Financial Daily from THE HINDU group of publications
Tuesday, Nov 15, 2005


News
Features
Stocks
Shipping
Archives
Google

Group Sites

Opinion - People


A phenomenon called Peter Drucker

R. Devarajan

PETER Drucker was possibly the best-known management writer of modern times. He was hailed as the high priest of management philosophy. More than any other theoretician, Drucker defined the role and responsibility of management in a simple, straight, and sharp style.

His interests and ideas spanned the entire spectrum of management — from ethics to technology, from economics to knowledge management. He wrote 39 books, and over 100 articles. Aged 95, Drucker continued to write till his death on November 11. His last book is due for publication in early 2006.

Drucker was born in Vienna on November 19, 1909. His father was a lawyer. His early association with Joseph Schumpeter, the economist, who was a close friend of his father's, remained an enduring influence. At age 17, Drucker moved to Germany, where he obtained a doctorate in law. For a while he worked as a financial journalist in Frankfurt. He, however, returned to Austria soon after. Later, he moved to London and worked there for several years as a merchant banker. During this period, he became acquainted with John Maynard Keynes, the great British economist.

In 1937, he went to New York, and continued to teach at different locations in the US. From the 1940s, writing became his focus. It is possible to classify his intellectual journey into three distinct phases:

  • The early books on economics, such as The End of Economic Man (1939), The Future of Industrial Man (1942), and Concept of The Corporation (1946).

  • The management books written between the 1950s and the 1970s, such as The Practice of Management (1954), Managing for Results (1964), The Effective Executive (1966), and Management: Tasks, Responsibilities, Practices (1974).

  • Books on philosophy that he began writing in the mid-1970s such as The Unseen Revolution (1976), Innovation and Entrepreneurship (1985), The New Realities (1989), and Managing In A Time Of Great Change (1995). In the first phase, Drucker was concerned with the nature of the economic society and a new world that was emerging in the early 20th century. The End Of Economic Man discusses the rise of totalitarianism, and some possible responses to it by the free world.

    The Future Of Industrial Man takes the second theme forward, arguing that an industrial society and a free society can coexist, and that they are compatible and complementary to each other.

    According to Drucker, the first responsibility of any management is to produce satisfactory economic results — profits. Its second is to work in a manner that is good for society, while never attempting to take over the work of the society. Wealth and freedom, for Drucker, were necessary for a full life; one without the other is imperfect and incomplete. It is the free market which offers the best opportunity for both.

    In the next stage, Drucker delved into the mechanism of the market and made an incisive study of the Corporate. Taking General Motors (GM) as an example of a modern company, he brought under the microscope ways in which corporations and their managers performed. Concept Of The Corporation was a classic case study of GM at a time when it was the largest business house in the world. The book remains a model in management case study and research.

    It was then that the second phase of Drucker's writings began. He looked at management as a profession and discipline. The Practice of Management was his initial attempt to define management; many still regard it as his best book. It is here that Drucker introduced his famous doctrines — management by objectives and management by results. In a subsequent book, Managing for Results, he elaborated on these two tenets.

    However, there has been a school of thought — spearheaded by the Quality Management group — that criticised Drucker of making management unduly obsessive about setting targets and getting results. This is a misreading of his philosophy. Management by results is an attempt to wean managers away from their rigid and ritualistic adherence to task and routine. It creates a mindset that focuses on new and novel ways to achieve results, including quality.

    The summum bonum of Drucker's management philosophy found full expression in Management: Tasks, Responsibilities, Practices. Here, he said that machines could never replace the spark of life provided by a manager. It is the manager who breathes life into an enterprise. The primary "task" of a manager is to harness resources and create production. The secondary "task" of a manager is about guidance and control.

    Writing about the "responsibilities" of a manager, Drucker was clear and categorical in his belief that the social dimension of work can never be forgotten or forsaken. According to him, "social responsibility" is the price that must be paid by the corporate for its commercial success. Another singular contribution by Drucker is the role he assigned to managers in the domain of marketing. "There is only one valid definition of business purpose: To create a customer. Markets are not created by God, nature, or economic forces; but by the people who manage a business. Because its purpose is to create a customer, the business has two basic functions: Marketing and innovation."

    Beginning in the 1980s, Drucker led the way in the development of knowledge management. In the beginning of the 20th century, the role of managers was to coordinate the efforts of a large and low-skilled labour force. By the end of it, the workforce had become smaller, better educated, and more knowledgeable. This warranted an altogether different style of management. Drucker had the unique advantage of witnessing both these trends. Through his writings, he has left a precious legacy — the wisdom of his observation and experience of this "century-long" evolution and progress of management.

    In the third phase of his writings, Drucker made a departure from the core aspects and elements of management to focus on the impact of business administration on society. In The New Realities, he talked about the linkages among technology, economics, government, politics, and environment and how these various forces are impinging on management as a function and profession.

    Drucker also authored a historical novel. His autobiography, Adventures of a Bystander, is an eye-opener to his varied interests. He liked to portray himself as an intellectual, rather than as an academic or a pedagogue.

    While his ideas and thoughts may not have been groundbreaking every time, his ability to synthesise and communicate remain unmatched. He was able to package his thinking within an easy-to-read, conversational mode that speaks directly to the businessman, without talking down to him. Drucker walks with the reader through every page of his book. It is this exhilarating experience that wins his readers over.

    (The author is a Chennai-based freelance writer. This article has been sourced from the book Fifty Key Figures in Management, by Morgen Witzel.)

    Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



  • Stories in this Section
    More expected from SAARC


    Poverty, not just an economic phenomenon
    Student unions: Time for a rethink?
    Three models to make your company mega
    A phenomenon called Peter Drucker
    Upgrading management institutes
    PSU disinvestment
    Interesting and informative
    Trading techniques
    Cultivating business


    The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
    Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

    Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line