Drucker has a lengthy discussion of personnel issues at the executive level but only hints at the real problem. All things are legal for me, says the prophet, but all things are not expedient. In theory, central officers have complete control over divisional executives. However, they hire and fire at their own peril. A bad decision hurts the entire division. A unpopular leader, fired at an inopportune moment sends a shudder through the organization. Am I vulnerable? Do the bosses make completely arbitrary decisions? Need I be worried? In a moment, a difficult employee can be a hero if not handled properly.
I have seen many a bad personnel decision and made several myself. The one problem that will always devastate is a group is the appearance of arbitrariness, the suggestion that you make decisions with no principles at all. I saw one recently. The boss admitted that the employee “didn’t agree with him.” With that admission, the boss may have lost all authority to make such decisions ever again. If you have to make a decision, you have to have a reason or at least be able to defend the decision as good for the group. Of course there are times, rare indeed, when you need to make a firm decision in order to enforce discipline but one should never be seduced into believing that such a tactic is regularly needed.