A
It has 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. Widely considered the father of “modern management,” Drucker authored 39 books and numerous scholarly and popular articles exploring how humans are organized in all sectors of society—business, government, and the nonprofit world. His writings anticipated many major developments of the late twentieth century, including privatization and decentralization; the rise of Japan as a world economic power; the decisive importance of marketing; and the emergence of the information society with its necessity of lifelong learning.
B
Drucker believed that writing was the foundation of all his work. His first book, The End of Economic Man: A Study of the New Totalitarianism, was published in 1937 in Europe and examined the spiritual and social origins of fascism. In 1940, before the United States entered World War II, he published The Future of Industrial Man, offering a social vision for the postwar world. In 1943, General Motors invited Drucker to study its management practices. He accepted and spent 18 months researching and writing Concept of the Corporation, published in 1945.
C
The ideas Drucker introduced in the 1940s and 1950s have had lasting influence. In 1954, he published The Practice of Management, his first book focused on teaching people how to manage. It introduced the concept of “management by objectives,” which encourages managers to set clear goals for their employees and establish methods of measuring performance. Workers are then trusted to achieve the goals independently. Drucker argued that effectiveness requires first deciding what one wants to accomplish. He further asserted that every worker should be given tools to evaluate themselves rather than be evaluated and controlled from the outside. This concept remains one of Drucker’s most significant contributions to management. He also challenged traditional roles, stating that middle managers would increasingly have to work across departments and cultures, and that top management bears the responsibility of setting direction and managing core values.
D
Drucker conducted interviews, visited manufacturing plants, and attended board meetings. While Concept of the Corporation focused on General Motors, Drucker used it to discuss broader issues like economic policy and the role of industrial corporations as social institutions. He introduced groundbreaking ideas such as cooperation between labor and management, decentralization, and the view that employees are valuable resources, not merely costs. Drucker believed that giving workers more involvement and satisfaction would enhance customer service and individual potential. He maintained that managing an organization required balancing diverse needs and goals, not subordinating it to a single objective. He referred to decentralization as “a system of local self-government,” where division managers are told what to do, not how to do it, thus allowing them to make—and learn from—mistakes. However, top leaders at General Motors disliked the book and discouraged their staff from reading it. Many executives also criticized it for challenging managerial authority.
E
Drucker was not without his critics. In 1987, The Wall Street Journal reviewed several of his lectures and found some factual inaccuracies. For instance, he incorrectly claimed that English was the official language of all employees at Japan’s Mitsui trading company. Nonetheless, he was often praised for his foresight. He predicted that the financial center of the United States would shift from New York to Washington, a forecast that seems increasingly accurate given recent government involvement in financial markets. Some critics, however, argue that his hallmark idea—management by objectives—has limitations. They point out that it is difficult to implement and often leads companies to focus too much on control at the expense of creativity. Drucker, however, was not afraid of controversy.
F
Throughout his career, Drucker insisted that management was “a liberal art” and infused his advice with insights from history, sociology, psychology, philosophy, culture, and religion. He believed that all institutions, including private businesses, had a responsibility to society. In 1973, he wrote: “In modern society, there is no other leadership group but managers. If the managers of our major institutions, especially in business, do not take responsibility for the common good, no one else can or will.” Among the demographic changes Drucker warned businesses to prepare for were declining birth rates in developed countries, increasing urbanization, changes in income distribution, and growing global competitiveness. He was skeptical of macroeconomic theory, arguing that economists of all schools failed to explain vital aspects of modern economies. While many business “gurus” have come and gone, Drucker’s influence has endured. In the 1990s, he explored the “postcapitalist” era and the rise of the “knowledge worker,” whose primary resource is specialized knowledge rather than land, labor, or capital. In Managing for the Future: The 1990s and Beyond (1992), Drucker asserted that these changes were as significant as the industrial revolution itself.