Management's Origins as a Study Within the Liberal

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Management's Origins as a Study Within the Liberal

  1. 1. Origins of Management as a Liberal Art in Peter Drucker’s Writings<br />From Drucker’s Lost Art of Management<br />Joseph A. Maciariello and Karen E. Linkletter<br />
  2. 2. Is Management a study within the liberal arts?<br />Drucker understood the study of management to be a liberal art – liberal because management deals fundamentally with human nature, knowledge, and wisdom; and art because it is an applied practice.<br />The study of management is not merely vocational training. Students who study management should do so to nurture character, instill values, and develop broad skills such as critical thinking and analysis.<br />
  3. 3. The Mission of Management<br />Drucker believed the practice of management must aim to create and maintain healthy organizations in which people find meaningful existence for the betterment of society.<br />Managers must address questions of efficiency and profitability alongside questions of morality, dignity, and social well-being.<br />Through his experience of totalitarianism in the 20th century, Drucker saw the need for a functioning society based on freedom and equality and the way to prevent totalitarianism. <br />Therefore, the ultimate goal of management is not to simply run organizations efficiently, but to ensure a functioning society.<br />
  4. 4. Drucker believed individuals need meaning and purpose, which could be found through contribution to a larger organization. <br />But from where did these ideas originate?<br />
  5. 5. SørenKierkegaardDanish Philosopher 1813-1855<br />Kierkegaard was a philosopher of existentialism,which professes that individual experiences are more important than social ones (in contrast to the famous German philosopher Georg Wilhelm Friedrich Hegel).<br />Existentialism proposed individual experience is important, but that individuals must still be responsible to a higher power; that a gap will always exist between reality and an ideal world; and that faith is the only way to solve that tension.<br />Adopting these ideas, Drucker opined that a well functioning society provides individuals with the freedom and equality they need via responsibility within and to a larger organization.<br />For Kierkegaard, the answer was faith in God. For Drucker, the answer was faith in freedom and the individual. <br />
  6. 6. Friedrich Julius StahlGerman political philosopher 1802-1861<br />Stahl was lawyer, politician, and philosopher who lived through the violent overthrow of Europe’s monarchs. His writings attempt to blend the positive attributes of a monarchy with those of representative institutions, like democracy.<br />Realizing individual rights needed to somehow align with the needs of a larger society, Stahl saw that freedom should operate within the broader context of responsibility and accountability. “Freedom does not equal the freedom to do whatever one feels like regardless of the impact on others”.<br />The counterpart for Drucker is seen in MBO wherein managers have the freedom to choose their goals, but do so within the constraints of responsibility—these goals chosen should align with objectives of the organization as a whole.<br />
  7. 7. Edmund BurkeBritish parliamentarian 1729-1797<br />Similar to Stahl, Burke’s writing provided a middle ground between outright revolution and monarchial rule.<br />Burke’s witness of the violence in the French Revolution led him to caution against direct rule by the people, believing democracy needed to be constrained.<br />Drucker adopted this idea of balance, realizing the need to maintain the valuable parts of past institutions while simultaneously innovating.<br />
  8. 8. Joseph SchumpeterEconomist 1883-1950<br />Schumpeter served as Austria’s finance minister after WWI before eventually joining the faculty at Harvard. <br />As an economist, Schumpeter saw profit as the driver of entrepreneurship, which in turn leads to development. In this way, profit from innovation is not only necessary, but good for society.<br />The process of innovation creates new opportunities, which in turn replace old institutions—a process described as creative destruction.<br />Through Schumpeter’s work, Drucker understood that realizing profit through innovation was an imperative for companies, and that those who fail at this are eventually destroyed through obsolescence.<br />
  9. 9. Alfred SloanPresident and Chairman of GM 1875-1966<br />Sloan was the longstanding leader of General Motors, and helped Drucker mold his philosophical ideas on management into practice.<br />Modeled after the US Constitution, GM under Sloan launched a decentralized organization that allowed its business units to maintain autonomy and limited power of central management. This organizational model soon became widespread throughout the US.<br />Drucker and Sloan agreed that a structure which allows for freedom and equality was important, but that success was only achieved if the right people – managers with integrity and purpose – served as leaders.<br />
  10. 10. Chapter 1 Take Aways<br />Society demands functioning institutions, and it’s the role of the manager to realize this outcome.<br />Balance is necessary. Individuals matter, but their freedom must be balanced with a responsibility and accountability toward society. Although such a system will always maintain tension, it may also continuously grow and innovate. <br />Organizational structure is not enough to maintain a functioning society. Managers must understand the human condition and maintain integrity, responsibility, and accountability toward the common good.<br />

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