Or is it the other way around: Manage reality and perception will follow? Please follow our author as he plays tennis with himself, and arrives at a dialectical conclusion up in the umpire's chair.
Thesis: If indeed, following Peter Drucker, "the purpose of a business is to create a customer", then the primary goal of management is marketing. Managers need to control the perception of a business because "the aim of marketing is to know and understand the customer so well the product or service fits him and sells itself."
"Reality", from this marketing perspective, is the realization of sales, and has little to do with whether or not a product or service "really" works. As long as messages defining fitness to purpose can be created and transmitted at a reasonable cost, and as long as these messages are believed by customers and exploited by sales agents, then it's all good, right?
Marketing, outside of selective technical sectors, doesn't need to operate in the realm of logic, only in the emotional and cultural soup of a market economy, and Maslow's "hierarchy of needs". For example, marketing could be used to bring us into an informed, adult discussion of healthcare policy, but it is far easier (and clearly for some marketers, more fun) to generate tirades about "death panels" via innuendo and exploitation of ignorance.
And as anyone who lives in a corporate hierarchy can attest, one can also "solve" any management problem by careful marketing. Within most businesses, and especially politics, it often doesn't matter whether a manager is "really" correcting a problem, as long as the perception of the manager's activities is controlled. Unfortunately, manipulating human perceptions is oft times simpler and less costly than changing a product, improving a service, replacing an underperforming resource, telling the truth, following lawful conduct, or even making any kind of logical argument at all.
Antithesis: Product developers, and their close relations in manufacturing, have long known that their parts of a business can only operate effectively and efficiently if problems are "really" solved, and not just considered another problem of perception. Customers are only, over the long term, enthusiastic about products or services that not only appear to work for them, but "really" work well for them, and over the entire product's lifespan, too. Otherwise, both the customer and the product manufacturer will incur additional costs that reduce competitiveness over time.
"Reality", from the product perspective, is usually objective, often physically so, but always measurable. Isn't marketing and sales easier if the product "really" works, not just that we say it does? And in the long run, isn't that a better outcome for both producer and consumer?
Synthesis: The "manage reality" camp, technocratic, and politically elitist though it is, has a strong argument, because over the long run, it really does cost less, and generate more revenue, if you manage reality and not just perception. The American automobile industry is surely one glaring example, where marketing always came first, and product second. (Ironically, they often employed Peter Drucker, too.) Spending 17% of GNP on healthcare services is another example where realization of revenue is not consistent with long term survival, hence our mediocre public health statistics and 15% of the population uninsured.
But the "manage perception" camp, manipulative, short-sighted and politically populist though it may be, is grounded in reality also: Consumers and markets are decidedly not careful evaluators of costs and benefits, except maybe (and it's a big maybe) in the aggregate. Humans evolved innumerable heuristics to help us survive on the savannahs of Africa, and these make us biologically directed, emotionally buffeted, and drawn to magical explanations that don't require much thought. Given the hundreds of generations it took to enable our species to survive and eventually thrive, we are not likely to shed these heuristics easily. We will remain deeply "conservative", except when threatened or forced to behave differently.
The best products or services in the world will go un-consumed if purchasers don't believe they "fit". That belief must be achieved, whether by logic, an appeal to prejudice and bigotry, or marching around in a gorilla suit.
But let's hope we have the wisdom to both manage reality and perception both in their proper proportion. Marketing and the management of perception is surely necessary for the realization of sales, but it is not an end in itself, much less an assurance of long-term viability.