Business Administration, for years, has been sustained based on Taylor and Fayol, who for all of us Administrators are a kind of column that supports the building of knowledge that we are building on the different practices and actions that must be adopted when the time of administration.

Taylor with his “scientific work organization theory” came to be considered the father of Scientific Management. His main contributions were: the division of labor, standardization of tools, and movement studies, among others.

Fayol for his part, studies the work of Taylor, and with his experiences as an administrator, makes substantial contributions to administrative thought. He defined three fundamental aspects for the proper development of the administration, which are: The division of labor (adapted from Taylor’s thought), the administrative process, and the formulation of technical criteria.

These contributions made by Fayol show that with time, the environment that surrounds us changes, and therefore the conditions in which a company must be run as well.

This is why over time the world of administration has found other great contributions, among which I want to highlight that of Peter Drucker, an Austrian who decided to make contributions to the Administration and adapt its orientation to the reality of the 21st century.

Drucker has made great contributions to the world of management, among which are the concepts of “privatization”, “entrepreneurship”, “objectives”, “knowledge society” and “postmodernity” that were masterfully developed by the author.

Drucker defines with great assertiveness the precepts that make modern administration a more complex activity, but at the same time, more fascinating and much more important.

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But, if the world has changed, why hasn’t the philosophy of administration changed? Is it feasible for companies to work under the arguments of the already old philosophy of administration?

In his book, The Post-Capitalist Society, Peter Drucker makes a statement that I would like to share with you:

The industries that in the last 50 years have come to occupy the center of the economy are those whose business is the production and distribution of knowledge, and not the production and distribution of objects.

This statement by Drucker is, without fear of being wrong, an x-ray of the reality that exists today in the business world, most companies with an international domain are companies dedicated to knowledge, we have the case of Carlos Slim and its communications companies, or the case of Bill Gates and Windows, also the late Steve Jobs and Apple, all are owners of companies linked to knowledge and that play a dominant role in the new era of business.

Faced with this situation, we have to ask ourselves: Should the Business Administration follow its philosophy of “minimizing costs and maximizing benefits”?

The contemporary world strikes every day at this philosophy that is taught to administrators as a law of life. Imagine if Carlos Slim had applied this philosophy, would he be the richest man in the world today? Of course not, because today’s world requires large investments in Research, Training, and the management or implementation of innovations made by the researchers.

The administration must continue to change, it must continue to adapt to reality, we cannot continue thinking that by spending little we will obtain many benefits, in the knowledge society, quality costs money, and human resources are not like before, they are knowledge managers and therefore they know what they are worth, so that, if we want to be successful as administrators, we must, as Drucker says in his book Management in the Future Society “Combine three things simultaneously: Improve, Extend and Innovate” and to comply with this you have to invest with a broad vision.

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Today’s dilemma for managers is to make the companies they run competitively. The term “competitiveness” which has become fashionable in the globalized world means the following: “the ability of a company or country to obtain profitability in the market in relation to its competitors”, seen from this point of view the term does not would bring nothing new to the lives of administrators. This term takes value when the market becomes very competitive, which is what is happening.

The fact of living in a globalized world where knowledge has been democratized and where tariff barriers are eliminated through trade agreements leads many companies to lose competitiveness, this happens because they were not prepared for the reality of the globalized world.

Why weren’t they prepared?

I think that many were not prepared because this required an investment that would not give results in the short term, so they decided to continue obtaining profits without increasing the cost of their operations and put aside investments in new technologies and research.

But who was wrong? Wasn’t that what you were taught as management principles? Weren’t they maximizing benefits and minimizing costs?

It is evident that they thought they were doing the right thing, and if they did, they did so based on what they had learned, and it is important to point out that at other times, it might have worked, but as I have said on other occasions, just as that life, the administration also evolves and changes reality.

Fayol’s reality was not Taylor’s, Drucker’s was not Fayol’s and that of the authors and administrators of these times is not Drucker’s either, the world changes constantly and the more time passes, the less the period in which realities change.

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The challenge that administrators have today is to have a broad vision of the reality of the world in which they operate, this will allow them to have a greater degree of competitiveness in this world where barriers are increasingly eliminated.

To achieve competitiveness and therefore permanence in the business world, you have to invest but invest with a broad vision.