resources, puts them to the best possible use, and values the person as a whole: “We
must no longer consider a company a hierarchical pyramid with the value-creating
process divided into leadership and organization, but as a house with a horizontal
value creation processes and a roof, which gives strategic direction and objectives
with a flat hierarchy and a central nervous system, information system and commu-
nication system” (Bartlett and Ghoshal 2000, p. 112).
For example, Hans-J€org Bullinger, President of the Fraunhofer Society, sees a
cause for the continuing decline of the German economy in companies being the
way they are: “I believe that many companies are still depending on organizational
leadership structures from the industrial age. At that time, work was divided in
small steps and then put together. For the creative service society of today, but
also in the innovative product area, we have to work with much freer working
methods in order to develop innovative technologies. For example in the develop-
ment department of BMW there are no defined working hours; only the result
counts” (Forum, 02/2004, p. 13).
In his book “Management Challenges for the Twenty-First Century” Peter F.
Drucker claimed: “Forms of organization must be equipment in the tool box of the
leader” (Drucker 1999, p. 28). Various forms of organization must be analyzed for
their strengths and weaknesses in dealing with a given situation. “It is not about
finding a unique form of organization, but about finding, developing and verifying a
form of organization that is designed to fit the task to be achieved” (Drucker 1999,
p. 32).
The objectives of an organization – whether a company or public administration –
decides the strategy and the strategy decides the structure (see Drucker 2004, p. 97).
It is also Drucker’s opinion that the ideal form of organization does not exist.
Organization is merely a “tool, which enables people to cooperate in a productive
way” (Drucker 2004, p. 98). The task of leadership is not to find the proper
organizational structure, but to find the “appropriate organization for the given
task” and to constantly optimize it. Sometimes it takes a strictly functional organi-
zation with a clear specialization, sometimes decentralization is useful and some-
times teamwork is required.
Drucker also cited more universal organizational principles: first, the organiza-
tion itself has to be transparent. People have to know and understand the structures
in which they work. In addition, the authority has to take responsibility. The captain
must be authorized to decide on behalf of all. Drucker also considered it important
that all members of an organization have only one supervisor. No one should
experience conflicts of loyalty and no one should serve more than one “master.”
Drucker was quite skeptical about modern cross-departmental teams that have to
report to multiple managers; he would most likely have felt similarly about matrix
organizations.
According to Drucker the role of companies is dominated by four aspects: firstly,
a company creates resources, which means it transforms costs into energy. Sec-
ondly, it represents a link in an economic chain, which has to be considered to be a
unit. Thirdly, it is a social institution designed to produce wealth. And fourthly, it
110 2 Occupation or Calling: What Makes for Good Leadership?