-
pectations. Indeed, economic progress can be defined as the
ability to take greater risks. The attempt to eliminate risks, even
the attempt to minimize them, can only make them irrational
and unbearable. It can only result in that greatest risk of all:
rigidity.
The main goal of a management science must be to enable
business to take the right risk. Indeed, it must be to enable
business to take greater risks - by providing knowledge and
understanding of alternative risks and alternative expectations;
by identifying the resources and efforts needed for desired re-
sults and by mobilizing energies for the greatest contribution;
and by measuring results against expectations, thereby pro-
viding means for early correction of wrong or inadequate de-
cisions.
All this may sound like mere quibbling over terms. Yet the
terminology of 'risk minimization' does induce a decided ani-
mus against risk taking and risk making - that is, against
business enterprise - in the literature of management science.
Much of it echoes the tone of the technocrats of a generation
ago, for it wants to subordinate business to technique, and. it
seems to see economic activity as a sphere of physical deter-
mination rather than as an affirmation and exercise of respon-
sible freedom and decision.
This is worse than being wrong. This is lack of respect for
one's subject matter - the one thing no science can afford and no
scientist can survive. Even the best and most serious work of
170 Technology, Management, and &x,'iety
good and serious people - and there is no lack of them hi man·
agement science ,- is bound to be vitiated by it.
The second requirement for a management science is, then,
that it take its subject matter seriously.
There would be little reason for concern about the trend of

management science if we did not need so badly a genuine dis-
cipline of entrepreneurship and business management.
We need a systematic supply of organized knowledge for tI'1e
risk-making and risk-taking decisions of business enterprise in
our complex and rapidly changing technology. economy. and
society; tools for the measurement of expectations and results;
effective means for common vision and communication among
the many functional and professional specialists - each Virith his
own knowledge, his own logic. and his own language - whose
combined efforts are needed to make the right business de-
cisions, to make them effective, and to produce results. We need
something teachable and learnable if only because we need far
too many people with manageIial vision and competence to de-
pend 011 the intuition of a few 'natural-born' geniuses; and only
the generalizations and concepts of a discipline can really be
learned or taught.
We know that these are urgent needs. In fact, the future
of the free enterprise system may depend on our ability to make
major managerial and entrepreneurial decisions marc rationally,
and to malce more people capable of making and of understand-
ing such decisions.
There would be little reason for concera here if management
science had not demonstrated its great potential to fill our need.
Of course, it is only in its infancy; real knowledge and under-
standing in vitally important areas may be decades away-may,
indeed. never be obtained. But the work already done is exciting
and powerful, and the talent at work is of a high order of
competence, ability, and dedication.
All this. however, may come to nought if management science
permits itself to become a management gadget bag. The oppor-
tunity will be lost, the need will go unfulfilled, and the promise
will be blighted unless management science learns to respect
both itself and its subject.
Index
Index
Abbot Suger on the Abbey Church Bell Telephone System, 53, 130-1
of St.-Denis (Suger), 38n, Benedict, St., 38
154-5n Berliner, Emile, 51
Age of Discontinuity, The Bernard, Claude, 159
(Drucker), 24n, 28n, 31n, Bernard, St., 155n
35n Blackstone, William, 158
Agricultural Revolution, 151, Bleeding, practice of, 153
156-7 Bluecher, Field Marshal Gebhard
Agriculture, 145, 156-7 von, 71
Ambrose, St., 89 Boehm-Bawerk's Law, 111
Analytica Posteriora (Aristotle), Boerhaave, Hermann, 158
167 Bonaventura, St., 154n
Anfaenge des Technischen Hoch- Boulding, Kenneth E., 46n, 164n
schulwesens, Die (Schna- Bourne, A. J., 157n
bel),157n Bradley, Albert, 142
Anthony, Susan B., 67 Brandeis, Louis, 28
Aquinas, St. Thomas, 154n Brave New World (Huxley), 78
Aristophanes, 43 Broussais, Franl;ois, J. V., 153n
Aristotle, 167 Bruner, Jerome, 6
Around the World in Eighty Days Budgeting process, operational
(Verne),75 view of, 137-40
Assur,106 Bulletin of the History of Medi-
Atomic bomb, first, 72 cine, 153n
Atomic energy, 62, 121-2 Bureau of Standards, U.S., 52
Automation, 40, 61 Burlingame, Roger, 161
Automobile industry, 144 Burnham, James, 28
Business behaviour, theory of,
Babylon, 106 need for, 126-30
Bacon, Roger, 153 Business enterprise, survival
Baeyer, Adolf von, 52 needs of, 130-35
Bank of England, 29 Business objectives, survival
Bell, Alexander Graham, 55 needs and, 126-40
173
174 Index
Business - contd. Communism, 72
budgeting process, operational Computer, the, main impact of,
view of, 137-40 89-92
business behaviour, theory of, manager and, 141-50
need for, 126-30 experience, obsolescence of,
business enterprise, survival 143-5
needs of, 130-35 information, new age of,
work to be done, 135-7 146-7
knowledge utility, entrance
California Institute of Techno- of, 145-6
logy, 49 managing the computer,
Capitalism, 160 147-9
Capital market, 82 numbers barrier, beyond,
Carothers, W. H., 54 149-50
Carswell, J., 155n Concept of the Corporation
Change, resistance to, 32 (Drucker), 28
Chaplin, Charlie, 78 Concepts, 6
Chicago, University of, 126 Conglomerates, 80-83
China, 100, 104, 106, 107 Corning Glass Company, 83
Chinese War (1894), 160 Conversion, 10
Chomsky, A. N., 1 Corvisart, Jean Nicolas, 159
Churchill, Winston S., 1 Craftsmen, 48-9, 50, 101
CIOS International Management Culture, technology and, 160-62
Congress, 15th (1969), 21n
Civilization, irrigation, 99-108 Dante Alighieri, 12
pretechnological, of 1900, 64-7 Darwin, Charles, 38
technological, worldwide, 72- Decisions
3, 159-60 entrepreneurial, 112, 115,120,
Qausewitz, Karl von., 71 121, 124, 149
Clausius, Rudolf J. E., 151 alternatives to, 116-17
Coke, Thomas William, 157 basis of, concept of, 114
Commentaries (Blackstone), 158 definition of, 116-18
Commons, John R., 29 impact stage of. 117
Communication, 1-20 risk-taking, 117
downward, 13-14, 16 structure and configuration
expectations and, 7-8 of, 120-21
fundamentals of, 4 time-span of, 113
information and, 10-16 present, futurity of, 110-12
involvement and, 8-10 Decision-structure, 117
organizational, 17-20 Declaration of Independence,
perception and, 4-7 158
upward, 16-17 DemoIon, A., 157n
Index 175
Depression of the 1930's, 77-8 Entstehtmg der Kathedrale, Die
Deutsche Geschichte im 19. Jahr- (Sedlmayr),38n
hundert (Schnabel), 161n Environment, man-made, 73-5
Diderot, Denis, 157 Evolution Scientifique et l' Agri-
Discipline, management as, 26-7 culture Fran~aise, L' (De-
Divina Commedia (Dante), 12 molon),157n
Doering, Otto, 60 Expectations, communication
Downward communication, 13- and,7-8
14,16 Experience, obsolescence of,
DuPont laboratory, 54 143-5
Dynamic Administration (Fol- Eyeglasses, invention of, 153
let),7
Faraday, Michael, 55, 158
Ecole des Ponts et Chaussees, Farmer's Tools, 1500-1900, The
157 (Fussell), 156n
Ecole Polytechnique, Paris, 49, FayoJ, Henri, 26, 27
158 First technological revolution,
Economic development, man- lesson of, 99-108
agement as result of, 27 Follett, Mary Parker, 7
result of management, 35 Forbes, R. J., 103
Edison, Thomas A., 51, 52-3, 55, Ford,Henry,49,59,60,61,68
57, 58, 59, 113 Forecasting, 109-11
Education, role of, 70-71, 126 Forrester, Jay W., 164n
Egypt, 99, 106, 107 Franklin, Benjamin, 155
Electrical engineering, 55 Free enterprise, 72
Emancipation of women, 67-8 Free-form organizations, 95-6
Encyclopedie (Diderot), 157 French Revolution, 158
Energy revolution, 62 Friedmann, Georges, 42n
English and American Tool Buil- Fussell, G. E., 156n
ders (Row), 157n Future of Industrial Man, The
Entrepreneurial decisions, 112, (Drucker), 28
115, 120, 121, 124, 149
alternatives to, 116-17 Galen, 153
basis of, concept of, 114 Gandhi, Mahatma, 65, 72
definition of, 116-18 General Electric Company, 53,
impact stage of, 117 54,122,164
risk-taking, 117 General Electric Research Lab·
structure and configuration of, oratory, 53, 58
120-21 General Motors Corporation,
time-span, of, 113 142
Entrepreneurial innovation, General Motors Research Cor-
managerial function, 31-2 poration, 50
176 Index
'General Systems Theory - The 'History of Medicine versus the
Skeleton of Science' History of Art' (Sarton),
(Boulding),46n, 164n 153n
Genghls Khan, 78 History of Technology (Singer et
Gerhard van Swieten (Mueller), al.), 38, 43, 45, 157n
158n Hitler, Adolf, 65, 78
Geschichte der deutschen Land- Hobbes, Thomas, 94
wirtschaft (Krzymowski), Homer, 41
157n Human Dialogue, The (Matson
Geschichte des oesterreichischen and Montagu), 2
Unterrichtswesens (Strak- Human engineering, 40-41
osch-Grassmann), I58n Human horizon, modern techno~
Gestalt psychology, 61 logy and, 75-6
Gilbreth, K. R., 157n Human Problems of an Industrial
Goebbels, Joseph Paul, 9 Civilization, The (Mayo),
Gothic Cathedral, The (Simson), 14,42n
44n, 154n Human Relations school, 26, 31
Government, bureaucratic, 105- Huxley, Aldous, 78
6,107
Great Britain, 77, 82 Ikhnaton, 106
Great Doctors, The (Sigrist), Illiteracy, 71
153n India, 72-3
Greece, 100 Individual, the, 102, 105, 106
Guest, Robert H., 42n 'Industrial Dynamics: A Major
Breakthrough for Deci-
HaU, Edward T., 5 sion Makers' (Forrester),
HarmIton, S. R, 38n 164n
Hammurabi, 100 Industrialization, 72-3
Harvard Business School, Industrial psychology or physio-
Fiftieth Anniversary Con- logy, 40
ference of (1958), 163n Industrial relations, 96-8
Harvey, William, 153 Industrial Revolution, 64-5, 151,
Haskins, Charles Homer, 154n 156, 157
Helmholtz, Hermann von, 55 hldustrial Society (Friedmann),
Henry, Joseph, 55, 158 42n
Herodotus, 161 Industries, development of, 49
Hertz, Heinrich, 55 Indus Valley, 99
Hesiod,43 Influence of England on the
Hippocrates, 152 French Agronomes, The
Hiroshima, Japan, 72 (Bourde), 157n
History ofMechanical Inventions, Information, i, 2-3, 15-16, 115-
(Usher), 157n 16, 145-6
Index 177
Information - contd. versity of Chicago, The,
availability of, 148 126n
communication and, 10-16 Journey to the Centre of the
new age of, 146-7 Earth (Verne), 66
organization of, 115-16
Information revolution, 16, 21 Kaiser Wilhelm. Society, 53
Innovation, technological, 49, Kelvin, William Thomson, 152
59-60, 63, 104, 107, 108, Kennedy, John F., 72
110,135 Kettering, Charles Franklin, 50
entrepreneurial, managerial Knowledge, 123-4, 152
function, 31-2 capital resource, 141-4
speed and risk of, 113-14 productivity of, 32-3
Institute of Management Sci- substitution for manual eifort,
ences, Fourth Interna- 70
tional Meeting of (1957), utility of, entrance of, 145-6
109n Knowledge work, 32-3, 97,142-3
International Academy of Man- Koch, Robert, 159
agement, In Korzybski, Alfred, 1
International Business Machines Krzymowski, R., 157n
Corporation, 141
International market, 93-4 Laboratory, research, 52-4, 56
Invention, technological, 49-52, Labourers, unskilled, 69, 97
57, 59-60, 63, 65-6, 72, Labour force, 70, 97
153 Land, Edwin H., 51
'Invention of Eyeglasses, The' Landmarks of Tomorrow, The
(Rosen), 153n ODrucker), 113n, 114n
Involvement, communications Liebig, Justus von, 51, 55, 157, 158
and, 8-10 Life magazine, 147
Irrigation cities, 99-102, 104 Listening, 14-15, 16
Irrigation civilization, 99-108 Lister, Joseph, 159
Iwasaki family, 27 Locke, John, 94
Long-range planning, 109-25
Japan, 65, 159 decision structure and config-
Jay, Anthony, 28n uration, 120-21
Jenner, Edward, 154 definition of, 109-12
Job mobility. fact and myth of, measurements, aree of, 122-3
86-7 new features of, 112-16
Joseph II, Emperor, 158 new-knowledge content of,
Josephson, Matthew, 57 118-23
Journal for the History of Medi- requirements of, 116-24
cine, 153n risks, characteristics of, 121-2
Journal of Business of the Uni- time dimensions of, 118-20
178 Index
Machiavelli, Niccoli), 28 Management Today, 79n
Machine operators, 69 ~anager, the, 79-98
'Machine Tools' (Gilbreth), 157n computer and, 141-50
Malthus, Thomas, 159 experience, obsolescence of,
Man, life-span ot~ 159 143-5
technology and, 76-8 information, new age of,
Management, economic and so· 146-7
ciaJ development as result knowledge utility, entrance
of~ 35-6 of, 145-6
entrepreneurial innovation, main impact of the compu~
function of, 31-2 tor, 89-92
institution of world economy, managing the computer,
33-4 147-9
literature of, 126 numbers barrier, beyond,
manual worker and, 25-6 149-50
new realities and, 28-35 c.onglomerates, 80-83
new role of, 21-36 industrial relations and, 96-8
new tools of, 36 job mobility, facts and myth
old assumptions of, 22-7 of, 86-7
performance of, 84--6 job o~ 79-80, 92-94
pluralism of, 28-30 multiple measures, 83--4
productivity of knowledge. organization stmcture and,
32-3 94--6
quality of life, accountability performance of, 84-6
for, 30-31 small business and, 88-9
research, 58 Managerial Revolution (Burn~
result of economic develop- ham),28
ment,27 Man-made environment, 73-5
science or discipline, 26-7 Man on the Assembly Line, The
scope of, 22-3 (Walker and Guest), 42n
small business and, 88-9 Manual worker, 33
social responsibilities of, 23 management and, 25-6
task of, 23-5, 36 Marconi, Guglielmo, 55
Ma:nagement and ~Machiavelli Marx, Karl, 28
(Jay),28n Massachusetts Institute of Tech-
Management development, 30- nology, 146, 164
31 Mass production, 60, 61, 68
Management science, 12.<1,.-5, Materials revolution, 61-2
163-70 Matson, Floyd W., 2
.Management Science Magazine, Maxwell, James Clerk, 55, 158
46n, l09n, 122, 164n Mayo, Elton, 14, 42n
Management Scientists, 124-5 McKinsey & Company, 29
Index 179
McKinsey Quarterly, The, 141n Obsolescence of experience,
McNamara, Robert, 30 143-5
Measurements, area of. 122-3 Oceanic development, 62
Mechanical arts, 156, 157-8 Optics (Newton), 153n
Medawar, Sir P. B., 39n Organization, 79-80
Medical revolution, 151, 152-4, Organizational communication,
158-9 17-20
Menlo Park (N.J.) laboratory, Organization development, 30-
52-3 31
Mesopotwcrlla, 99, 104, 106 Organization of work, 41-3
Methods,changesin,48,54-60 changes in, 68-70
of technological work. 54-60 Organization structure, tradi-
Mexico, 104 tional, 94-6
Military, the, 106-7 Oriental Despotism: A Compara-
Mining Academy in Freiberg, tive Study of Total Power
155n, 158 (Wittvogel), 101
Mitsui family, 27 Osborn, Fairfield, 103
Modem Times (film), 78
Mohole project, 62 Panofsky, Erwin, 38n
Mond, Ludwig, 49 Pasteur, Louis, 154, 159
Montagu, Ashley, 2 Paternalism, 19
Morgagni, 158 Pathological Anatomy (Morgag-
Morse, Samuel, 49 nil, 158
Mueller, W., 158n Perception, 13, 18-19
Multiple measures, 83-4 communication and, 5-7, lO-
Mutnford,Le~s. 103, 161 II
Performance appraisal, 17-18
Napoleon I, Emperor, 71, 159 Perkin, Sir William H., 49,55
Nationalism, 77 Personalism, 106
Needham, Joseph, 103 Phaedrus (plato), 5
Nehru, Jawaharlal, 72-3 Paiget, Jean, 6
Newcomen, Thomas, 158 Planck Society, Max, S3
New Pluralism, 28-30,36 Planning, long-range, 109-25
New SOCiety, The (Drucker), 28, decision structure and configu-
30 ration, 120-21
Newton, Sir Isaac, 155 definition of, 109-12
Newton's Second Law, 117 measurements, area of, 122-3
Noise, 4 new features of, 112-16
Novalis, 155n new-knowledge content of,
Numbers barrier, beyond, 149- 118-23
50 requirements of, 116-24
Objective reality, 105 risks, characteristics of, 121-2
180 Index
Planning, long-range - conld. Science, 107
time dimensions of, 118-20 management as, 26-7, 163-70
Plato,S, 154 medicine and, 159
Polish Academy of Science, 42n technology and, 55-7, 152-6
Pretechnological civilization of Scientific Management, 25, 28,
1900, 64-7 32, 33, 40, 41, 68-9
Principia M athematica (Russell Sears, Roebuck Company. 60,
and Whitehead), 1 82, 145
Productivity, 32-3, 69 Semmelweis, Ignaz Philipp, 159
Professionalism, 51-2 Shibusawa family, 27
Propaganda, 9-10 Siemens, Werner von, 49,55,59
Sigrist, Henry E., 153n
Quality of life, management Silent Language, The (Hall), 5
accountable for, 30-31 Simson, Otto von, 51, 154n
Singer, Charles, 37,45, 157n
Rathenau, Walter, 26, 27, 29 Skills, 142-3
Rationalism, 106 Skinner, B. F., 6
Reduction of All Arts to Theology Small business, manager and,
(St. Bonaventura), 154n 88-9
Renaissance of The Twelfth Cen- Smallpox vaccination, 154
tury, The (Haskins), 154n Smith, Cyril Stanley, 103
Reports, 81 Social classes, 101, 107
Research, technological, 58-9 Social development, result of
Research laboratory, 52-4, 56 management, 36
Research management, 58 Social institutions, technology
Research teams, 58 re-makes, 67-73
Resistance to change, 32 Social Problems of an Industrial
Risks, characteristics of, long- Civilization, The (Mayo),
range planning, 121-2 14,42n
elimination of, 111-12, 169 Society, technology and, in the
Roe, J. W., 157n twentieth century, 64-78
Romantic Natural Philosophy, Society for General Systems Re-
155n search,46n
Rosen, E., 153n Society for the History of Tech-
Rousseau, Jean Jacques, 94 nology, 99n, 103
Russell, Bertrand, 1, 11 Socrates,S
Sound, 4
Sarton, George, 153n South Sea Bubble (1720), 155,
Satisfaction, 31 156
Schelling, Friedrich W. J. von, South Sea Bubble, The (Carswell),
155n 155n
Schnabel, Franz., 157n, 161 Soviet Union, 74
Index 181
Space programme, 60 Technological work, methods of
Specialization, 51-2 54-60
Sprague, Frank J., 52 structure of, 48-54
Stalin, Joseph, 26 Technology, 37-47
Steel industry, 144-5 advances in, 66
Steinmetz, Charles P., 53 agriculture and, 156-7
Strakosch-Grassmann, G., I58n culture and, 160---62
Structure changes, 4S-54 human horizon and, 75-6
Structure of technological work, man and, 76-8
48-54 mechanical arts and, 156,
Suger, Abbot, 38n, 154n 157-8
Sumer, 103 methods of technological
Survival needs, business objec- work,54-60
tives and, 126-40 science and, 55-7, 152-6
budgeting process, operational social institutions remade by,
view of, 137-40 67-73
business behaviour, theory of, society and, in the twentieth
need for, 126-30 century, 64-78
business enterprise, survival structure of technological
needs of, 130-35 work,48-54
work to be done, 135-7 systems approach, 48, 60-63
Swift, Jonathan, 156 trends in the twentieth century,
Systems approach, 48, 60-63 48-63
Technology and Culture, 37n, 99n
T-group, 3 Technology in Western Civiliza-
Tagore, Rabindranath, 65 tion (Kranzberg and Pur-
Taylor, Frederick Winslow, 25, sell), 48n, 64n
26,28, 32,40,68-70 Thaer, Albrecht, 157
Technological civilization, Thomson, H. G., 43
world-wide, 72-3, 159- Time Machine, The (Wells), 66
60 Time-sharing system, 146
Technological innovation, 49, Time-span of decisions, 113
59-60, 63, 104, 107, lOS, Tools, work and, 37-47
110, 135 Trade-union legislation, 97
Technological iuvention, 49-52, Tull, Jethro, 157
57, 59-60, 63, 65-6, 72, Twenty Thousand Leagues under
153 the Sea (Verne), 66
Technological polity, 102
Technological research, 58-9 Uniqueness of the Individual, The
Technological Revolution, 100, (Medawar), 39n
151-62 Universities, technical, founding
first, lessons of, 99-108 ot~ 49, 158
182 Index
Upward communications, 16-17 Who's Who in America, 51
Urbanization, 73-5, 77 Wiener, Norbert, 1
Usher. A. P., 157n Wittgenstein, Ludwig, 1
Wittvogel, Karl A., lOIn
Vaccination, 154 Woehler, Frederick, 158
Vail, Theodore, 130-31 Women, emancipation of, 67-8
Van Swieten, Gerhard, 158, 159 Work, knowledge, 32-3, 97,
Verne, Jules, 66, 7S 142-3
Virgil, 43 organization of, 41-3
changes in, 68-70
Walker, Charles R., 42n technological, methods of, S4-
Wallace, Alfred Russell, 37, 38-9 60
Warfare, change in, 72 structure of, 48-54
Watt, James, 55, 151, 156, 158 tools and, 37--47
Wealth of Nations, The (Smith), World War I, 1,2,50, 56, 59, 67,
158 68,77
Wellington, Duke of, 71 World War 11,25, 50, 65, 67, 71,
Wells, H. G., 66 72,78
Westinghouse, George, 51 Wright, Wilbur and Orville, 49
White, Lynn T., 38, 103
Whitehead, Alfred North, 1, 11 Young, Arthur, 157
Whitney, Eli, 49, 60, 157 Yucatan, 104

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Technology,

Technology, Management, and Society

This edition published 20 II by Routledge

First published 1970

© Peter F, Drucker 1958, 1959, 1961, 1966, 1967, 1969, 1970

Major portions of this work were previously published in Harvard Business

Chapters I and 6 are reprinted from Management Today by permission of

Chapters 4 and 5 are reprinted from Technology in Western Civilization, volume

British Library Cataloguing in Publication Data

There should be underlying unity to a collection of essays.

An essay collection, however, should also have diversity. It

CONCERN with 'information' and 'communications' started

WHAT WE HAVE LEARNED

Communication and Information are Different and Largely Op"

I fully realire that this summary of what we have learned is

What, then, can our knowledge and our experience teach us

Can we then say anything constructive about communication?

The traditional defence of paternalism has always been 'It's a

THE major assumptions on which both the theory and the

THE OLD ASSUMPTIONS

ASSUMPTION ONE: Management is management of business.

This assumption is held subconsciously rather than in full

ASSUMPTION TWO: 'Social responsibilities' of management,

This view derives directly from the belief that business is

ASSUMPTION THREE: The primary, perhaps the only, task of

To a large extent this assumption was a necessity during

ASSUMPTION FOUR: It is the manual worker - skilled or

To have made the manual worker productive is, indeed, the

ASSUMPTION FIVE: Management is a 'science' or at least a

These two propositions were as obvious to Taylor in the

mans in respect to this assumption. That, however, the as~

ASSUMPTION SIX: Management is the result of economic

- AND THE NEW REALITIES

Today, however, we need quite different assumptions. They,

ASSUMPTION ONE: Every major task of developed society

This does not mean that business management can be trans-

ASSUMPTION TWO: Because our society is rapidly becom-

This will apply i..'1creasingly to fulfilment of the individual.

ASSUMPTION THREE: Entrepreneurial innovation will be as

ASSUMPTION FOUR: A primary task of management in the

Taylor put knowledge to work to make the manual worker

ASSUMPTION FIVE: There are management tools and tech-

It can be said without too much oversimplification that

MAN, alone of all animals, is capable of purposeful. non-

• S. B. Hamilton only expresses the prevailing view of technologists when

For the historian of technology this lLne of thought might be

Natural Death' in his The Uniqueness of the Individual (London: Methuen,

The political historian or the art historian, still dominated by

One fmal question must be asked: Without study and

TECHNOLOGICAL activity during the twentieth century has

THE STRUCTURE OF TECHNOLOGICAL WORK

Throughout the nineteenth century technological activity. de--

THE METHODS OF TECHNOLOGICAL WORK

Hand in hand with changes in the structure of technological

THE SYSTEMS APPROACH

Mass production exemplifies, too, a new dimension that has

THE PRETECHNOLOGICAL CIVILIZATION OF 1900

MODERN man everywhere takes technological civilization

TECHNOLOGY REMAKES SOCIAL INSTITUTIONS