“One job that always needs to be organized as a distinct activity is the economic analysis of the business, its dimensions and tasks, and the program for performance.”
For an organizational performance program to be realized, four “big areas” need to be thought through. First, executives need to understand and prioritize their opportunities and risks. Drucker explains additive, complementary, and breakthrough opportunities. He also classifies risks. Some risks should not be taken, others should not not be taken. A risk may align with and promote the idea of the business, or it may not align and require a reconsideration of the idea.
Second, executives need to consider the scope of the business. Meaning they need to consider how they will manage the demands of specialization, diversification, and integration. These must be considered in light of markets and knowledge areas. And when markets and knowledge areas change, the scope should change too.
Third, opportunities, risk, and scope require executives to consider the method of action in regard to finances and organization. Drucker provides short reasons why a business sale, acquisition, or joint venture is in order. Decision factors include the organization’s market, knowledge, and management structure.
Fourth, Drucker adds strategy and structure. The corporate ordo salutis of results and growth. Drucker believes that management structure should fit and promote “the idea of the business, its excellence, its priorities, and its opportunities.” (216)
(Managing for Results, chapter 13)