Peter Drucker

Peter Drucker (born 1909) is known as the father of modern management. A prolific writer, business consultant and lecturer, he introduced many management concepts that have been embraced by corporations around the world.

It's been said that Peter Drucker invented the discipline of management. Before he wrote his first book on the topic, he knew of only two companies in the world with management development programs. Ten years after the book's publication, 3,000 companies were teaching the subject. His management concepts, which were new when presented in the 1940s and 1950s, endure into the 21st century.

Peter Ferdinand Drucker was born November 19, 1909 in Vienna, Austria. His parents, Adolph Bertram Drucker and Caroline Bond Drucker, were well educated. Adolph was an economist and lawyer. Caroline had studied medicine and briefly worked in the field. His parents raised Drucker in an intellectual environment. They regularly hosted dinners in which guests discussed economics, literature, music, mathematics and medicine. This instilled in the young boy a lifelong curiosity.

After secondary school, Drucker moved to Hamburg, Germany and worked as a clerk-trainee for an export firm while enrolled in Hamburg University Law School. The school did not offer night classes, so Drucker learned the topic by reading books in three languages in the evenings. He earned his law degree without ever attending a class.

Drucker then traveled to Frankfurt where he worked as a financial writer. In 1931, he earned his doctorate in public law and international relations from the University of Frankfurt. Drucker soon left Germany to escape the Nazis.

He moved to London where he worked as a securities analyst for an insurance company, then an economist for a small bank. Drucker's focus shifted from economics to people while he was in London. He was attending a seminar by economist John Maynard Keynes when he "suddenly realized that Keynes and all the brilliant economics students in the room were interested in the behavior of commodities while I was interested in the behavior of people," he explained.

Drucker married Doris Schmitz in 1937 and emigrated to the United States shortly thereafter. The couple had three daughters and a son. Drucker became a United States citizen in 1943. He was attracted to the United States because of its focus on the future. He told a writer for Forbes magazine that in Europe, "all they talked about was life before 1941. I was surrounded by extinct volcanoes."

Drucker worked as a correspondent for British financial publications before becoming an economics professor at Sarah Lawrence College in Bronxville, New York. Later, he taught at Bennington College, in Vermont. Drucker later said he "teaches to find out what he thinks."

Drucker has said that writing is the foundation of everything he does. In 1937, he published his first book, which he'd written in Europe. The End of Economic Man: A Study of the New Totalitarianism, examined the spiritual and social origins of fascism. In 1940, before the United States had entered World War II, he wrote The Future of Industrial Man, in which he presented his social vision for the postwar world.

Studied General Motors

In 1943, General Motors asked Drucker to study its management practices. His colleagues advised him not to accept the offer because studying corporate management would destroy his academic reputation. Drucker did accept and spent 18 months researching and writing the 1945 book, Concept of the Corporation.

Drucker interviewed executives and workers, visited plants, and attended board meetings. While the book focused on General Motors, Drucker went on to discuss the industrial corporation as a social institution and economic policy in the postwar era. He introduced previously unknown concepts such as cooperation between labor and management, decentralization of management, and viewing workers as resources rather than costs.

Drucker claimed that an industrial society allows people to achieve their dreams of personal achievement and equality of opportunity. He referred to decentralization as "a system of local self government," in which central management tells division managers what to do, but not how to do it. The young executives are given the freedom to made decisions--and mistakes--and learn from the experience.

Top leaders at General Motors disliked the book and discouraged their executives from reading it. Many other American executives criticized Concept as a challenge to management authority. One exception was Henry Ford II. When he took over Ford Motor Company from his aging father after World War II, he used Drucker's ideas to restructure the company.

The Japanese also embraced Drucker's advice. Japan's emergence as a major economic power following World War II has, in part, resulted from the implementation of Drucker's ideas.

Wrote 30 Books

Drucker went on to become a business consultant and a prolific writer. For more than 50 years, he has counseled countless companies and written more than 30 books, which have been translated into 25 languages. His books generally break down into three areas: social and political studies, such as The Future of Industrial Man and The Age of Discontinuity: Guidelines to Our Changing Society; management books like The Practice of Management and Management: Tasks, Responsibilities, Practices; and management advice like Management for Results and The Effective Executive.

Drucker also wrote countless magazine articles for various business publications. From 1975 to 1995, he penned a monthly column in The Wall Street Journal. Many of his essays have been published as collections. He has also written two novels and a personal memoir, Adventures of a Bystander. His books reflect his diverse interests and draw from many of the topics discussed in his childhood home, including history, philosophy and medicine.

The concepts Drucker introduced in the 1940s and 1950s have endured. In 1954, Drucker wrote his first book that taught people how to manage. Titled The Practice of Management. it introduced the concept of "management by objectives." He elaborated on the concept in subsequent books. Management by objectives requires managers to establish goals for their subordinates and devise the means for measuring results. Workers are then left alone to perform as they will and measure their performance. Drucker wrote, "It is not possible to be effective unless one first decides what one wants to accomplish." He went on to explain that every worker must be given the tools "to appraise himself, rather than be appraised and controlled from the outside."

Management by objectives has become an accepted business concept and is probably Drucker's most important contribution. In The World According to Peter Drucker, Richard H. Buskirk of Southern Methodist University is quoted as saying: "His emphasis upon the results of managerial actions rather than the supervision of activities was a major contribution for it shifted the entire focus of management thought to productivity-output-and away from work efforts-input."

Timeless Advice

Business "gurus" have come and gone during the last 50 years, but Drucker's message continues to inspire managers. In March 1997, the cover of Forbes magazine featured Drucker's picture and the statement "Still the Youngest Mind." Drucker was 88 at the time. An interview in the issue outlined Drucker's enduring message. He said, "I demand in every organization in which I have anything to say that managers start with these questions: What contribution can this institution hold you accountable for? What results should you be responsible for? And then ask, 'What authority do you then need?' This is the way to build a performing institution." After delivering this advice for 50 years, one might expect that most businesses would be implementing Drucker's model for a well-managed company. But in the interview, Drucker lamented, "I only wish there were more."

During the 1990s, Drucker wrote about social, political and economic changes of the "postcapitalist" era, which he says are as profound as those of the industrial revolution. In Managing for the Future: The 1990s and Beyond (1992), Drucker discussed the emergence of the "knowledge worker"--whose resources include specialized learning or competencies rather than land, labor or other forms of capital.

In his books, lectures and interviews, the emergence of knowledge workers is just one of the demographic changes Drucker warns businesses to prepare for. Others include a decreasing birth rate in developed countries, a shift in population from rural to urban centers, shifts in distribution of disposable income and global competitiveness. Drucker believes these changes will have tremendous implications for business.

Although Drucker foresaw the effects of technology on business and the rise of Japan as an economic power, he does not equate his prognosticating with predicting the future. "I never predict," he told a writer at Forbes. "I just look out the window and see what's visible--but not yet seen." In an interview in Training and Development, it was said that Drucker "sees what others overlook."

Drucker's career as a teacher, writer and lecturer continued past the age of 90. He was a professor of management at New York University from 1950 to 1972. He has taught at the Claremont Graduate School, Claremont, California, since 1971. Claremont named its graduate center after Drucker in 1987.

The curiosity instilled in Drucker as a child led him to pursue diverse subjects. He has taught humanities, social sciences, religion, philosophy, literature, history, government, management, economics, and statistics. He has an affinity for Japanese culture. He studies, collects and teaches Japanese art. In an article in Training and Development, he claimed that he has "not found a subject yet that is not sparkling with interest." Drucker has earned more than 20 honorary degrees from universities in Europe, Japan and the United States. He has received countless awards, recognizing his contributions to the study of management.

Further Reading

• Beatty, Jack, The World According to Peter Drucker, The Free Press, 1998.
• Contemporary Authors, Gale Group, 2000.
• Gale Encyclopedia of U.S. Economic History, Gale Group, 1999.
• Newsmakers 1992, Gale Research, 1992.
• Forbes, March 1997, p. 122.
• Training and Development, September 1998, p. 22.