Peter Drucker contributions to management

2. Peter Ferdinand Drucker
(Nov 19,1909-Nov 11,2005)
• Born in Vienna,Austria
• Earned Doctorate in International Law in Germany
• Moved to U.S. and became citizen in 1943
• Popularly known as “The Father of Modern Management”
• Professor at New York University (1950-1971)
• Professor at Claremont Graduate University (1971-2005)
• Awarded presidential medal of freedom by G.W.Bush (2002)
• Writer, consultant, economist (Author of 39 books and countless
popular articles about humans in business, government and non
profit world)

3. Contributions of Peter Drucker
• Management by Objectives (MBO)
A manager’s primary task is to manage for results by
translating corporate objectives into departmental, group, and individual
measures of performance.
• Federalism – Division of power
It is a concept of centralised control in decentralised
structure. He has emphasised close links between the decisions adopted
by the top management and the autonomous unit.

4. • Management Functions
Management is the organ of institution. He sees management through its tasks. Accordingly ,
There are
Three basic functions of management:
1. Managing a Business
2. Managing managers
3. Managing workers and work
Five functions of Manager:
1. Set objectives
2. Organise
3. Motivate and communicate
4. Measurement
5. Develop people

5. • Organisation Structure
He has emphasised three basic characteristics of an effective organisation
structure. These are:
1. Enterprise should be organised for performance
2. It should contain the least possible number of managerial levels
3. It must make possible the training and testing of tomorrow’s top manager
• Nature of Management
He treated management as a discipline as well as profession.The basic
objective of management is to lead towards innovation.

6. • Organisational changes
Drucker has visualised rapid changes in the society because of rapid
technological development. Though he is not resistant to change, he feels
concerned for the rapid changes and their impact on human life.
Since rapid changes are occurring in the society, human beings should
develop philosophy to face the changes and take them as challenges for making
the society better. This can be done by developing dynamic organizations
which are able to absorb changes much faster than static ones.

7. • Concept of Knowledge worker in his book “The Landmarks of
Tomorrow” in 1959.
• He is the first person to assert that workers should be treated as assets and
not as liabilities and originated the view of Corporation as a human
community in 1950.
• Drucker and Marketing :
In his most famous book “The practice of management” published
in 1954, he emphasised on 3 questions that every company should seeking a
brand must ask itself :
1. What is our business?
2. Who is our customer?
3. What does our customer consider valuable?

8. • 5 steps in decision making
1. Define the problem
2. Analyse the problem
3. Develop alternative solutions
4. Find the best solutions
5. Implement the decision
• As an economist, he emphasised
a. The importance of the non-profit sector, which he calls the
third sector (private sector) play crucial roles in the economies of
countries around the world.
b. A profound skepticism of macroeconomic theory.