Peter F. Drucker was a writer cum-management consultant who compiled quite a number of books, scholarly article in addition to popular articles. His work cuts across business, government and non-profit making sectors of the economy. Among hi many writings are predictions of development in the twentieth century which includes decentralization and privatization as well as the emergence of the information society with its necessity of life long learning. This gave way to knowledge work productivity in management.
Drucker defined management as a “liberal art” which is very diverse in terms of interdisciplinary relations in all organizations whether private or public. According to him, all institutions have a responsibility of improving the living conditions of the whole society. Therefore, business managers as leaders have a key responsibility for the common good of all members of the society failure to which the whole society will fail. When institutions engaged in social responsibility activities, the overall performance of that organization in terms of marketing and profits will be greatly enhanced. Research and the public image of any organization were also enhanced by incorporation of proper relationships among human beings.
Drucker’s contribution to management theory and practice
Drucker defines management as the organization and coordination of the activities of an enterprise in accordance with certain policies and in the achievement of clearly defined objectives. Management is included as a factor of production along with machines, materials and money such that for any business to run successfully, all the above factors must be put in place. Thus, management is all about organization and innovation in terms of the available resources. Management tends to interlock functions such as formulation of corporate policies, organization, planning, control and directing the resources of the firm (Ducker, 2003b).
According to Drucker (2007b) the private sector inclusive of major corporations as well as nonprofit institutions are the only way to achieving a stable and prosperous society. Business and private charity organizations proved to be quite ideal alternatives for socialization among individuals in the private sector and those in working outside the sector. This form of society provided opportunities for training, job security and educational opportunities. Therefore, the private sector is seen as an ideal social institution which also provided opportunities for career growth and development to the advantage of the sector.
One of the major contributions of Drucker to the management theories is modification of the concept of knowledge workers such that business executives were forced t change their ways of handling employees. Strategies to make information accessible to all employees as well as ensuring that they are treated as the most valuable asset of any business is probably a major milestone to management. This idea was based on the common perception that management is a way of making the working conditions difficult for employees such that they are unable to deliver (Ducker, 2003a).
Most managers tend to think it as being unwise to delegate duties or to subdivide management into functional categories which are under management. This has led to increased workplace democracy being advocated in order to increase delegation of duties to all workers. However, some of these models predate current political issues in the 21st century hence they occur more naturally. Management is often asked to embrace democratic principles such that workers are fully supported by management and vice versa to avoid conflicts in the workplace. Despite the move being made towards workplace democracy, command-and-control organizational structures have remained common place in the organizational structure. This is exhibited in layoffs with the managerial taskforce being affected less while the lower level employees suffer greatly from the activity. When such a situation occurs, Drucker (2003a) urges corporate leaders to agree with subordinates on company objectives, and goals by including them in the decision-making that a more appropriate approach is given achieved. This challenges the managers to search for ways of providing workers with more freedom to control their working environment. In an attempt of creating a favorable working environment, the aspect of “knowledge workers” is exploited such that the workers are made aware of their rights at work as well as available opportunities to advance their careers (Ducker, 2007a).
In as much as businesses strive to earn more profits, the management of each company should always remember that employees are resources and not expenses. Businesses which invested in they employees recorded better performances and overall profits increased as the employees were motivated. Provision of a conducive working environment was also recorded as having a greater impact on the productivity of workers. Increasing the participation of workers on the decision-making process was paramount to strict adherence to the set rules and aims in addition to their achievement. The human impact of management decisions is critical if the management as the decisions have a direct implication on the workers. Therefore, it will only be appropriate to include them in making the right decisions (Ducker, 2003a).
Marketing according to Drucker
The sole purpose of any business is to create and maintain customers. This is achieved through marketing and appropriate innovation in terms of marketing strategies. Marketing is the sole distinguishing unique function of any business and at all times it produces positive results hence benefiting the business. However, despite the fact that marketing is an important aspect of any business mast business managers tend to overlook this department. When all priorities of a business are listed, marketing appears last after sales, production and people (Ducker, 2007b).
Drucker (2007b) argues that a consumer is the most important focal point of any organization. The primary responsibility of any business is seen as striving to serve costumers by providing goods and services which will satisfy their needs. It is through consumer satisfaction that a business is able to achieve its profits. The philosophy which is applied in marketing is crucial in determining the generation and maintenance of customers. The avenue that is used to serve customers as well as providing information on how their needs will be satisfied by consuming the goods and services from that a particular company. The ability of that business to make new customers and maintain older customers is dependent on the level of innovative measures applied in production together with marketing of the products (Ducker, 2003a).
One major contribution to innovation and marketing that was proposed by Drucker was utilization of planned abandonment. Businesses which have excelled over the years should never reuse strategies that were used to obtain the success. Continued use of the same old tricks reduces the spark and creativity associated with marketing. Reusing of old tactics may lead to lose of consumer trust in the business due to lack of creativity. The perception that since a similar trick yielded positive results in the first instance does not mean that the same trick will project the same results. Marketers are bound to achieve better results if they focus on consumers in addition to incessant innovation. Marketing should be made superfluous by knowing and understanding the customer well enough such that the products and service sell themselves.
Consumer needs are always available but it is upon the marketer to create an interest in specific ways in which the product will satisfy those needs thus creating demand. Sometimes customers may not realize that they need a certain service or good but after someone has provided information about the product they may decide to try it or not to dependent on the way in which the awareness is created. Drucker poses the fact that a customer is always created by a marketer who makes their products known to the consumers.
Effective management is a key feature in measuring performance management for any given organization. A specific area of efficiency is in analysis of the ever evolving environment and laying business strategies along those lines. The nature of workplace relations among top management and other employees is fundamental in understanding the performance status of the organization. Efficiency in application and utilization of resources in the achievement of an objective is also paramount in measuring performance management. Managers are thus expected to be effective and efficient when implementing business strategies as well as goals (Ducker, 2007b).
The performance management of a business should not be limited to numbers alone but rather on various indicators such as market share, successful innovations, use of capital, customer satisfaction and productivity of all members of the business. The complexity of the entire management is essential in ensuring that all the indicators of performance are moving up at the same time. The management is only said to be performing well if an upward increase in the indicators is observed. This is achieved through intensive innovation and application of strategies which are aimed at achieving the goals or objectives set up by the business (Ducker, 2003a).
Adequate motivation of employees improves their productivity and general performance of the organization. Improved performance management results in all the workers applying more effort into maintaining the image and products of the organization. Consequently, the management will accept individual and group responsibility because of the motivation. Thus, the overall performance of the organization will be increased as well as productivity as everyone will be willing to undertake extra duties and responsibilities as a way of realizing their potential (Ducker, 2003a).
When seeking to improve the performance management of an organization, regular assessments of the current performance is essential and it should be conducted at equal intervals in all departments. The assessments should be explicit and systematic such that adequate information of various indicators is obtained. Tools such as comprehensive questionnaires and diagnostic models are used alongside results from various industry standards. When applied regularly over a given period of time, these tools yield reliable results on the performance of every such that the appropriate measures may be undertaken to improve the performance (Ducker, 2007a).
The knowledge economy
The knowledge economy is a term that was popularized by Drucker and it refers to an economy of knowledge focused on the production and management of knowledge in the scope of economic constraints. Alternatively it can be use to refer to the subsequent application of knowledge technologies to increase productivity of a business in addition to creating employment opportunities. In both aspects, knowledge has been identified as either a product or a tool of management (Ducker, 2007a).
The 21st century global economy is transitional to becoming a “knowledge economy” by including information as a crucial aspect of organizational management. In this transitional stage, success in an industry is determined by the rules and practices that are laid out in the interconnected globalized economy where knowledge is a critical resource like any other asset. Expertise and technical-know-how are quite essential in achieving preset business objectives. As the world moves towards digital and technology oriented global economies, businesses are adopting new procedures in production and marketing their products. Individuals have also gone back to school to advance on their previous professional qualifications such that everyone is striving to attain as much knowledge as possible. This is especially fundamental in differentiating the manual worker who uses his hands to produce goods and services while the knowledge worker uses his mental ability to produces ideas, knowledge in addition to information (Ducker, 2007a).
Globalization and information technology have played a pivotal role in the knowledge economy. This has been made quite equivocal by networking and increased connectivity such that the different economies in the world are closely linked together. Other than making business transactions faster, competency of human capital has been increased. Therefore, professionals have to up date their technology skills every now and then to remain competent in the competitive job market (Ducker, 2007b).
Change management and post-industrialization
When introducing change to any business, it is important that the management involves the other employees in the procedure so that combined efforts by the two groups results in sound decisions being made. It is also essential to seek clarification from parties who will be affected by the change. The appropriate procedure and parties should be included to control the intended change so that a minimal impact is felt (Ducker, 2003b).
In the 21st century, Drucker had foreseen instances in which organizational change management would align the expectations of different groups, relay information from one group to another and eventually integrate teams that will be affected by the change into training. Measures such as leader’s commitment, effective communication and the need for change are seen as ideal strategies in designing changes in an organization. These aspects are also helpful in evading change failure (Ducker, 2007b).
There are quite a number of changes that have been felt in the post-industrialization era one of them being technological changes. Advanced technological standards have led to drastic changes being made in most organizations as a way of adopting the new efficient ways of carrying out business transactions. Departments have experienced reshuffles and overhauls to incorporate modern technology and skills. Individuals who are reluctant to embrace the modern technology are laid off while those who are more competent in the area are sought (Ducker, 2003b).
Other post-industrialization changes include strategic changes in departments to crate room for expansion and incorporation of new ideas. The marketing and public relation sectors have been equally affected as they are very dynamic hence they have been streamlined to carry out specific functions (Ducker, 2003b).
Peter Ducker has really molded modern day management by incorporation of some aspects which business managers tend to ignore. The adaptation of management theories as part of the daily business activity creates an even bigger impact on the overall performance of the business. Consequently, portraying the customer as the most vital part of the business and satisfying the needs of the customers is one of the indicators of improved business performance. Aggressive and informative marketing is also presented as a substantial responsibility of business managers. Knowledge is portrayed as being crucial in any business especially in the 21st century where every aspect of business is dependent on information. Similarly, change management is a critical feature of any business enterprise especially when it incorporates other employees in the decision-making process.
Drucker, P.F. (2003a), Peter Drucker on the profession of management. Harvard Business Review
Drucker, P.F. (2003b), The age of discontinuity: guidelines to our changing society. Harper and Row publishers
Drucker, P.F. (2007a), People and performance: the best of Peter Ducker on management. Harvard Business Review
Ducker, P.F. (2007b), management: tasks, responsibilities, practices; classics in organization and management series. Transaction publishers.