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Peter Drucker

Strategic Management

Reem Y.

on 4 March 2013

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Transcript of Peter Drucker

''The man who invented management'' PETER DRUCKER 1954: ''MANAGEMENT BY OBJECTIVES'' 1974: ''PLANNED ABANDONMENT'' 1959: ''KNOWLEDGE WORKER'' 1969: ''PRIVATIZATION'' 1909-2005 Major Austrian business thinker & writer from a small village in Vienna, who practically invented management as a discipline in the 1950s.

He was a writer on business management, entrepreneurship, and economics. He was a Professor at the Graduate School of Management, Claremont Graduate University, and was a consultant. After graduating from post-world war Vienna, Drucker moved to Germany in search for new opportunities.

Hamburg--> working as an apprentice at an established cotton trading company, then as a journalist, writing for The Austrian Economist

He then moved to Frankfurt, where he took a job at the Daily Frankfurter General-Anzeiger and earned a doctorate in international law and public law from the University of Frankfurt in 1931 After Hitler took power in 1933, Drucker left Germany for London, where he worked for an insurance company, then as the chief economist at a private bank

In 1934, he married an acquaintance from the University of Frankfurt in 1934 and they both immigrated to the United States where he became a university professor as well as a freelance writer and business consultant. Joseph Schumpeter Austrian Economist John Keynes British Economist Friedrich Stahl German Lawyer & Politican After becoming naturalized US citizen in 1943, he then had a distinguished career as a teacher, first as a professor of politics & philosophy at Bennington College for 5 years, then for another 20 years at NYU as a Professor of Management.

Drucker came to California in 1971, where he developed one of the country's first executive MBA programs for working professionals at Claremont Graduate University (then known as Claremont Graduate School). From 1971 until his death, he was the Professor of Social Science and Management at Claremont. 1942: ''Business Thinker’’ Career Drucker's writings on politics & society won him access to the internal workings of GM. He shared his fascination with Donaldson Brown, the mastermind behind the administrative controls at GM. A year later Brown invited him in to conduct a 2 year social-scientific "political audit" of the GM corporation.
Drucker attended every board meeting, interviewed employees, and analyzed production and decision-making processes. The resulting book, Concept of the Corporation, popularized GM's multidivisional structure and led to numerous articles, consulting engagements, and additional books.

Drucker taught that management is “a liberal art,” and he infused his management advice with interdisciplinary lessons from history, sociology, psychology, philosophy, culture and religion. He also believed that all public and private institutions have a responsibility to the whole of society. CONSULTING CAREER Through out his consulting career, Drucker worked with General Electric, Coca Cola, Citicorp, IBM, and Intel. He consulted with the notable business leaders of these companies. He also served as a consultant for various government agencies in the US, Canada and Japan and he often worked with various nonprofit organizations to help them become successful, such as the Salvation Army and the American Red Cross. The process of setting objectives so that both management and employees agree to the them and understand what they need to do in order to achieve the organization’s goals. o motivation (increases employee empowerment, job satisfaction, commitment)

o better communication & coordination

o clarity of goals

o managers can ensure all objectives are linked to the organization's objectives that are set in all departments/units (marketing, production, sales, HR) Drucker's 5 basics of the managerial role:

to set objectives
measure and develop people

........balancing a variety of needs and goals rather than subordinating an institution to a single value. An employee whose main capital is knowledge. They work with information or develop and use knowledge in the workplace through writing, analyzing, advising DRUCKER'S 6 FACTORS IN DEMAND FOR KNOWLEDGE WORKER PRODUCTIVITY (1999) That we ask the question: "What is the task?"

Knowledge workers have to manage their responsibility for productivity themselves.

Continuing innovation has to be part of the work, the task and the responsibility

Continuous learning & teaching on the part of the knowledge worker

Productivity of the knowledge worker is not in the quantity of output. Quality is at least as important.

Knowledge worker is both seen and treated as an "asset" for the organization rather than a "cost." It requires that knowledge workers want to work for the organization in preference to all other opportunities. ''The sickness of the Government''

''The government is a poor manager, it has no choice but to be bureaucratic'' proposed: ''RE-PRIVATIZATION'' policy

''A systematic policy of using the private nongovernmental organizations of society for the actual doing''

--> Giving the private sector executive responsibilities that had been private before the public sector took them over through nationalization and municipalization at the start of the 19th century DECENTRALIZATION, SIMPLIFICATION & OUTSOURCING Businesses & governments have a natural human tendency to to cling to ''yesterday's successes'' rather than seeing when they are no longer useful...

''Past success doesn't guarantee future success'' Drucker discounted the command & control model and asserted that companies work best when they are decentralized. Corporations tend to produce too many products, hire employees they don't need (when a better solution would be outsourcing), and expand into economic sectors that they should avoid. By Reem, Selin, Arantxa & Melinda DRUCKER'S IMPACT DRUCKER's name continues to have a great impact till this day and he has a strong following.

Many of the major developments that he predicted in his writings proved correct in the 20th century: especially privatization & decentralization; the rise of Japan to economic world power; the decisive importance of marketing; and the emergence of the information society with its necessity of lifelong learning.

He laid out the foundations for the practice of ''Knowledge Management'' which evolved in the 90s

Knowledge-based work has become increasingly important in businesses worldwide.

Many of his innovations have become accepted facts of managerial life. Drucker's 39 books, countless scholarly and popular articles explored how humans are organized across the business, government and the nonprofit sectors of society. He communicated his theories and expressed his ideas through his books, which have been translated into more than 30 languages and passed on to business executives and students to learn from.

The magnitude of his impact paved the way for countless books to be written about him & his works...

Managers have truly become the epicenter of economic activity Drucker's Legacy “Management will remain a basic and dominant institution perhaps as long as Western civilization itself survives.”

–Drucker (The Practice of Management) Drucker Institute Drucker was awarded the United States Presidential Medal of Freedom in July 2002 by President George W. Bush in recognition for his work in the field of management. He also received honors from the government of Austria, including the Grand Silver Medal for Services to the Republic of Austria in 1974 & the Austrian Cross of Honour for Science and Art in 1999.

In Japan (Order of the Sacred Treasure, 3rd class; 24 June 1966[58]). In 2004 Harvard Business Review honored Drucker with his 7th McKinsey Award for his article "What Makes an Effective Executive" He received 25 honorary doctorates from American, Belgian, Czech, English, Spanish and Swiss universities. His 1954 book The Practice of Management was voted the third most influential management book of the 20th century in a poll of the Fellows of the Academy of Management ''We are a social enterprise that makes people more effective, organizations more responsible and work more joyful.
We do this by turning Peter Drucker's ideas and ideals into tools that are both practical and inspiring. We do this because society is only as strong as the organizations within it.'' His legacy is reflected in the importance of the non-profit sector, today, Non-Government Organizations (NGOs) play crucial roles in countries around the world. Held in his hometown, Vienna, to honor his legacy and ideas, the Global Drucker Forum is one of the leading management congresses in Europe.
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