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    Saturday, December 10, 2005

    Drucker Opinion Essays from the WSJ

    The Wall Street Journal has posted selected opinion essays by Peter Drucker along with several tributes to Drucker.

    The Five Deadly Business Sins, 1993:

    • the worship of high profit margins and of "premium pricing"
    • mispricing a new product by charging "what the market will bear
    • cost-driven pricing
    • slaughtering tomorrow's opportunity on the altar of yesterday
    • feeding problems and starving opportunities

    Is Executive Pay Excessive?, 1977. In 1977, his answer was, no. As pay did become excessive, Drucker became a prominent voice against the unjust pay of CEO's.

    Economically, [the] few very large executive salaries are quite unimportant. Socially, they do enormous damage. They are highly visible and highly publicized. And they are therefore taken as typical, rather than as the extreme exceptions they are.

    In 1977, he was mainly worried about "the public" rising against excessive executive pay when there was no systemic problem. He didn't seem to foresee the problem of other CEO's believing they were entitled to such unjust pay and creating the crisis of leadership this caused later in his career. Of course the entitlement culture was not a widely held view at that point.

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