Peter Drucker

==Work and philosophy==

===Early influences===
Among Drucker's early influences was the Austrian economist [[Joseph Schumpeter]], a friend of his father's, who impressed upon Drucker the idea of the importance of innovation and entrepreneurship.<ref>Beatty, Jack. ''The World According to Peter Drucker'', 1998, p. 163.</ref> Drucker was also influenced, in a much different way, by [[John Maynard Keynes]], whom he heard lecture in 1934 in [[Cambridge]].<ref>Drucker, Peter F. ''The Ecological Vision: Reflections on the Human Condition'', 1993, p. 75.</ref> "I suddenly realized that Keynes and all the brilliant economic students in the room were interested in the behavior of commodities", Drucker wrote, "while I was interested in the behavior of people".<ref>Drucker, Peter F., ''The Ecological Vision'', 1993, pp. 75–76.</ref>

Over the next 70 years, Drucker's writings would be marked by a focus on relationships among human beings, as opposed to the crunching of numbers. His books were filled with lessons on how organizations can bring out the best in people, and how workers can find a sense of community and dignity in a modern society organized around large institutions.<ref name="druckerinstitute.com"/> As a business consultant, Drucker disliked the term "guru", though it was often applied to him; "I have been saying for many years", Drucker once remarked, "that we are using the word 'guru' only because '[[charlatan]]' is too long to fit into a headline."<ref>"Peter Drucker, the man who changed the world", ''Business Review Weekly'', September 15, 1997, p. 49.</ref>

As a young writer, Drucker wrote two pieces&nbsp;– one on the conservative German philosopher [[Friedrich Julius Stahl]] and another called "''[http://ccdl.libraries.claremont.edu/cdm4/item_viewer.php?CISOROOT=/dac&CISOPTR=3415&CISOBOX=1&REC=1 The Jewish Question in Germany]''"&nbsp;– that were burned and banned by the [[Nazi Party|Nazis]].<ref name="bw2005"/>  In 1939 he published a contemporary analysis of the rise of fascism called "The End of Economic Man".  This was his first book, published in New York, in English.  In the introduction he refers to "[[Jewish Question|The Jewish Question in Germany]]" saying "An early excerpt [of this book] was published as a pamphlet by an Austrian Catholic and Anti-Nazi in ... 1936".<ref>"The End of Economic Man, Introduction to the Transaction Edition" Transaction Publishing, 2009. Drucker was among the 2,300 names of prominent persons listed on the [[Nazi]]s' [[The Black Book (list)|Special Search List]], of those who were to be arrested on the invasion of Great Britain and turned over to the [[Gestapo]].</ref>

===The "business thinker"===
Drucker's career as a business thinker took off in 1942, when his initial writings on politics and society won him access to the internal workings of [[General Motors Corporation|General Motors (GM)]], one of the largest companies in the world at that time. His experiences in Europe had left him fascinated with the problem of authority. He shared his fascination with [[Donaldson Brown]], the mastermind behind the administrative controls at GM. In 1943 Brown invited him in to conduct what might be called a "political audit": a two-year social-scientific analysis of the 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 [[Multi-divisional form|multidivisional structure]] and led to numerous articles, consulting engagements, and additional books. GM, however, was hardly thrilled with the final product. Drucker had suggested that the auto giant might want to re-examine a host of long-standing policies on customer relations, dealer relations, employee relations and more. Inside the corporation, Drucker's counsel was viewed as hypercritical. GM's revered chairman, [[Alfred Sloan]], was so upset about the book that he "simply treated it as if it did not exist," Drucker later recalled, "never mentioning it and never allowing it to be mentioned in his presence."<ref>Drucker, Peter F., ''Adventures of a Bystander'', p. 288, (1979)</ref>

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.<ref name="druckerinstitute.com"/> He also believed strongly that all institutions, including those in the private sector, have a responsibility to the whole of society. "The fact is," Drucker wrote in his 1973 ''Management: Tasks, Responsibilities, Practices'', "that in modern society there is no other leadership group but managers. If the managers of our major institutions, and especially of business, do not take responsibility for the [[common good]], no one else can or will."<ref>Drucker, Peter F., ''Management: Tasks, Responsibilities, Practices'', 1973, p. 325.</ref>

Drucker was intrigued by employees who knew more about certain subjects than their bosses or colleagues, and yet had to cooperate with others in a large organization. Rather than simply glorify the phenomenon as the epitome of human progress, Drucker analyzed it, and explained how it challenged the common thinking about how organizations should be run.

His approach worked well in the increasingly mature business world of the second half of the twentieth century. By that time large corporations had developed the basic manufacturing efficiencies and managerial hierarchies of [[mass production]]. Executives thought they knew how to run companies, and Drucker took it upon himself to poke holes in their beliefs, lest organizations become stale. But he did so in a sympathetic way. He assumed that his readers were intelligent, rational, hardworking people of goodwill.<ref>http://rlaexp.com/studio/biz/conceptual_resources/authors/peter_drucker/what-executives-should-remember.pdf {{bare URL PDF|date=April 2023}}</ref> If their organizations struggled, he believed it was usually because of outdated ideas, a narrow conception of problems, or internal misunderstandings.

Drucker developed an extensive consulting business built around his personal relationship with top management. He became legendary among many of post-war Japan's new business leaders trying to rebuild their war-torn homeland. He advised the heads of [[General Motors]], [[Sears]], [[General Electric]], [[W. R. Grace and Company|W.R. Grace]] and [[IBM]], among many others. Over time he offered his management advice to nonprofits like the [[American Red Cross]] and the [[Salvation Army]]. His advice was eagerly sought by the senior executives of the [[Adela Investment Company]], a private initiative of the world's multinational corporations to promote investment in the developing countries of [[Latin America]].<ref>{{cite news| url=https://www.forbes.com/sites/drucker/2012/09/11/how-to-consult-like-peter-drucker/ | work=Forbes | first=Rick | last=Wartzman |title= How to Consult Like Peter Drucker}}</ref>

===Writings===
Drucker's 39 books have been translated into more than thirty-six languages. Two are novels, and one&nbsp;– ''Adventures of a Bystander'' (1978)&nbsp;– is an [[autobiography]]. He is the co-author of a book on [[Japanese painting]], and made eight series of educational films on management topics. He also penned a regular column in the ''[[Wall Street Journal]]'' for 10 years and contributed frequently to the ''[[Harvard Business Review]]'', ''[[The Atlantic Monthly]]'', and ''[[The Economist]]''.

His work is especially [[Big in Japan (phrase)|popular in Japan]], even more so after the publication of "[[Moshidora|What If the Female Manager of a High-School Baseball Team Read Drucker's ''Management"'']], a novel that features the main character using one of his books to great effect, which was also adapted into an anime and a [[Moshidora (film)|live action film]].<ref>[https://www.economist.com/node/16481583 Drucker in the dug-out], A Japanese book about Peter Drucker and baseball is an unlikely hit, ''The Economist'', July 1, 2010</ref> His popularity in Japan may be compared with that of his contemporary [[W. Edwards Deming]].<ref>''Outcome-Based Religions: Purpose-Driven Apostasy,'' Mac Dominick, "The quest begins by looking into the lives of two men, Edwards Deming and Peter Drucker. Deming (now deceased) and Drucker (in his mid 90s) are enshrined as internationally renowned experts in business management and gurus of business methodology. These two individuals were among the primary players in a select group of Americans (Though Drucker is a U.S. citizen, he is actually Austrian.) who are lauded as part of the almost super-human effort that developed systems-based management philosophies that first gained public recognition in post-World War II Japan. The popular story is told of the Americans who developed a cutting edge business methodology that was rejected by western business but eagerly embraced by the Japanese.", quoted at [http://www.crossroad.to/Quotes/TQM.html Total Quality Management (TQM)]</ref>

===Key ideas===
* [[Decentralization]] and simplification.<ref>{{cite news|last=Buchanan|first=Leigh|title=Peter Drucker from A to Z|url=http://www.inc.com/articles/2009/11/drucker.html|access-date=March 12, 2012|newspaper=Inc. magazine|date=November 19, 2009}}</ref> Drucker discounted the [[Command and control (management)|command and control]] model and asserted that companies work best when they are decentralized. According to Drucker, corporations tend to [[Overproduction|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.
* The prediction of the decline and marginalization of the "[[blue collar]]" worker.<ref>{{cite news|last=Drucker|first=Peter|title=The Age of Social Transformation|url=https://www.theatlantic.com/past/docs/issues/95dec/chilearn/drucker.htm|access-date=March 12, 2012|newspaper=The Atlantic|date=November 1994}}</ref>
* The concept of what eventually came to be known as "[[outsourcing]]".<ref>{{cite news|last=Wartzman|first=Rick|title=Insourcing and Outsourcing: the Right Mix|url=http://www.businessweek.com/managing/content/feb2010/ca2010024_507452.htm|archive-url=https://web.archive.org/web/20100210044752/http://www.businessweek.com/managing/content/feb2010/ca2010024_507452.htm|url-status=dead|archive-date=February 10, 2010|access-date=March 12, 2012|newspaper=Bloomberg Businessweek|date=February 5, 2010}}</ref> He used the example of "front room" and "back room" of each business: a company should be engaged in only the front room activities that are critical to supporting its [[core business]]. Back room activities should be handed over to other companies, for whom these tasks are the front room activities.
* The importance of the nonprofit sector,<ref>{{cite news|last=Drucker|first=Peter|title=What Business Can Learn from Nonprofits|url=http://hbr.org/1989/07/what-business-can-learn-from-nonprofits/ar/1|access-date=March 12, 2012|newspaper=Harvard Business Review|date=July 1989}}</ref> which he calls the third sector (the private and government sectors being the first two). Non-Governmental Organizations (NGOs) play crucial roles in the economies of countries around the world.
* A profound skepticism of [[macroeconomic]] theory.<ref>{{cite news|last=Drucker|first=Peter|title=Schumpeter And Keynes|url=https://www.forbes.com/2007/10/10/schumpeter-keynes-economics-biz-cz_pd_1011schumpeter.html|access-date=March 12, 2012|newspaper=Forbes|date=May 23, 1983}}</ref> Drucker contended that economists of all schools fail to explain significant aspects of modern economies.
* A lament that the sole focus of microeconomics is [[price]]. Drucker noted that microeconomics fails to show what products actually do for us,<ref>Drucker, P.F., ''Innovation and Entrepreneurship'', p. 250 (1985)</ref> thereby stimulating commercial interest in how to calculate what products actually do for us from their price.
*Economic chain costing: the idea that a competitive company needs to know the costs of its entire economic chain, not simply the costs for which it is responsible as an individual business within that chain. "What matters ... is the economic reality, the costs of the entire [production] process, regardless of who owns what."<ref>Quoted in Watson, Gregory H., [https://www.academia.edu/32677662/Peter_F_Drucker_Delivering_Value_to_Customers Peter F. Drucker: Delivering Value to Customers], ''Quality Progress'', May 2002, accessed February 23, 2021</ref>
*[[Skills management|Respect for the worker]]: Drucker believed that employees are assets, not liabilities. He taught that knowledgeable workers are the essential ingredients of the modern economy, and that a hybrid management model is the sole method of demonstrating an employee's value to the organization. Central to this philosophy is the view that people are an organization's most valuable resource, and that a manager's job is both to prepare people to perform and to give them freedom to do so.<ref>Drucker, P. F., Collins, J., Kotler, P., Kouzes, J., Rodin, J., Rangan, V. K., et al., ''The Five Most Important Questions You Will Ever Ask About your Organization'', p. xix (2008)</ref>
* A belief in what he called "the sickness of government". Drucker made nonpartisan claims that government is often unable or unwilling to provide new services that people need and/or want, though he believed that this condition is not intrinsic to the form of government. The chapter "The Sickness of Government",<ref>{{cite book|last=Drucker|first=Peter|title=The Age of Discontinuity|year=1969|publisher=Harper & Row|location=New York|url=https://books.google.com/books?id=1Zp7_rJ1vcMC&q=drucker+%22sickness+of+government&pg=PR12|isbn=978-1-56000-618-3}}</ref> in his book ''The Age of Discontinuity'', formed the basis of [[New Public Management]],<ref>{{cite book|last=Pollitt and Bouckaert|first=Christopher and Geert|title=Public Management Reform|year=2011|publisher=Oxford University Press|location=New York|pages=38|url=https://books.google.com/books?id=epPWAutxrFQC&q=drucker&pg=PP2|isbn=978-0-19-959508-2}}</ref> a theory of public administration that dominated the discipline in the 1980s and 1990s.
* The need for "planned [[Abandonment (legal)|abandonment]]". Businesses and governments have a [[sunk cost|natural human tendency]] to cling to "yesterday's successes" rather than seeing when they are no longer useful.<ref>{{cite book|last=Drucker|first=Peter|title=Management: Tasks, Responsibilities, Practices|year=1974|publisher=HarperCollins|location=New York|pages=84–85|url=https://books.google.com/books?id=9a5SAlaY-X4C&q=drucker%20%22planned%20abandonment%22&pg=PA84|isbn=978-0-7506-4389-4}}</ref>
* A belief that taking action without thinking is the cause of every failure.
* The [[sense of community|need for community]]. Early in his career, Drucker predicted the "end of economic man" and advocated the creation of a "plant community",<ref>{{cite book|last=Drucker|first=Peter|title=The Future of Industrial Man|year=1942|publisher=The John Day Company|location=New York|pages=205|url=https://books.google.com/books?id=sqSDMzKbHpsC&q=plant+community&pg=PA3|isbn=978-1-56000-623-7}}</ref> where an individual's social needs could be met. He later acknowledged that the plant community never materialized, and by the 1980s, suggested that volunteering in the nonprofit sector was the key to fostering a healthy society where people found a sense of belonging and civic pride.<ref>{{cite book|last=Drucker|first=Peter|title=Managing the Non-Profit Organization|year=1990|publisher=HarperCollins|location=New York|page=xii|url=https://books.google.com/books?id=qwAf_g_GnFgC&q=community&pg=PR12|isbn=978-0-7506-2691-0}}</ref>
* The need to manage business by balancing a variety of needs and goals, rather than subordinating an institution to a single value.<ref>Drucker, Peter F., ''The Practice of Management'', pp. 62–63, (1954)</ref><ref>Drucker, Peter F., ''Managing for the Future'', p. 299, (1992)</ref> This concept of [[management by objectives]] and self-control forms the keynote of his 1954 landmark ''The Practice of Management''.<ref>Drucker, Peter F., ''The Practice of Management'', p. 12, (1954)</ref>
* A company's primary responsibility is to [[customer service|serve its customers]]. [[Profit (accounting)|Profit]] is not the primary goal, but rather an essential condition for the company's continued existence and [[sustainability]].<ref>Drucker, Peter F., ''The Practice of Management '' (1954)</ref>
* A belief in the notion that great companies could stand among mankind's noblest inventions.<ref>Drucker, Peter F., ''The Five Most Important Questions You Will Ever Ask About Your Organization'', p. 54, (2008)</ref>
* "Do what you do best and outsource the rest" is a business tagline first "coined and developed"<ref>{{cite web|last1=Haus|first1=Marian|title=Best 10 Peter Drucker Quotes|url=http://pmseed.com/best-10-peter-drucker-quotes/|website=pmseed thoughts on managing project work|publisher=pmseed|access-date=April 27, 2015|date=October 9, 2011}}</ref> in the 1990s by Drucker.<ref>{{cite journal|last1=Vitasek|first1=Kate|title=A New way to Outsource|journal=Forbes|date=June 1, 2010}}</ref> The slogan was used primarily to advocate outsourcing as a viable business strategy. Drucker began explaining the concept of outsourcing as early as 1989 in his Wall Street Journal (WSJ) article entitled "Sell the Mailroom."<ref>{{cite journal|last1=Drucker|first1=Peter|title=Sell the Mailroom|journal=Wall Street Journal|date=November 15, 2005|issue=Manager's Journal|url=https://www.wsj.com/articles/SB113202230063197204|access-date=April 27, 2015|publisher=Dow Jones Company|postscript=Reprint from July 25, 1989}}</ref>