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Timeless Management Principles:
​Principles in Business

Watson Jr. and Drucker on Principles

Published August 3, 2021
Focus on the "Principle" of How To Do Things
"These were general principles of organization and procedure - principles how to do and not to do things, rather than what to do or not to do. ... General Motors owes its strength precisely to that use of principles and concepts as guides for concrete, unplanned and unforeseen actions of which the "planner" knows nothing, is thus of general importance.

​"The most successful attempt to provide a basis for the political organization of the future, the American Constitution, used the same method. The Constitution is not a "plan" of government, laying down what ought to be done. Neither is it "pragmatic." It establishes a few, simple organs of government with enormous powers of which only the limits are given.


"The purpose of such a concept is never to serve as a rigid rule. Rather it is to be used like a compass bearing taken across rugged mountains. The actual trail will follow the natural contours of the terrain; but the bearing will give the deviation from the true course at every step and will thus ultimately lead to the objective, however great the detour and however much the objective has been lost sight of on the way."​
Peter F. Drucker
The Concept of the Corporation
"How Well Does It Work?," 1964
A Belief System Provides Bearings of Principle
"I believe the real difference between success and failure in a corporation can very often be traced to the question of how well the organization brings out the great energies and talents of its people. What does it do to help these people find common cause with each other? How does it keep them pointed in the right direction despite the many rivalries and difference which may exist among them? ...

"[These problems] exist in all large organizations, in political and religious institutions. Consider any great organization - one that has lasted over the years - and I think you will find that it owes its resiliency, not to its form of organization or administrative skills, but to the power of what we call beliefs and the appeal of those beliefs have for its people.

"This, then, is my thesis: I firmly believe that any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions. Next, I believe that the most important single factor in corporate success is faithful adherence to those beliefs.

"In other words, the basic philosophy, spirit, and drive of an organization have far more to do with its relative achievements than do technological or economic resources, organizational structure, innovation and timing"
​Thomas. J. Watson Jr.
A Business and its Beliefs
"The Ideas That Helped Build IBM," 1963

​Watson Jr. with his basic beliefs, like the founders of the American Constitution, focused on "principles of how" a corporation should achieve success. He left the "what to do" in the hands of hundreds of thousands of decentralized and empowered individual decision makers. These decision makers were guided by the IBM Basic Beliefs - a compass bearing that ever pointed to an IBM corporate true north. They (employee and executive alike) were held accountable through Performance Reviews, Opinion Surveys, Open Doors, and Executive Interviews. Guidance to first-line managers was sent out through Management Briefings.

​Without a guiding compass, what will carry American Corporations through the next great turmoil if it isn't its own people unified around a set of basic beliefs?
​Peter E. Greulich Insight
March 17, 2013​

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  • Home
  • About
  • Books / Bibliography
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      • Preface
      • Foreword
      • Introduction
      • Business Talk Interview
      • Book Trailers and Videos
    • A View from Beneath >
      • Preface
      • Resource Actions >
        • Two R.A. Days Hit Home
        • R.A. Day Kills Productivity
      • Business Talk Interview
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    • The World's Greatest Salesman >
      • Preface
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          • An American Four-in-Hand
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          • Edison: His Life and Inventions
          • Edison: My Friend
        • Farquhar, A. B.
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        • Penney, James C. >
          • Fifty Years With the Golden Rule
        • Procter, William C.
        • Rockefeller Sr., John D.
        • Rosenwald, Julius
        • Sloan Jr., Alfred P.
        • Swope, Gerard >
          • Swope of G.E.
          • The Swope Plan
          • Selected Addresses
        • Verity, George M. >
          • True Steel
          • Character & Success
        • Wanamaker, John >
          • A Business Biography
          • Retail Firsts
        • Watson Jr., Thomas J. >
          • A Business and Its Beliefs
          • Management Briefings
          • Father, Son & Company
        • Watson Sr., Thomas J. >
          • Human Relations
          • Men-Minutes-Money
          • The Lengthening Shadow
        • Young, Owen D. >
          • Selected Addresses
          • New Industrial Leader
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          • My Own Story
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        • Aren't Buying Into IBM
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        • Failure of Work at Home
      • Financial Engineering >
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        • Aggressive Bookkeeping
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          • The Greatest Gamble
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        • The Wild Goose
        • Royal Dissenters
        • Corporate Constitution
        • Respect for the Individual
        • Service to the Customer
        • Pursuit of Excellence
    • Corporate Products >
      • 1890: U.S. Census
      • 1920: Dayton Scales
      • 1940: The Electromatic
    • Thomas J. Watson Sr. >
      • Articles by Watson >
        • On World Peace
        • On the Cost of War
        • On Public Education
        • On Thomas Jefferson
        • On Thoughtful Mistakes
        • On Stakeholder Relations
      • Articles about Watson >
        • The $1,000-A-Day Chief Executive Officer
        • Employees are Valued
        • Democracy's Man o' War
        • Human Relations in 1956
        • A CEO Who Earned His Pay
        • The Lengthening Shadow
      • Slice of Life Stories >
        • Dali, Salvador
        • Drucker, Peter F. >
          • Authority and Power
          • Short-Term Thinking
          • A Corporate Culture
          • Raising Business Issues
          • Focus on Principles
          • Character and Manners
          • Knowledge Workers
          • Recognizing Ability
          • Individual Respect
          • Employee Paternalism
        • Eastman, George
        • Penney, J. C. (James Cash) >
          • Watson Homestead
          • Golden Rule Businesses
        • Fighting Discrimination
      • Pre-World War II >
        • A Lost Dream of Peace
        • USO Camp Show Founder
      • World War II Effort >
        • Selling War Bonds
        • Production Awards
        • Controlling Profits
        • Machine Records Units
        • Wartime Contributions
        • Widows & Orphans Fund
        • Declaring Human Rights
        • Supporting Home Morale
        • Employee Military Service
        • War's End & Reconversion
      • Post-World War II >
        • Endicott Memorial
        • Poughkeepsie Memorial
        • Rehiring WWII Veterans
      • A Pajama Party
      • A 1943 Tax Problem
      • The Story of "THINK"
      • A Gift of Retirement
      • Learning from Crises
      • IBM Employee Housing >
        • Construction Timeline
      • Two Journalists "THINK"
      • A Buddy Davis Interview
      • Quotes of Watson
      • Quotes about Watson
      • Women in the Workplace
      • A Successful Rebranding
      • Tom Watson's Wild Ducks
  • Articles
    • Corporate Articles >
      • High-Performance Corporations
      • The Art of the Restart
      • Crises, Recoveries & Lessons Learned
      • Strategy Should Create Human Relationships
      • A Time-Tested Corporate Constitution
      • IBM, JC Penney and The Golden Rule
      • How IBM Created its 20th Century Brand
      • The Greatest Business Risk of the 20th Century
      • How to Grow a Business
      • The Importance of Sales Productivity
      • How Much Is a Great CEO Worth
      • Let Your Guard Down
    • Business Articles >
      • Business Witticism
      • The Golden Rule in Business
      • Who and What Built Early American Capitalism
      • Capitalism Needs Industrialist Minded CEOs
      • Producing Corporate True Steel
      • CEO Perspectives >
        • Rules of Success
        • Top Employee Qualities
        • Industrialist vs. Capitalist
      • An Open Letter to the World's CEOs
      • Henry Ford Takes Control
      • The Razor Blade Business Model
      • Two Successful 20th Century Businesswomen
      • Sears: A Dead Franchise Walking
      • A LinkedIn Incognito Mode
      • Value a College Education
    • Political Articles >
      • Political Witticisms
      • Memorial Day
      • Pursuing The "American Way"
      • America: Home of the Brave
      • Securing the Borders of the Americas
      • General Grant's Stand for Justice
      • America's Heartland Stands Strong
      • The New Freedom
      • Teddy Roosevelt on Socialism
    • Spiritual Articles >
      • Inauguration Day Prayer
      • Wilson's Last Words
      • Spiritual Songs
    • Fiction Articles >
      • A Father's Love
      • Introducing a Friend to God
      • Hyphenated Relationships
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