Nathalie Escobar
Principles of Mgmt
Professor Moy
May 20, 2008
Discuss Drucker’s approach to defining organizational purpose.
Peter Drucker emphasized that an organization’s purpose should be examined from the
very beginning, during difficult times and during successful periods. An organizational purpose
can be determined by its customers and by the organizational itself. However, what can clarify
the purpose of an organization is customer satisfaction. It defines the purpose more clearly with
its products and services better than the organization’s name, statutes, or articles of
incorporation.
Drucker also made an outline of three questions which need to be answered in order to
define an organization’s current business. The first outline of the three questions is where
management must identify to the customers about where they are, how they buy, and how they
can be reached. The second question is where management must now what the customer buys.
For example, Lexus owners buy these cars because of the looks and of the luxury. Lastly what is
the customer looking for in the product? Customers may look for the price, quality in apparel
stores such as Macy’s or service at Starbucks.
In management, Drucker has four areas of investigation which can help identify the
direction of the future of a business will be and what should be. These four areas can help
determine the organizational mission of its existence and if the organization has the potential to
achieve their goals. The first area is market potential and the question that can help us investigate
is “What does the long-term trend looks like?” The second area is the changes in a market
structure that might occur due to economic developments, the changes in styles or fashions, or
competition. The third area is the possible changes that will alter customers’ buying habits. Last
of all four is what customers needs that are not being adequately served by available products
and services.
An organization’s purpose should be examined from the very beginning, throughout all
hardships and through many flourishing moments. An organizational purpose can be highly
determined through their customers’ satisfaction of the organization’s products and services.