ill be a chief guiding force for the functioning and growth of the organization and information built up does not mean that organization needs a large data-processing capability. The new ways of information system generated through the application of computers will reduce the man power requirement. The raw data available through various means will be used to generate the information but the process itself will require knowledge. Knowledge is always a specialized discipline and that is why organization will need more and more specialists to convert available information into knowledge. Thus, knowledge-based organizations will, overtime, replace all command-and-control kind of business establishments.
To convey his points about information based organization, Drucker has put forward the example of British Civil Administration, which was run in India during the period of eighteenth century through World War II without any need of middle management cadre. The whole of the India was governed by merely 1000 officers heading a district administration. It was totally a flat organization structure. The officer used to report directly to the provincial political secretary. Their being total nine provinces each political secretary had at least 100 administrative officers under him to manage the show. The officer used to send a detailed report to the secretary for all the assigned tasks, the achievements and discrepancies and the detailing about the opportunities and emerging threats in the ensuing period. Political secretary would also response with full comments for necessary guidance. Peter points out about the effectiveness of such system as an organization.
What is noteworthy is that information based organizations look for simple and clear objectives. At times, there are a few common objectives for all that leads to actions and those objectives are carried out by specialists. Thus, information-based business is structured around goals and clearly defines expectations