Management Moderators: Venkat, Kim, Wei, Peter Agenda • Warm-up: Jeopardy • Topic 1: “I” vs. “We” • Topic 2: Human Capital vs. Profits Example Jeopardy Question This famous businessperson answered a question with a question. Who was Peter Drucker? This U.S. president recognized the importance of creating an environment conducive to worldwide economic growth, and as such dedicated his term to cultivating foreign affairs. Who was President Truman? This person was interested in European history and Japanese art, and retained a lifelong distrust of charismatic leaders. Who was Peter Drucker? This head of General Motors was famous for his unconventional meeting style and widely regarded as “the master of follow-up.” Who was Alfred Sloan? This person described himself as close to his fellows, but commented that he was a difficult person to get along with. Who was Red Auerbach? This 79-year-old newspaper magnate has been divorced twice, and has a seven-year-old daughter. Who is Rupert Murdoch? Case: News Corp The Company: • Diversified global media company • Powerful Control of filmed entertainment, newspapers, information services, cable network programming, television, direct broadcast satellite television, magazines and inserts, book publishing, and other. • Fiscal 2009 Sales: $30,423m; Loss in 2009: $3,378m; Profit in 2008: $5,387m • 76th in Fortune 500 2010, 2nd largest in Entertainment Sector (But Walt Disney) Partial Executive Employees: • Rupert Murdoch Chairman and CEO • Chase Carey Deputy Chairman, President and COO • James R. Murdoch Chairman and Chief Executive, Europe and Asia Rupert Murdoch Quotes On Decisions and Management “You can't build a strong corporation with a lot of committees and a board that has to be consulted every turn. You have to be able to make decisions on your own” On Changes and Success "I'm a catalyst for change. You can't be an outsider and be successful over 30 years without leaving a certain amount of scar tissue around the place" On News Corp “For better or for worse, our company (The News Corporation Ltd.) is a reflection of my thinking, my character, my values.” Murdoch’s Management Style Murdoch’s management philosophy directly contradicts Drucker’s mantra of “Think and say ‘we’”. Given Murdoch’s success as the founder of News Corp, is Drucker wrong? Or is Murdoch an exception to the rule? Quick Facts about Peter Drucker • Writer (of 39 books), management consultant, and selfdescribed “social ecologist” • Foresaw the arrival of "knowledge workers" motivated by personal pride long before Internet era • Awarded 7 McKinsey Awards, Presidential Medal of Freedom, and 25 honorary doctorates • Criticism includes “losing the facts”, concept “Management by objectives” is flawed. Management is About Human Beings A few lessons from Peter Drucker regarding management include: • Companies should treat employees like their most valuable resource • Managers should never promote an employee on the basis of his or her potential but based only on performance • Successful enterprises create the conditions to allow their employees to do their best work Management Challenge Your Teams Role: • Your team makes up the Board of Directors of Swift Transportation, a large publicly-traded trucking company The Situation • Jerry, the CEO, is the well-loved leader of 22,000 employees in this service-based business • Due to continued poor stock performance, there is growing pressure from shareholders to replace Jerry The Challenge • As the executive board, you must take a firm position on whether or not to replace him with someone who will be more profit-focused. Will you risk employee morale in an effort to improve investor returns?