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TECH TALK: Peter Drucker: Managements Newton: Peter Drucker: Managements Newton: Work

November 30th, 2005 · 2 Comments

The Economist wrote about his early work:

The two most interesting arguments in The Concept of the Corporation actually had little to do with the decentralisation fad. They were to dominate his work.

The first had to do with empowering workers. Mr Drucker believed in treating workers as resources rather than just as costs. He was a harsh critic of the assembly-line system of production that then dominated the manufacturing sectorpartly because assembly lines moved at the speed of the slowest and partly because they failed to engage the creativity of individual workers. He was equally scathing of managers who simply regarded companies as a way of generating short-term profits. In the late 1990s he turned into one of America’s leading critics of soaring executive pay, warning that in the next economic downturn, there will be an outbreak of bitterness and contempt for the super-corporate chieftains who pay themselves millions.

The second argument had to do with the rise of knowledge workers. Mr Drucker argued that the world is moving from an economy of goods to an economy of knowledgeand from a society dominated by an industrial proletariat to one dominated by brain workers. He insisted that this had profound implications for both managers and politicians. Managers had to stop treating workers like cogs in a huge inhuman machinethe idea at the heart of Frederick Taylor’s stopwatch managementand start treating them as brain workers. In turn, politicians had to realise that knowledge, and hence education, was the single most important resource for any advanced society.

Business Week outlined his key ideas:

It was Drucker who introduced the idea of decentralization — in the 1940s — which became a bedrock principle for virtually every large organization in the world.

He was the first to assert — in the 1950s — that workers should be treated as assets, not as liabilities to be eliminated.

He originated the view of the corporation as a human community — again, in the 1950s — built on trust and respect for the worker and not just a profit-making machine, a perspective that won Drucker an almost godlike reverence among the Japanese.

He first made clear — still the ’50s — that there is “no business without a customer,” a simple notion that ushered in a new marketing mind-set.

He argued in the 1960s — long before others — for the importance of substance over style, for institutionalized practices over charismatic, cult leaders.

And it was Drucker again who wrote about the contribution of knowledge workers — in the 1970s — long before anyone knew or understood how knowledge would trump raw material as the essential capital of the New Economy.

Knowledge@Wharton adds:

Wide-ranging as Drucker’s contributions were to the field of management, his writings about marketing are as important, say Wharton professors. Stephen J. Hoch, chairperson of the marketing department, describes Drucker as “the Warren Buffett of management gurus. His analysis of management and marketing issues always was pithy and to the point. No pandering to buzzwords and fads, but a constancy of message, with straightforward reasoning and clearly articulated ideas. The following statement attributed to Drucker is today still the essence of marketing: ‘The aim of marketing is to make selling superfluous. (It) … is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy.'”

Tomorrow: Writings


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