Peter Drucker: What is management

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Peter Drucker What is management?

• 1909-2005

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What is management?

• Theory ?? the world
• Things change

Practice of management
Management theory
Economic theory
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Old assumption 1 management means managing a
business
At turn of 20th century

• Large public organizations
• Elihu Root U.S. Army

• Large business organizations
• Andrew Carnegie railroad, steel

Drucker Nonprofits as 21st century growth area!
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Old assumption 2 one right form of organization
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CentralizationEarly 20th Century

• Theory Henri Fayol
• Practice Andrew Carnegie
• Unitary form organization

Chief executive
finance
sales
personnel
production
engineering
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Decentralization Imid-20th century

• Alfred Sloan (GM)
• Pierre DuPont (DuPont)
• Multidivisional form of organization

Corporate HQ
Division A
Division B
Division C
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Decentralization IIPost-1980s

• LBOs, downsizing (financial)
• Delayering, flattening
• Total Quality Management (productive)
• TEAMS

?
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more on teams

• TYPES
• Product development
• Service
• Quality

• PRINCIPLES
• Toolkit approach
• Implications for people management?

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Old assumption 3 one way to manage people

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Traditional view (Theory X) People dont want
to work

• Motivation money, fear
• Frederick Taylor (early 20th) conception vs.
  execution

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Theory Y People want to do a good job

• Motivation intrinsic rewards
• Douglas McGregor (1960)

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Drucker Be flexible

• But recognize theory Y
• Especially with knowledge workers
• Motivation respect, training
• See as Associates

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Old assumption 4sharp technological boundaries

• Fixed capital-intensive processes
• Slowly evolving technologies
• Firm market boundaries
• Specialized RD, best product
• Siemens
• ATTs Bell Labs

• Knowledge-intensive processes
• Fluid technologies
• Porous market boundaries
• Best value
• Todays record industry??

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Old assumption 6multinational companies with
national bases

• Old international production
• Separate companies
• Producing separately

• New international production
• Global assembly line
• PLUS global RD, finance, service

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Ereserves tutorialhttp//library.allegheny.edu/E
Res/info/
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Old assumption 5manage within the organization

• Command control
• Own the supply chain GM (Fisher Body)
• Contract with the supply chain Sears Roebuck
• Contracts and mutual stakes Marks Spencer
  Japanese keiretsu
• Manage relationships in whole economic process

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Old assumption 7management runs the company

• Assets and people inside organization
• Relationships outside organization
• Supply chain
• Government
• Partnerships
• Demand trends
• Stakeholder management

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Ideas for the future

• The Drucker Archives