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January 27, 2006

I've never read Peter Drucker before, but after just a few chapters of "The Essential Drucker" I'm begining to understand why he's so respected. I'll write more when I finish it but, since college, I've never had as great an urge to highlight sections of a text until this book.

He tackles management from a historical, social, and philosophical standpoint with a clarity I haven't seen in *any* of the other management books I've read (now starting to reach a significant number).

Asked what a business is, the typical business man is likely to answer, "An organization to make profit". The typical economist is likely to give the same answer. The answer is not only false, it is irrelevant.

The prevailing economic theory of the mission of business enterprise and behavior, the maximization of profit [...] cannot explain how Sears, Roebuck or any other business operates, or how it should operate. The concept of profit maximization is, in fact, meaningless. The danger in the concept of profit maximization is that it makes profitability appear a myth.

Profit and profitability are, however, crucial---for society even more than for the individual business. Yet profitability is not the purpose of, but the limiting factor on business enterprise and business activity...
- "The Essential Drucker", Peter Drucker

Even though I've only read four chapters, I recommend this book.