People and Performance by Peter Drucker

Author:Peter Drucker
Language: eng
Format: mobi, epub
ISBN: 9781136008252
Publisher: Taylor and Francis
Published: 2013-05-12T14:00:00+00:00

The Two Faces of Information

Information activities present a special organizational problem. In the terms the chemist uses, they are “bi-valent” they have two faces, two dimensions, and require two different “bonds.” Unlike most other result-producing activities, they are not concerned with the entire process itself. This means that they have to be both centralized and decentralized.

Information-producing activities, whether accounting work or operations research, resemble the nervous system of a biological organism which is also both centralized and decentralized down to the smallest and most remote cell in the body.

Information activities therefore have two organizational homes rather than one.

The traditional organization chart expresses this in the two different lines that connect an information activity to “bosses” : a solid line to the head of the unit for which it is the information provider, and a dotted line to the central information group, for instance, the company controller. One conclusion from this is that information work should be kept separate from other kinds of work.

American business has typically violated this rule by putting accounting, i.e., a traditional information activity, into one component with the treasurer, i.e., the result-producing operating work of supplying capital and managing money in the business. The justification has been that both “deal with money.” But, of course, accounting does not deal with money; it deals with figures. The consequence of the traditional approach has been the slighting of financial management. As long as money was — or seemed — cheap this could be excused; to neglect money management did not cost very much. But the era of cheap money came to an end around 1970; since then too slight financial management has become an expensive mistake.

The tough question with respect to information activities is which of them belong together and which should be kept apart. There is much talk today about “integrated total information systems.” This of course implies that all — or at least most — information activities should be in one component. Insofar as this means that new and different information activities, e. g., operations research or a computer system, should not be subordinated to traditional accounting, the point is well taken. But should they be coordinated? Or should they be separate?

There is, so far, no clear answer and no satisfactory way to organize information work — though it is clearly a key activity. Nobody has yet seen a total information system. No one may ever see one. But as we develop information capacity we will have to grapple with the organizational problem and will have to find answers, or at least approaches.

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