Peter Ferdinand Drucker

It's been said that Peter Drucker invented the discipline of management. Before he wrote his first book on the topic, he knew of only two companies in the world with management development programs. Ten years after the book's publication, 3,000 companies were teaching the subject. His management concepts, which were new when presented in the 1940s and 1950s, endure into the 21st century.

Early Life History

Peter Ferdinand Drucker was born November 19, 1909 in Vienna, Austria. His parents, Adolph Bertram Drucker and Caroline Bond Drucker, were well educated. Adolph was an economist and lawyer. Caroline had studied medicine and briefly worked in the field. His parents raised Drucker in an intellectual environment. They regularly hosted dinners in which guests discussed economics, literature, music, mathematics and medicine. This instilled in the young boy a lifelong curiosity. After secondary school, Drucker moved to Hamburg, Germany and worked as a clerk-trainee for an export firm while enrolled in Hamburg University Law School. The school did not offer night classes, so Drucker learned the topic by reading books in three languages in the evenings. He earned his law degree without ever attending a class. Drucker married Doris Schmitz in 1937 and immigrated to the United States shortly thereafter. The couple had three daughters and a son. Drucker became a United States citizen in 1943. He was attracted to the United States because of its focus on the future. He told a writer for Forbes magazine that in Europe, "all they talked about was life before 1941. I was surrounded by extinct volcanoes."

Career

Drucker then traveled to Frankfurt where he worked as a financial writer. In 1931, he earned his doctorate in public law and international relations from the University of Frankfurt. Drucker soon left Germany to escape the Nazis.He moved to London where he worked as a securities analyst for an insurance company, then an economist for a small bank. Drucker's focus shifted from economics to people while he was in London. He was attending a seminar by economist John Maynard Keynes when he "suddenly realized that Keynes and all the brilliant economics students in the room were interested in the behavior of commodities while I was interested in the behavior of people," he explained.

Drucker worked as a correspondent for British financial publications before becoming an economics professor at Sarah Lawrence College in Bronxville, New York. Later, he taught at Bennington College, in Vermont. Drucker later said he "teaches to find out what he thinks."Drucker has said that writing is the foundation of everything he does. In 1937, he published his first book, which he'd written in Europe. The End of Economic Man: A Study of the New Totalitarianism, examined the spiritual and social origins of fascism. In 1940, before the United States had entered World War II, he wrote The Future of Industrial Man, in which he presented his social vision for the postwar world.

Role as a Researcher

In 1943, General Motors asked Drucker to study its management practices. His colleagues advised him not to accept the offer because studying corporate management would destroy his academic reputation. Drucker did accept and spent 18 months researching and writing the 1945 book, Concept of the Corporation. Drucker interviewed executives and workers, visited plants, and attended board meetings. While the book focused on General Motors, Drucker went on to discuss the industrial corporation as a social institution and economic policy in the postwar era. He introduced previously unknown concepts such as cooperation between labor and management, decentralization of management, and viewing workers as resources rather than costs.

Drucker claimed that an industrial society allows people to achieve their dreams of personal achievement and equality of opportunity. He referred to decentralization as "a system of local self government," in which central management tells division managers what to do, but not how to do it. The young executives are given the freedom to made decisions - and mistakes - and learn from the experience. Top leaders at General Motors disliked the book and discouraged their executives from reading it. Many other American executives criticized Concept as a challenge to management authority.

Role as a Writer

Drucker went on to become a business consultant and a prolific writer. For more than 50 years, he has counseled countless companies and written more than 30 books, which have been translated into 25 languages. His books generally break down into three areas: social and political studies, such as The Future of Industrial Man and The Age of Discontinuity: Guidelines to Our Changing Society; management books like The Practice of Management and Management: Tasks, Responsibilities, Practices ; and management advice like Management for Results and The Effective Executive. Drucker also wrote countless magazine articles for various business publications. From 1975 to 1995, he penned a monthly column in The Wall Street Journal. Many of his essays have been published as collections. He has also written two novels and a personal memoir, Adventures of a Bystander. His books reflect his diverse interests and draw from many of the topics discussed in his childhood home, including history, philosophy and medicine.

The concepts Drucker introduced in the 1940s and 1950s have endured. In 1954, Drucker wrote his first book that taught people how to manage Titled “The Practice of Management”. It introduced the concept of "management by objectives." He elaborated on the concept in subsequent books. Management by objectives requires managers to establish goals for their subordinates and devise the means for measuring results. Workers are then left alone to perform as they will and measure their performance. Drucker wrote, "It is not possible to be effective unless one first decides what one wants to accomplish." He went on to explain that every worker must be given the tools "to appraise himself, rather than be appraised and controlled from the outside."Management by objectives has become an accepted business concept and is probably Drucker's most important contribution. In “The World According to Peter Drucker”, Richard H. Buskirk of Southern Methodist University is quoted as saying: "His emphasis upon the results of managerial actions rather than the supervision of activities was a major contribution for it shifted the entire focus of management thought to productivity-output-and away from work efforts-input."

Basic Ideas

Several ideas run through most of Drucker's writings:

Decentralization and simplification

Drucker discounted the command and control model and asserted that companies work best when they are decentralized. According to Drucker, corporations tend to produce too many products, hire employees they don't need (when a better solution would be outsourcing), and expand into economic sectors that they should avoid.

Respect of the worker

Drucker believed that employees are assets and not liabilities. He taught that knowledge workers are the essential ingredients of the modern economy. Central to this philosophy is the view that people are an organization's most valuable resource and that a manager's job is to prepare and free people to perform.

Management by Objective

Peter Ducker focuses on the need to manage business by balancing a variety of needs and goals, rather than subordinating an institution to a single value. This concept of management by objectives forms the keynote of his 1954 landmark The Practice of Management.

Customer as a Prime Responsibility

A company's primary responsibility is to serve its customers. Profit is not the primary goal, but rather an essential condition for the company's continued existence.