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effect. This statement means that in order to get a cost reduction through
putting a correct mass-production principle into effect, one must take the
products complexed inspection by using the reasonable techniques of
operations research, which is a discipline that deals with the application of
advanced analytical methods to make better decisions.
The first implemented theory stated in the book is the Organization
theory. According to Drucker in the Organization theory, Indeed,
organization theory is the main subject taught under the heading of
management in many of our business schools. The organization theory is
considered as the main subject of taught because this theory is significant
for studying organizations to identify how they solve problems and how they
maximize efficiency and productivity.
The second implemented theory is the economic theory of business or
theory of the maximization of profits. Drucker said about this theory that,
Similarly, there is total bankruptcy in the prevailing economic theory of
business enterprise and behavior: the theory of the maximization of profits
simply a complicated way of phrasing the old saw of buying cheap and
selling dear. This statement defines that the theory of maximization of
profits is a complex type theory in which the business enterprise and
behavior economic theory experience bankruptcy in a company.
The third implemented theory is the information theory. Drucker stated
about the Information theory that, These mathematical and logical tools will
include operations research, information theory, and symbolic logic. The
mathematical and logical tools will be used by a chief executive job of
tomorrow in which an Information theory is one of the tools. Information
theory is also applied for the decision-making process that uses facts,
information, analysis, and process to come to decision.
The last implemented theory is the Traditional economic theory.
Drucker said about the traditional economic theory that, What does he look
for when he buys the product? Traditional economic theory has answered this
question: price. This statement means that it is traditional for buyers to look
for the price of the product first before purchasing, but Drucker said that this
type of approach is misleading and there is a small number of products in
which price is not included in the major considerations likewise price is not a
simple complex.