The Essential Drucker by Peter Drucker - Book Review


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Peter Drucker - Rightfully known as the Father of Management has written over 39 books and has been honoured by prestigious awards including the Presidential Medal of Freedom in 2002. The book "The Essential Drucker" is a compilation of 26 chapters from Drucker's 60 years of work.It takes you through Peter Drucker's thoughts on Management and the values that differentiate great managers from good. In a nutshell;, the book talks about the origins of management, how organizations have evolved, what drives them, what kind of data is needed by executives in the modern day functioning and what qualities are required to be developed to move from Good to great. These qualities include, leadership, good communication, time management, accountability etc.
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The Essential Drucker by Peter Drucker - Book Review

  1. 1. Book Review on 'TheEssential Drucker'
  2. 2. Introduction
  3. 3. Born November 19, 1909 (Died November 11, 2005) Place of Birth Kaasgraben, Austria Graduated from University of Frankfurt Occupation Management consultant, educator and author Number of Books Written 39 Awards and Honors Presidential Medal of Freedom (2002), Grand Silver Medal for Services to the Republic of Austria (1974), Grand Gold Decoration for Services to the Republic of Austria (1991) Worked at Bennington College (1942 - 1949), Professor of Management at New York University (1950 - 1971), About Peter F. Drucker
  4. 4. The Essential Drucker
  5. 5. Selection of 26 chapters from Drucker’s sixty years of work Compiled by Drucker’s Japanese friend Atsuo Ueda Edited by Cass Canfield Jr. for USA and UK Aim of the book is to provide an introduction to management via Drucker’s work About The Book
  6. 6. Origins of Management
  7. 7. The World War II – FirstExampleof Management in Action Troops • One fifth of the Population of all other belligerents combined • Had almost as many men in uniforms War Material • Produced more war material than others combined Transportation • Managed to transport men and arms on fighting fronts as far as China, Russia, India, Africa and western Europe Allies Won – Their Victory Achieved by Achieved by Management
  8. 8. Accountabilityin Management
  9. 9. Peter Drucker Believes ThatManagement… Is not Solely about Short Term gainsto Stakeholders It has to be accountable for Performance Should bein charge of defining Performance Should bein charge of measuring Performance Should Ensure that Performance is enforced
  10. 10. Dimensionsof Management
  11. 11. Dimensionsof Management Establish Mission or Mission or Objective Objective for a Business Makework work Productiveand eandWorker Worker Effective Manage Social SocialImpacts Impacts and andSocial Responsibilities
  12. 12. Purpose & Objective of a Business
  13. 13. Purpose of a Business Marketing Innovation Main Purpose is Purpose is to toCreate a Customer
  14. 14. What it takes toDefine Objectives Objectives areneeded in all areas onwhich areas onwhich survival of business depends Objectives must makepossible concentration of concentration of resources and efforts Objectives must be operational and capable of and capable of being converted into specific into specific targets Objectives must bedriven from What our What our Business is , what it will beand what it be and what it should be
  15. 15. ObjectivesMust Be Set in FollowingKeys Marketing HumanResources PhysicalResources SocialResponsibility Innovation FinancialResources Productivity ProfitRequirement
  16. 16. Social& EnvironmentalImpacts
  17. 17. Social& EnvironmentalImpacts ResponsibilityforImpacts –The FirstJob The FirstJob of Managementisto Managementisto IdentifyImpacts. Dealwith Impacts – Elimination of Elimination of Impact intoopportunity opportunityshould be attempted.If it attempted.If itcannot bedone, finda done, finda regulation. SocialProblemsBusinessOpportunities Opportunities– SocialProblems Problemsrepresentchallengesandare a challengesand are a sourceof of opportunity. LimitsofSocialResponsibility –Social Responsibility– Socialresponsibility responsibilitycannot befulfilledby a fulfilledby a businesswithout minimum withoutminimum profitability. LimitsofAuthority – Management Managementshouldresistresponsibility responsibilityof a socialproblem that problem thatwould compromisethe compromisethe performanceof the performanceof the business. Ethicsof Responsibility– The social The socialresponsibilityshould betaken shouldbe taken up in everydayhonesty everydayhonestyand social responsibilityshouldnot be forced upon forced uponanyone.
  18. 18. InformationExecutivesNeed Today • Traditional cost accounting measure what measure what it cost to do something. Traditional to activity activity based cost accounting • It is not enough to only know the cost of the cost of internal operations. Legal Fiction To Economic Economic Reality • Management Should use tools such as tools such as Cash-flow, Liquidity Liquidity Projections, productivity productivity measurements, benchmarking etc. to gain information information necessary information for an information for an enterprise to create to create wealth Information For wealth wealth Creation.
  19. 19. Management byObjectives& Self-Control Objective MultiplePeoplehave havedifferent contributionstowards… Shouldbederivefrom fromgoalsofthebusiness businessenterprise Managermustbeableto abletomeasurehis hisperformanceagainst againsthisbusinessgoals. Managementshould shouldutilizereportsand reportsand proceduresto procedurestoensureself- ensureself-control controltowards…
  20. 20. PickingPeople –The Basic Rules Thinkthrough the assignment assignment andunderstand understand the job description. Look at a number of potentially qualified people. Thinkhardabout how to look how to look at thecandidates candidates andif they fit into they fit intothe assignment. Discuss each of the candidate candidate with several people several people whohave haveworked with them. Make surethe appointee appointee understands the understands the job..
  21. 21. The EntrepreneurialBusiness The Don’ts on an Entrepreneurial Entrepreneurial Businesses Donotmix management managementunits and units andentrepreneurial entrepreneurialunits units together Innovationbetternotbe notbe diversification. An diversification. An existingbusinessmust mustinnovate whereit whereit hasexpertise Avoid makingone’s own one’sownbusiness business entrepreneurial entrepreneurialby by acquisition as the themanagersofthe the acquired companyare companyare morelikely morelikely to leave.
  22. 22. New Venture
  23. 23. A New Venture has FollowingRequirements Focus on The TheMarket • The new venture needs to build in systematic practices to remind itself that a product or a services is that a product or a services is defined by the customer not by the producer. It needs to work producer. It needs to work continuously in respect to the utility and value that its product or services value that itsproduct orservices contributetocustomers. FinancialForesight • The new venture needs cash flow analysis, cash flow forecasts and cash management. A growing new cash management. A growing new venture should know twelve months ahead of time how much cash ahead oftimehow muchcash itwillneed,whenandfor what purposes. Buildinga Top Management • Once the business starts growing, it needs a management team at the top. Goal and objectives for each top.Goal andobjectives foreacharea needs tobe set.Also founder has tolearn tobe becomeleaderof has tolearn tobebecome leaderof a teamrather than starwith helpers.
  24. 24. Effectiveness
  25. 25. Effectiveness Must be Learned Why we need Effectiveness? Whois an executive? Executive Realities The Promise of Effectiveness CanEffectiveness be learned?
  26. 26. Contribution
  27. 27. Focus on Contribution
  28. 28. Concentrate on your Strengths Work on improving your strengths Identify where intellectual arrogance causes disabling ignorance Remedy your Bad Habits Waste as little effort as possible on improving areas of low competence What are My strengths
  29. 29. One is a Reader or listener? How one learns? Whether one perform well under stress? Do not try to change yourself!! How do I Perform
  30. 30. What are my Values? Where do I belong?
  31. 31. Record time Manage time Consolidate Time Know Your Time
  32. 32. EffectiveDecisions
  33. 33. The DecisionProcess Realization of situation whether whethergeneric oranexception. Clear specification as to what whatdecision hastoaccomplish. Convertingthedecision intoaction. Feedback has to be built into the built into the decision to have a have a continual testing against againstactualevents The Decision Process
  34. 34. Communications
  35. 35. Fundamentals ofCommunication Communication Communication is Perception Communication Makes Demands Communication and and Information Communication is is Expectation
  36. 36. Qualitiesof a Leader The foundation of effective leadership is thinking through the organization's mission, defining it and establishing it mission, defining itandestablishing itclearly.The leader sets goals,defines priorities andmaintainsthe standards. He makes compromises with constraints of reality which arecompatible with mission and goals. Theleader sees leadership asresponsibility rather thanrankandprivilege. Effective leader encourages hissubordinates, pushes them andgloriesthem. He sees subordinates as histriumphs rather than threats. Effective leader hold himself ultimately responsible for themistakes of his subordinates. subordinates. The final requirement of leadership is trust. The only definition of a leader is someone who has followers. Trust is the someone who hasfollowers. Trust isthe conviction thatthe leader means what he says. says.
  37. 37. Innovation
  38. 38. Principlesof Innovation SystematicInnovationbeginswith the beginswiththe analysisof the theopportunities. An Innovationto beeffectivehasto be has tobe simpleand ithas tobe focused. EffectiveInnovationstartsmall.It should small.It shouldtry to doone specific specificthing.Itmay be to enablea enablea moving traindraw electric electricpower whileit runs alongrails Innovationiswork. It requires requiresknowledge. Innovators rarely Innovators rarelywork more than one than one area.An Innovatorin financial in financialareais unlikelyto bring to bring innovationsinhealthcare. To succeedinnovatorsmust buildon buildon theirstrengths.Innovators look Innovators lookat opportunitiesthatfits opportunitiesthat fitsthe company, puts company, puts towork whatit isgoodat itisgood atand haveshown capacityfor capacityforperformance.
  39. 39. Thank You Name Roll Number Almog Ramrajkar 41 Vaibhav Sawant 55 Naresh Naik 31 Preeti Patel 33